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5.43 pm

Lord Sassoon: My Lords, I am disappointed in the response and the questions that we have just heard. My right honourable friend the Chancellor has made it clear that he is concentrating on what is really important: the big picture issue of getting rid of the former system of financial regulation, which was proven to have failed in the crisis. We are making fundamental changes to that. As I explained in repeating the Statement, there are ongoing discussions about what really matters, which is about treating customers fairly, making sure that lending is materially and verifiably more than the banks would otherwise be planning to lend and, in that context, ensuring that the banks pay smaller bonuses than they otherwise would have done. It is precisely the switch from bonuses towards lending, which the noble Lord, Lord Eatwell, is asking for, that we are concentrating on now.

In answer to the noble Lord's questions about taxation, far from introducing any cut in tax on banks, we have introduced a permanent levy rather than a one-year levy-a levy that raises in each individual year more than the previous Government's one-off bonus tax did. Even the previous Chancellor, Alistair Darling, admitted that that bonus tax failed to change bankers' behaviour, whereas the bank levy that this Government have introduced reflects the relative risk in different banks' balance sheets.

I am grateful to the noble Lord for rising to the challenge about the allowability of bankers' bonuses or total remuneration against tax. It is an interesting suggestion. We look at the total package in the round and I am always grateful for interesting new ideas.

In respect of taxation of non-domiciled individuals, whether they are bankers or others, I remind the noble Lord that it was my right honourable friend who, when in opposition, first raised the question of non-domiciled individuals making a proper contribution to tax in this country. We have taken the lead on that.

The overall priority must be to make sure that the banks pay a fair share, as we believe they now will. At the same time, we recognise the need to keep a vibrant banking sector in this country and to keep the UK as a centre of global banking, with banks continuing to lend to all businesses, particularly the small and medium-sized businesses in this country. We will continue to work with our European partners to urge agreement, particularly on a disclosure regime by banding of remuneration. We will continue to work with our partners on consideration of a financial activities tax. The critical thing, as my right honourable friend set out today, is that the Government are working in a thoroughly practical, hands-on way to deliver results and, in particular, will continue to work with the banks to make sure that lending to the businesses of this country supports the recovery that this economy is on track for.

5.47 pm

Lord Oakeshott of Seagrove Bay: My Lords, I thank the Minister for the Statement. I do not know whether he has read it lately, but I have here an excellent document, The Coalition: Our Programme for Government, in which Nick Clegg and David Cameron promised,

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Item 1 said on banking:

"We will bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial sector ... We want the banking system to serve business, not the other way round".

There is not much sign in the briefing that has been coming from No. 10 and the Treasury that they are very aware of those commitments. Can the Minister assure us that he will draw those commitments to the attention of the people in the Treasury who are working on these schemes, because frankly the messages that are coming out are not right when we are trying to do a serious negotiation with the banks to improve their behaviour?

Specifically on the Royal Bank of Scotland, what possible justification is there for Mr Hester, who is one of the highest-paid public sector workers in the country, to get any bonus at all when his bank has missed its legally binding mortgage and business lending targets by a mile?

Lord Sassoon: My Lords, I am always grateful to my noble friend Lord Oakeshott for reminding us of what is in the coalition agreement, which is always at the heart of what we do. I am sure that my colleagues in the Treasury will need absolutely no reminder of what the coalition agreement says in this area, because it is precisely because we are guided by the coalition agreement that we now have a package that, as I have explained, means that 2,500 banks as opposed to 25 are caught by the code. For all their talk, the previous Government had not actually brought in any new remuneration code. We now have one in place. We are continuing, as I said, to urge our European partners to work with us on a common set of banding disclosures. The current discussions are precisely to make sure that bonuses are lower than they would otherwise have been and that lending is higher.

In respect of the Royal Bank of Scotland, as I said in the Statement, we found ourselves having inherited a most extraordinary agreement negotiated by the previous Government that put absolutely no restrictions on RBS's payments and bonuses this year. We want to see RBS now not as a front-runner, which seemed to be where it was encouraged to be under the previous Government's agreement, but as a back-marker when it comes to its bonus payments for this year.

Lord Clinton-Davis: Does the noble Lord recall the words of Nick Clegg, who asked whether it did not make one angry that the banks were being allowed to ride roughshod over our economy and were still handing out bonuses by the bucketload? Is the Minister satisfied that that situation should continue and that he should issue sanctimonious and tired Statements to the House? Does he not feel ashamed of what is happening?

Lord Sassoon: My Lords, I am sorry if I will become tediously repetitive, but if the questions cover points that I thought I had made clearly, I will have to make them again. We are taking far more practical and effective action than the previous Government did. We have extended very considerably the scope and form of the disclosures on bonuses that must be made. As to the quantum, I repeat to the noble Lord, Lord Clinton-Davis, that discussions led by my right honourable

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friend the Chancellor are ongoing, with the intention of making sure that bonuses are lower than otherwise they would have been and that lending to British businesses is materially and verifiably higher than it would have been. That is what we want in the context also of a vibrant and healthy banking system, which is good not only for this country but for the UK's global competitiveness.

Lord Ryder of Wensum: My Lords, will my noble friend tell us whether bankers in New York and Frankfurt are being offered the same type of bonuses as bankers in London? Will he further tell us whether the American and German Governments take the same attitude to bonuses as this one?

Lord Sassoon: My Lords, I am grateful to my noble friend Lord Ryder for enabling me to remind noble Lords that other Governments are increasingly following the lead of the UK and introducing variations on the measures that we have introduced for the taxation of banks. Since the announcement of our bank levy, Germany, France and other countries have followed with similar constructs. It is critical that we make sure that, while the UK regime is the toughest interpretation among global financial centres of what has been agreed internationally, we seek to work within the framework laid down by the Financial Stability Board and endorsed by G20 Ministers. Whether it is in relation to the US, other European countries or global financial centres, we will continue to work energetically with our partners to secure, as far as is possible, common standards in this area.

Lord Myners: My Lords, in 2009 the Prime Minister said that no bonuses of more than £2,000 should be paid to bankers while banks were in receipt of government support. The coalition agreement talked about robust action and detailed programmes to handle unacceptable bonuses. On that we have heard nothing at all. When we proposed disclosures about remuneration under the Walker report, this was supported by both the Conservative and Liberal parties. The Government have done nothing to implement the Walker recommendations.

The Minister asked for ideas. I will give him four. First, shareholders should be given a clear fiduciary responsibility, for which they can be held accountable under law, to take appropriate action to oversee the companies in which they have invested their clients' money. Secondly, banks should not be able to offset the past losses against current corporation tax liabilities while they are in receipt of central government support, which most of our major banks still are through the special liquidity scheme and the credit guarantee scheme, as a consequence of which very few will pay any corporation tax for the foreseeable future.

Thirdly, there should be a charge for the capital that banks effectively enjoy through the state guarantee. The Bank of England has estimated that this is worth £100 billion. A fair charge for that would be of the order of £12 billion to £15 billion-the annual charge for risk for capital, which the Minister will understand-rather than the derisory £2.5 billion pounds which ultimately, but not initially, will be raised under the

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Government's bank levy proposal. That is a considerably smaller amount than was raised under the bank payroll tax.

Finally, if the Minister finds the RBS employment agreement with Mr Hester unacceptable, he can terminate it and replace it with a new one. Will he do so, because the people of this country will not accept a situation in which in excess of 5,000 people working in British banking will receive total remuneration in excess of £1 million per annum? This is totally unacceptable and we are entitled to a decent answer from the Minister to these questions on bonuses, rather than the blather that we have heard about other matters.

Lord Sassoon: My Lords, I am not going to stand here and listen to the ridiculous tirade from the noble Lord, Lord Myners. If he had all these brilliant ideas, why did he not implement a single one of them when he was in office? It ill behoves him to come here with this litany of ideas, which may or may not be good but are given to me not in the spirit of co-operation but as a lecture telling me what we are not doing. I could repeat-but it would bore noble Lords interminably-the Statement of my right honourable friend, which gave a great list of things that we are doing and have done. The Government of the noble Lord, Lord Myners, left only 25 banks with any sort of disclosure requirements. We have extended that figure to 2,500. His Government managed to get a paltry four banks signed up to the much lauded taxation agreement. We now have the top 15 banks signed up. I could go on. It is no good the noble Lord giving me a lecture about what we should do. He had years to deal with the matter and completely failed. We are getting on in a very practical way to make sure that the banking industry and regulatory system is fixed.

Lord Higgins: My Lords, is my noble friend aware that the Government are absolutely right to get rid of the failed tripartite agreement that caused many of the problems that we now face? Does he agree that we are making some progress in reducing cash payments, deferred bonuses and so on? However, I have some difficulty with his argument that bonuses are all right so long as the banks lend more. That seems to be a non sequitur, except in the sense that if we agree to the bonuses, the banks may lend more. However, they ought to be doing that anyway. The two issues are not connected except in the sense of, "We will be soft on you if you do what we want". That is not the right approach.

As far as concerns RBS and the other banks that have been bailed out by the Government, I understand my noble friend's point about the agreement made by the previous Government. However, given the extent of participation in those banks, ought there not to be clear representation on behalf of taxpayers and the Government on the boards of the banks so that those directors could take appropriate action-because at the end of the day it is the board that decides these matters-with regard to bonuses?

Lord Sassoon: I am grateful to my noble friend Lord Higgins for recognising the progress that we are making on reform of the regulatory structures, and in

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relation to bonuses. We are absolutely not going soft on the banks, which is why, as we speak, discussions are ongoing to make sure that bonuses this year are lower than otherwise they would have been, and, in parallel with that, that banks will lend in a verifiable way more than they would have lent. We are not back-pedalling on any of this and are continuing to work actively with the banks.

As far as concerns the management of RBS and Lloyds, the basic construct put in place by the previous Government ensured that the banks would be managed on an arm's-length basis without the Government directing their day-to-day operations. That is the broad principle to which we are sticking. Nevertheless, it is important that the Government, as a significant shareholder in RBS and Lloyds, make their views very clear on all matters including bonuses.

Lord Brooke of Alverthorpe: My Lords, it would help if we had some honesty in dealing with some of these issues. The Statement says that the previous Government's failure to address them brought this country's economy to its knees. Presumably the previous Labour Government were responsible for the banking failure in the USA, Portugal, Greece, Ireland, Spain and other parts of the world. This is a worldwide problem that is not solely related to the previous Government.

To come back to the Statement, the Chancellor said, and the Minister concluded with it, that, "if the Opposition that created this banking mess has a better idea, let us hear it". My noble friend Lord Myners asked four questions and we await answers to them.

Lord Sassoon: My Lords, all I can say is that I will listen to any ideas. I did not hear the question at the end of the four ideas put forward but I am willing to listen to all ideas from noble Lords on a whole range of topics. I am always listening but I am puzzled that when the noble Lord had so much time in government to put those ideas into operation he did not think that they were so good at the time.

Lord McFall of Alcluith: At the Treasury Select Committee this morning Bob Diamond is reported to have said that Barclays is in the position that it is not too big to fail. Does the Minister agree with that statement and, if so, does that mean that if any big bank in distress comes to the Government in future the taxpayer will not be on the hook?

Lord Sassoon: I am grateful to the noble Lord, Lord McFall of Alcluith, for reminding us that there are other challenges as well as bankers' bonuses to be resolved. The too-big-to-fail one is absolutely at the heart of strands of ongoing work. I did not have the opportunity to listen to the whole of what Mr Diamond said to the Treasury Select Committee but I certainly believe that whether it is in the work of the Independent Commission on Banking or in the discussions that are going on in international fora, the question of how to resolve bank failures is one to which we need to continue to give considerable priority. We are reminded

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that the question of the structure of banking is multifaceted and we should not focus exclusively on one aspect of it.

Lord Beecham: Will the Minister tell the House by how much the banks will benefit from the pending reduction in corporation tax?

Lord Sassoon: My Lords, clearly it depends on the level of profits they make as to how much they will benefit from the reduction in the rate of corporation tax. We look at the total package of taxation on banks, as we do for the rest of industry. We believe that by introducing in particular the levy on banks, they will be paying a fair share to the Exchequer. We need to take account of the remuneration taxes, continue to consider the costs and benefits and talk to our partners about a financial activity tax, but we must take the whole of the taxation burden on the banks in the round.

Lord Hodgson of Astley Abbotts: My Lords, does my noble friend not think it strange that the party opposite seeks to evade any responsibility for the situation in which we now find ourselves? Having created the situation in which the taxpayer has ended up as a very large shareholder in a number of UK banks, is it not now most important that those banks return to profitability so that the share price and the performance of the banks will enable the taxpayer to earn a profit on the investment? To do that, do the banks not need to be properly staffed and remunerated? Will not our proposal enable us to do something to mitigate the disastrous economic incompetence of the previous Government?

Lord Sassoon: I am grateful to my noble friend Lord Hodgson and agree with his analysis. We need a successful and vibrant banking system in this country. We need healthy banks across the system, but it is particularly important for the taxpayer that the health of RBS and Lloyds is restored so that they can get a decent return in due course from its interest in those banks.

Lord Campbell-Savours: Is it not fair to say that bonuses based on share options could be quite remunerative?

Lord Sassoon: Indeed, bonuses based on a number of forms can be remunerative. It is now a fundamental part of the package agreed by G20 Ministers, incorporated in the European capital requirements directive in force from 1 January in the UK, that a significant part of bonuses now has to be paid in a non-cash form and cannot be cashed in for a considerable period. Absolutely, that needs to be part of the structure.

Lord Greaves: My Lords, the Independent this morning has some devastating quotes in recent months from the Prime Minister, my right honourable friend the Deputy Prime Minister, the Chancellor and the Business Secretary that can only be taken by ordinary people to mean that large, multimillion pound bonuses would be stopped by the Government. That is the only reasonable interpretation to put on them. Would it be sensible, if senior members of this Government cannot deliver

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such things, for them not to give the impression that they are going to do so? That is simply a propaganda own goal. Would the Minister also comment on the view from a former Business Secretary that the rich have suffered enough?

Lord Sassoon: My Lords, I am conscious of the time. All I can say is that my right honourable friend the Chancellor has made it completely clear what we are doing today, which is a considerable package of things, one element of which is to talk actively to the banks with the aim of ensuring that the bonuses they will pay this year will be lower than they would otherwise have paid.

Public Bodies Bill [HL]

Main Bill Page
Copy of the Bill
Explanatory Notes

Committee (6th Day)(Continued)

6.08 pm

Amendment 37

Moved by Lord Faulkner of Worcester

37: Schedule 1, page 16, line 31, leave out "Football Licensing Authority."

Lord Faulkner of Worcester: In moving the amendment, I shall speak to Amendment 91, which is grouped with Amendment 37. Both amendments refer to the future of the Football Licensing Authority.

Those of your Lordships with long memories may recall that the FLA was originally set up under the Football Spectators Act 1989 to oversee the introduction of the compulsory membership scheme so beloved of the noble Baroness, Lady Thatcher, who believed that such a scheme was the right response to the football-related hooliganism of the 1980s. One of the worst examples of such hooliganism had resulted in the Heysel stadium disaster of 1985. However, before the Act could be implemented, almost 100 people lost their lives at Hillsborough stadium in Sheffield at an FA Cup semi-final match and the subsequent inquiry conducted by Lord Justice Taylor reported that the scale of the disaster would have been even worse if a compulsory membership scheme had been in force. Therefore, that provision in the Act was shelved and has not seen the light of day since. Lord Justice Taylor's principal recommendation in his final report that the grounds of Britain's professional football clubs should eliminate standing and become all seated was accepted by the Conservative Government of the day and supported by subsequent Labour Administrations. The one variation was to exempt clubs in the lower two divisions of the Football League from the requirement to go all seated.

At this point, I should declare that not only was I at that cup semi-final at Hillsborough on 15 April 1989 but, throughout the 1980s and 1990s, I was deputy chairman of the Football Trust. Our distinguished chairman was the noble Lord, Lord Aberdare, whose son sits on the Cross Benches today. The Football Trust was the body charged by the Government to provide the funding from football pool competitions for the transformation of Britain's football grounds.

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The Football Licensing Authority was given the responsibility for licensing grounds and ensuring spectator safety-principally by implementing the all-seater policy.

Over the past 20 years, not a breath of scandal has been attached to the work of the FLA. The Football Licensing Authority has acquired a worldwide reputation as an authority on stadium safety and is the Government's principal adviser in this area. Mercifully, there has been no repetition of the Hillsborough disaster or the dreadful fire at Bradford City's ground in May 1985. So why is the FLA listed in Schedule 1 as facing abolition?

The DCMS statement does not help us very much, as it suggests that the proposals involve,

Bizarrely, included in that announcement was the statement that,

"The Government will support the Sports Grounds Safety Authority Bill 2010-11, a private members' bill, presented on 30 June 2010 by Jonathan Lord MP. This would rename the Football Licensing Authority the Sports Grounds Safety Authority and allow it to provide advice, on request, about safety at sports grounds to any national or international organisation, person or body (including local authorities and Ministers of the Crown) and to charge for these services in certain circumstances".

The FLA has been seeking such powers for years, and I was looking forward to giving that Bill my full support once it reached your Lordships' House. That Bill has every prospect of coming here because it has already secured its Second Reading in the other place without opposition and has been committed to a Public Bill Committee.

I must ask the Minister what on earth is going on. How can the Government support a Private Member's Bill that will extend the scope of an organisation that they list for abolition? To refer vaguely to transferring the FLA's responsibilities after 2012 to "another body" is just not good enough. Cleverer people than me have been racking their brains to think what other body the FLA could be moved into. Bearing in mind that the FLA has licensing and regulatory functions, it is hard to see how those functions could go to a body such as the Local Government Association. Nor would the Health and Safety Executive be appropriate. The FLA deals with spectators and with professional football, whereas the HSE is responsible for the safety of workers and the places where they are employed. The ethos of the HSE is to investigate accidents; that of the FLA is to prevent accidents in the strictly specialist environment of sports stadiums.

The truth is that the Football Licensing Authority enjoys the support and respect of all the authorities and individuals with which it deals. It would be a public relations disaster for the Government to give the impression that football spectator safety somehow did not matter any more. What sort of message would that send, for example, to the Hillsborough victims, whose grievances are now being addressed by the Government's own Hillsborough inquiry panel, chaired by the right reverend Prelate the Bishop of Liverpool? I hope that the Minister can give us some answers and, better still, accept my amendments. I beg to move.

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6.15 pm

Baroness Taylor of Bolton: I support my noble friend and have attached my name to Amendments 37 and 91. Over recent weeks, since we first tabled the amendments, there have been many opportunities for the Government to clarify the situation, but we are as confused as we were. The comments of my noble friend Lord Faulkner summarise very well the dilemma that we face in trying to understand the Government's intentions. My noble friend gave a brief but accurate history of the formation of the Football Licensing Authority. He mentioned in passing the Football Trust, of which he was not only a leading member but fundamental in its establishment. I pay tribute to the work that he did, which was very important.

My noble friend also mentioned the Hillsborough disaster. Many of us who have a serious and long-term interest in football will remember exactly where we were on that day. All of us who have been involved in considering safety issues remember many of the details-the work that went into the Taylor report and the public concern about other disasters as well as Hillsborough-and the great leap forward that everybody in football had to make to come to terms with the improvements necessary to provide spectators with the safety that they deserved. From those unfortunate beginnings, from those disasters, we have made significant progress in this country and, as my noble friend said, become world leaders in football stadium design and football safety generally.

The reputation of the FLA is without doubt-I have heard no one in another place or in general conversation criticise its work-but over the past few weeks we have seen incredible confusion, as my noble friend has pointed out. Originally, there was reassurance from the department to the FLA about its future. There has been the suggestion of extra responsibility through the Private Member's Bill, which I think received more or less universal acclaim when it was introduced in another place. Nobody dissented to that Bill; indeed, the Government so supported the Bill that they introduced a money resolution to facilitate its passage, which is somewhat unusual. So far, so good for Football Licensing Authority, but then we got this Bill. No one has said that the FLA is not doing a good job-many say that it should have more responsibility-and there have even been plans to make it more efficient, but then we got suggestions of abolition or merger.

We all know how important football is in this country. I am one of those people-some would say, sad people-who spend most Saturdays on either a high or a low depending on the result of the Bolton Wanderers match. Hundreds of thousands of people, myself and many others in this House included, go regularly to football matches. We go today safe in the knowledge that the stadiums that we attend are up to scratch. I have taken my children since they were quite a young age. It is important to people such as me who believe that football is a family sport that we can take our children-and, for many people, grandchildren-to football matches in the knowledge that everything is done to provide the right safety standards.

As my noble friend said, the FLA has world respect. People come to the FLA for advice. Other countries would very much like to have the kind of authority

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that we have in this country. The Government's confusion over the past few months has undermined, and is in danger of destabilising, the good work that has been done over many years. This provision in the Bill raises questions about the Government's commitment to football and to sport in general. We saw what happened with the school sports money. Although there was a partial U-turn on that, similar damage has been done.

The FLA is critical to the safety of spectators and participants in sport, exists on a very small budget and is very well thought of. Indeed, the FLA is rather strange in the lack of criticism that it attracts. The FLA has pushed out new grounds, has developed stewarding and has got the co-operation of clubs-even very senior clubs-which have listened to its advice and taken its encouragement. The FLA has not had to be heavy-handed because of the respect in which it is held by all in football.

I hope that the Government tonight will give some thought to clarifying just what is their commitment both to the FLA and to all of us who watch football matches live and who depend on the FLA to ensure the safety of ourselves, our families and those who watch football with us.

Lord Greaves: I should follow the noble Baroness by admitting that I, too, spend more of my time than is good for me watching football matches. In my case it is nowadays mainly non-league football in the north of England. It is a wonderful thing to do, but not to be discussed here today.

This proposal is one of the most mystifying of the proposals in the various schedules to the Bill. We have discussed a number of them so far and we have quite a few more to go. By and large, they fall into one of two categories. There are those which the Government want to abolish and simply close because they are no use any more or because the Government think their functions should no longer be carried out. That is not the case with this body. There are those where the functions are being transferred to the appropriate government department on the grounds that, in the Government's view, that provides more democratic accountability for their functions than an arm's-length body, a non-departmental public body or some other sort of arm's-length body, as at present. That is not the case with this body because the information we are being given so far makes it absolutely clear that the functions will continue, that no staff will be made redundant and presumably, therefore, there will not be any significant savings.

Certainly, the Government have not provided any information about whether they think savings can be made. That is the second group of bodies-those which the Government want to reorganise because they believe that savings can be made. If sensible savings can be made by reorganising quangos, it is difficult to argue against that if the proposals are otherwise reasonable and sensible. However, that is not the case with this body. The functions are to remain, the staff are to remain and it does not appear that there will be any significant savings, although perhaps the Minister can tell us about that. What, therefore, is the purpose of the change?

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Some suggestions have been made that it might be better for it to be part of a larger body with a wider remit, although the Private Member's Bill being put forward would allow for that to happen anyway, as I understand it. So, why is it being done? That is the fundamental question that has to be asked and that the Ministerhas to answer. He has to provide some information about what new structure, what new system of transfer or merger of powers the Government want to bring about. If the powers are to be transferred to some other body, or merged with those of some other body, which other bodies are we talking about? Again, the information we have been provided with is incredibly vague. In fact, it is completely vague; it simply has not been stated.

It seems that this goes back, yet again, to the basic deficiency of the whole architecture of the Bill. Given the architecture of the Bill at the moment, and the way in which these bodies can be closed down, or merged, or have their powers transferred or whatever it is, simply by ministerial order, subject only to a relatively brief take-it-or-leave-it debate in this House and the procedures in the House of Commons, we have no alternative but to try to probe, in Committee, what is going to happen with each and every one of these bodies. That is why it is taking so much time.

As for this body, the information we have been provided which so far is absolutely and utterly inadequate and, unless proper information is provided by Report, the House would be entirely justified in taking this body out of the Bill.

Lord Clark of Windermere: I intervene briefly to support the amendment of my noble friends Lord Faulkner and Lady Taylor of Bolton, both of whom have long experience in the administration of football. Their introductions were wise and full of knowledge. It is interesting to find myself, yet again, on the same side and making the same arguments as the noble Lord, Lord Greaves, as I have so many times during the proceedings on the Bill. He is absolutely right except in one thing. He said that the information provided by the Government as to the raison d'être for proposing this abolition was vague. It was not vague; it was basically non-existent. That is why we have these amendments at this stage.

I declare an interest as a non-executive director of Carlisle United Football Club. I pay particular attention, in that role, to the safety of the ground and of the crowd. Before I venture down that route, I can say that I discussed this proposal with people at various levels of football administration and they are unanimously bemused and mystified. The Government seem to be saying that they are in favour of the work of the FLA but the FLA should not do it. Yet, on the other hand, it is unclear what is the alternative body so to do, as my noble friends have argued this evening.

On the importance of the directors of football clubs to the safety of supporters, I take a great interest in the safety aspect. I regularly take fans around and explain what we do and what we are required to do to ensure their safety. At virtually every home match I pay a visit to the safety room and discuss with the safety officer and his staff what is happening and ask whether everything is okay. It is interesting that, when

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I take groups of fans around, the safety officers tell the fans that, if you are going to be taken unwell, the place to do it, if not at hospital, is at a football ground because they are very safe, physically. We have medical and ambulance staff, and we always have paramedics and at least two doctors-one for the crowd, one for the teams. A great deal of attention is paid to the safety of fans. I notice that the noble Lord, Lord Henley, is in his place. I have seen him at the same football ground and I will very happily take him to see the safety work that we do at Carlisle United.

My main thrust is to try to tease out of the Minister what he has in mind. The FLA has, perhaps, not struck strictly to its remit. It is the Football Licensing Authority. Its job is to co-ordinate and to make sure that standards exercised by the licensing authorities, which tend to be the local authorities, are standardised and up to standard. That applies not just to football grounds. There have been many examples of the Football Licensing Authority assisting other sports with their stadia, almost ex gratia, and, in doing so, it has protected the supporters of other sports.

Lord Mawhinney: I am very grateful to the noble Lord. He knows my declarable interest and he also knows the very high regard in which I hold him and the role that he has played at Carlisle for many years. I can tell other Members of your Lordships' House that he is held in extremely high regard. What I am not entirely clear about from the noble Lord is not the history, which was well rehearsed by the noble Lord, Lord Faulkner of Worcester, or the hugely significant difference that the FLA made 20 years ago and built on, but what he thinks would happen to safety at Carlisle if the FLA were abolished. Surely he is not trying to argue that safety at Carlisle United would diminish as a consequence. In which case, what is the point that he is trying to make for the Committee, not 20 years back but 20 weeks ahead?

Lord Clark of Windermere: The noble Lord is very perceptive. I am just about to deal with those points. I compliment him on the excellent work he did when he was chair of the Football League. It was much appreciated. He was able to bring to that role the discipline and vision that we all respect.

The key point I want to turn to now is what the Government have in mind when the FLA is abolished. At one stage, there was talk that it would be taken in-house by the Department for Culture, Media and Sport, but I have serious doubts about how viable that would be. The alternative is to look at the safety of sports grounds. I am in favour of that because the point I was making was that the FLA has in the past performed this job which is outside its remit. It would be helpful if all sports grounds were regulated by the same body. I am trying to tease out of the Minister whether that is what the Government are trying to do. If they are, will they give us some ideas about the funding? It is not only about the regulations. One thing the FLA did was to work with City & Guilds to have an NVQ course for people who work in safety in grounds. That is the sort of thing that we ought to be encouraging.

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This is not clear. We want some clarity because at the end of the day we do not doubt that the Government have in mind some agency to provide this and to guarantee this standard across the country, but many of us would like to see it right across sports.

Lord Hunt of Kings Heath: My Lords, I am sure we are all grateful to my noble friends Lord Faulkner of Worcester and Lady Taylor for allowing us to debate the Football Licensing Authority. My noble friend Lady Taylor described supporting Bolton Wanderers as being a mixture of highs and lows; of course, as a supporter of Birmingham City, I fear it is usually all too low and very few highs.

I want to start by paying tribute to the Football Licensing Authority. There is no doubt that safety issues are very important in our football grounds and that there has been a huge improvement over the years. As the noble Lord, Lord Mawhinney, said, there has been an improvement in overall safety culture. I believe that the development of stewarding by the clubs themselves has enhanced the development of a secure environment in a non-confrontational way and that we have seen a big improvement in facilities. However, with all the improvements that have taken place, can we say that the problem has gone away in its entirety? I do not think it has. There have been some incidents-I am sorry to say at my own football club in a derby against Aston Villa only a few weeks ago-where there were issues of concern about safety. That suggests to me that we can never be complacent. The answer to the noble Lord, Lord Mawhinney, is that however much-

Baroness Taylor of Bolton: While my noble friend is on this point and talking about the future, does he agree with the comments of Paul Thorogood, the chief executive of the Football Foundation, which is responsible for many of the support packages for improvements at smaller clubs, that he would be extremely worried were the FLA to be abolished because that would affect the future safety of the projects with which the foundation is involved?

Lord Hunt of Kings Heath: My noble friend raises a most important point. Even if you take Carlisle United, with the dedication of my noble friend as a director and his concern for safety, surely directors in their responsibilities regarding safety can still take advantage of the advice and presence of a body such as the FLA. I am convinced that the FLA or a similar body has an important role to play in the future.

I see from noble Lords opposite that the noble Baroness, Lady Rawlings, whom we welcome to our debates on the Bill, is going to give a positive assurance about the future. That would be very welcome. However, I have to say to her that our problem with the Bill, as described by the Public Administration Select Committee only last week, is that the overall reviews by individual government departments were very poorly managed, there was an absence of meaningful consultation, the tests in the reviews were not clearly defined and the Cabinet Office clearly failed to establish a proper procedure for departments to follow. That has left noble Lords in a vacuum regarding the intention of

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the Government. The noble Lord, Lord Greaves, referred to the mysteries of the Bill, and this is a classic case in point.

The noble Lord then went on to say that the real problem is the architecture of the Bill. I do not think he was in his place when we had our debate on the first group of amendments when we discussed the architecture, but it is perfectly clear that if the Government were to come forward and make it abundantly clear that they are now prepared to make changes to the architecture of the Bill in relation to Schedule 7, in particular, and also on public consultation, on the procedure under which orders would be debated in your Lordships' House for bodies that come under the Bill and other matters that we have discussed, then noble Lords would have much more confidence. At the moment, we have been left in the dark. It is clear that noble Lords do not know about the Government's intention regarding the FLA. I do not think it is satisfactory that we are here in Committee debating the Bill when there is uncertainty in your Lordships' House and in the sports world as a whole. I am sure that the noble Baroness will be able to give us some comfort that the issues of safety will be taken forward in future, but I hope that she will give some comfort about how the Government intend to deal with the Bill more generally.

Baroness Rawlings: My Lords, I thank the noble Lord, Lord Faulkner of Worcester, and the noble Baroness, Lady Taylor of Bolton, who put down this amendment for us to discuss, and all the other speakers. This debate gives me the opportunity to clarify, which the noble Baroness asked for, and to clear up many of the misunderstandings and points on this issue.

Amendment 37 removes the Football Licensing Authority from Schedule 1, and Amendment 91 inserts the said body into Schedule 5, allowing its functions to be modified or transferred while retaining the body in its current form. The Government are very clear that the Football Licensing Authority carries out an important role, and we want this to continue. Indeed, as the noble Lord, Lord Faulkner, said, the Government are supporting a Private Member's Bill that seeks to reconstitute the Football Licensing Authority as the sports grounds safety authority and will extend the authority's advisory functions so that it has the power to provide advice about safety at sports grounds to any national or international organisation, person or body.

Our intention is that the authority, as the noble Lord, Lord Clark of Windermere, said, will continue as a separate body, whether in its existing form or as a new sports grounds safety authority until after 2012, when its expertise and functions will be transferred to another body. Doing so would allow the authority to share the back-office functions of a larger organisation. This should lead to greater efficiencies and make it less constrained from broadening out its role. It will therefore be able to make the best use of its expertise and reputation.

I indicating that we will abolish the FLA as an independent public body only after 2012 will allow us time to make certain that we have an appropriate home for its expert role and functions. Over the next 12 months, we will discuss the options with the FLA potential host organisations and interest groups to

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make certain that we have an appropriate solution in place in time to meet the commitment to implement reforms after the 2012 Olympics. This proposal would not risk the important strides made over the past 20 years to improve safety at football after the Hillsborough disaster.

I take this opportunity to assure the House that we do not intend to change the law in relation to football ground safety and, as I have made clear, these important functions need to be retained.

Lord Mawhinney: My noble friend said that she is planning, on behalf of the Government, to discuss with interested parties what might be the new arrangement. Those of us with experience of government know that there is a difference between discussions and public consultation. I was wondering whether she might be tempted to commit to a public consultation, so that anyone with a view worth expressing and listening to would have the opportunity and no one would feel excluded from the sense of ownership of the new body which the Government are proposing.

Baroness Rawlings: I thank my noble friend Lord Mawhinney for that question. As he would know, having been a distinguished government Minister, at this Dispatch Box I am unable to confirm consultation. But I can assure him that there will be further discussions and that that will be looked into.

Baroness Taylor of Bolton: Leaving aside for a moment the wisdom or otherwise of abolishing the body before what is going to happen to it has been decided, in view of what the Minister has said about the continuation of the functions of the FLA, surely she could accept transferring the FLA from Schedule 1 to the provision in Amendment 91. That would allow proper consideration of what should be happening in a full way and everyone could be consulted. Just transferring the FLA from the first schedule to later in the Bill would accomplish what she is trying to do.

Baroness Rawlings: The FLA is not being abolished. I would not like to take any decisions with great rapidity at the Dispatch Box. All decisions on what will happen to it in the future will be discussed at great length. This is a very important matter and the Government would not want to take such a decision without that.

6.45 pm

Lord Hunt of Kings Heath: My Lords, I must say that this is a bit of a puzzle because Schedule 1 lists the bodies where power to abolish is being given. My noble friend has suggested that the FLA be moved to Schedule 7. I have a theological difficulty with that because-

Lord Berkeley: Schedule 5.

Lord Hunt of Kings Heath: Yes, it is Schedule 5; I would like to see Schedule 7 removed from the Bill. It is very difficult to know why the noble Baroness's

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department is not using the Bill in the way in which it is constructed. Schedule 5 is headed "Power to modify or transfer functions: bodies and offices". Why on earth is the FLA not in that schedule?

Baroness Rawlings: That part of the Bill will be looked at later, as I have said. With its important functions, it is not being abolished in this Bill. However, as I have set out, the Government's proposals include the abolition of the FLA as such after 2012 and not now.

Lord Hunt of Kings Heath: My Lords, no date is given as to when bodies are to be abolished. Schedule 1 sets out the bodies where this Bill gives power to abolish. The puzzle is that, because Schedule 5 gives the flexibility to list bodies where at some stage-not at the moment maybe but at some time in the future-you might want to transfer or modify their functions, why on earth is the FLA not in that, given that the Government have clearly designed the Bill to give flexibility for such organisations? The noble Baroness might want to come back on that.

Baroness Rawlings: With respect to the noble Lord, Lord Hunt, I have just said that the FLA will not be abolished until after 2012. We believe that there is a strong rationale for doing so, while acknowledging and seeking to protect the benefits associated with its important public functions. The Government will continue to support the Private Member's Bill and will work with Parliament to secure what we hope will be an extremely positive outcome. On this basis, I hope the noble Lord will feel able to withdraw his amendment.

Lord Greaves: Before the noble Lord tells us whether he is prepared to do that, perhaps I may just pick up on a couple of points. From the statement that the Minister has given, it is very clear that the Government are proposing, in due course after 2012, to merge the FLA with an unspecified body. In those circumstances, it seems to me that its appropriate place in this Bill would be Schedule 2, which gives power to the Minister by order to merge the bodies listed there. Equally, it could be in Schedule 5, as suggested in the amendment in the name of the noble Lord, Lord Faulkner, which would transfer its functions. It would leave a shell organisation that has no function; nevertheless, that would be a sensible place to do it.

I still want to press the Minister on some questions and I have to congratulate her on the way in which she is coping. If I may swap sports, she is batting on a sticky wicket here, which she is doing fairly well and she is not out yet. First, as I have asked previously, can she confirm that the Government do not intend to save money by this proposal and that in no way is there a money-saving aspect? That seems to be what was in the briefing. It would be useful to know that because that would then be put to one side and would not be an issue any more.

Secondly, the Government must have some idea of the existing organisations that are in line to merge with the FLA or are in line to absorb the FLA or its

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staff and functions within their organisations. Can the Government give us a shortlist-perhaps not today but before Report-of those organisations that they consider might be appropriate to take on the FLA en bloc or just its staff and functions?

Baroness Rawlings: I thank my noble friend Lord Greaves for his questions. The savings are not a number one priority in this case. Regarding the Private Member's Bill, it is going through Parliament at the moment, and the FLA has to be abolished in order to be merged with something else afterwards.

Lord Faulkner of Worcester: My Lords, I thank the Minister for her attempt to answer the debate. I have to say that this bit of the Bill is an indication of the problems the Government have with their whole approach, in that the Cabinet Office decided on a series of death sentences in advance of publishing the Bill, and then decided to put forward the trials and amass the cases in order to prove that those sentences are justified. In the case of this body the DCMS, to its credit, is resisting what the Cabinet Office is doing. It does not believe for a moment that there is any other place which the FLA or, in its new form, the sports grounds safety authority can go to for the reasons I set out in my opening speech. I am pretty sure that at the end of this rather painful period, it will be concluded that the sports grounds safety authority, which is what it will become with the passage of the Private Member's Bill, will continue as an independent body.

The Minister has said helpfully that the functions of the FLA in its new guise are essential and that there is no intention to weaken football stadium or sports ground safety legislation, which is very welcome. The logic is therefore inexorable in the way that the noble Lord, Lord Greaves, explained. The conclusion has to be that the authority will continue in some guise or another.

I am most grateful for the contributions that have been made, including that of the noble Lord, Lord Mawhinney, whose support for the FLA is greatly appreciated. He asked my noble friend Lord Clark a question about what role the authority has now. The answer is that sports ground safety is not a piece of history. Local authorities are obliged to license sports grounds year by year. New stadiums are built and new sports are going to come under the remit of the FLA as a result of the Private Member's Bill, which I hope your Lordships will pass in due course, so the role of an independent body is going to be very considerable indeed.

I am tempted by the amount of support that this amendment has received to test the opinion of the Committee, but it would be fairest if I gave the Minister an opportunity to reflect on what has been said, and I hope that we can come back to this on Report, when she may be able to give a rather better explanation about just where she thinks this authority is going in the future. It cannot go to the Health and Safety Executive, and it cannot go to local government, so the Government are going to have to create a new authority to take over this one. That strikes me as barmy. It would be much more sensible if the Government

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accepted this amendment, and agreed that the authority should go into Schedule 5 and was reconstituted along the terms of the Private Member's Bill. For the moment, I beg leave to withdraw the amendment.

Amendment 37 withdrawn.

Amendment 38 not moved.

Amendment 39

Moved by Lord Faulkner of Worcester

39: Schedule 1, page 17, line 2, leave out "Inland Waterways Advisory Council."

Lord Faulkner of Worcester: My Lords, this is something a little different. The purpose of Amendment 39 is to remove the Inland Waterways Advisory Council from Schedule 1. This is not the most controversial proposal in the Bill, but I believe that the 14 members of the IWAC, all of whom are volunteers and unpaid, its part-time chair, John Edmonds, and the two support staff deserve at the very least an expression of public thanks and recognition for what they have achieved since April 2007, when the council was set up as a consequence of the Natural Environment and Rural Communities Act 2006. The same goes for the predecessor body, the Inland Waterways Amenity Advisory Council, which was formed in 1968.

The IWAC does exactly what its title suggests. It gives independent advice to the UK Government, the Scottish Government, navigation authorities and other interested parties on matters appropriate to our inland waterways. If no one wants to listen to that advice, of course that is up to them, but before IWAC disappears it is worth making the point that the next two or three years are going to be absolutely critical for the inland waterways as the British Waterways Board turns itself into a charitable trust. That will represent a huge change in culture as well as in status for the BWB, and I would have thought that it would benefit enormously from being able to call on the Inland Waterways Advisory Council for advice, particularly bearing in mind that there is not a lot of experience in Defra in this area.

My question to the Minister, who on this occasion I think is going to be the noble Lord, Lord Henley, is: how long do the Government expect the IWAC to stay around for? Would he not agree that it makes no sense to get rid of it before the British Waterways Board has completed the process of converting itself into a charity? One only needs to look at the CVs of the IWAC board members to realise how much talent is assembled at its meetings. It has economists, accountants, environmentalists, campaigners, academics and heritage experts-they are all there.

What I feel is so sad about the Government's approach towards the quangos is that it seems to be based on knowing the price of everything but the value of very little. Most countries would give a great deal to be able to draw on a group of volunteers who are experts, who cost the state virtually nothing and who come together out of a sense of public duty and service. It may not be apparent for some time just how much is being lost as

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a consequence of this Bill, but we should be in no doubt that we shall as a nation be the poorer because of it. I beg to move.

Lord Berkeley: My Lords, I rise to support my noble friend Lord Faulkner in this amendment. He has outlined the role of and described the people involved in the Inland Waterways Advisory Council extremely well and he will be aware from the briefing that we have all had from Ministers that two secretarial staff are involved in the council. To abolish something because two people are employed there seems quite extraordinary.

The role of the IWAC seems to fit very well with the Government's plans for localism because canals are a wonderful local amenity. However, there are challenges in maintaining them. We have all read of how volunteer labour is used so often because canals are expensive to maintain and do not produce a lot of revenue. Their transport was rather taken over by the railways about 150 years ago, but they remain a wonderful amenity for leisure purposes and for what they provide to communities. We shall debate this issue again when we talk about the future of the British Waterways Board, but there will be some tension when the BWB becomes a charity. We have not been and we probably will not be told where it will get its funding from and it struggles hard to find funding at the moment. Indeed, there are occasions when I see it turning itself into a property company to the detriment of people trying to use the canals.

I heard about an example of this a couple of years ago in Brentford on the Thames. Some of the BWB people had done a deal with a property company to build some very nice waterside houses at Brentford. To make them even more attractive to the buyers and to make more money, some pontoons were put into the canal so that lots of canal boats could be moored there. The problem was that the pontoons and the boats together were so wide that it was almost impossible to get a canal boat into the canal, which is after all the point of the lock connecting to the River Thames. There are quite strong tides there. Anyone who has driven a canal boat will know they are not like motor cars. They respond to the wind and the tide and they do not steer very well, so you need a bit of space not to hit things. But these people were quite happy to put these pontoons in the river at the entrance to the canal and to allow things to moor, because that would make more money. There were allegations, which I do not want to pursue, that people were making personal gains but, regardless of who got the revenue, it affected navigation.

7 pm

I do not know how this will work when we have a charity running it. One always believes that charities are good things and that nobody will try to make money or stop the organisation doing what it is supposed to do. That remains to be seen, depending on what this charity is going to be doing. In the mean time, as my noble friend said, surely an independent advisory body is important. The department's briefing paper says that abolishing this body will improve transparency and effectiveness in policy development by enabling

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the Government to engage directly with stakeholders. With the greatest respect, that is total rubbish. It will mean one or two officials-the few who are left in the Department for Transport-having to engage directly with the experts all over the country whom my noble friend told us about. That is just not going to happen. It is sad that, for the sake of saving the cost of two secretarial posts, this body is going to be abolished.

I hope that the Minister will at least grant a stay of execution, if that is the right expression, for several years until this charity is established and we can all see how it is going to work and whether the charity needs independent advice costing it virtually nothing. I also hope that the Government will make sure that the canals stay open and operational so that people can enjoy them. They can get as much money as they want from other revenue, be it from developments that do not block the canal, cables laid along the footpath, telecoms or whatever. I hope that there will be a transition period of several years after the charity is established before this body is abolished.

Lord Phillips of Sudbury: My Lords, I support this amendment and have little to add to what the noble Lords, Lord Faulkner of Worcester and Lord Berkeley, have stated. The inland waterways of this country are one of its glories and, in the present age, the public resort to and benefit from the inland waterways can only increase. We as a Parliament have for too long done things which were well intentioned but which, in the event, proved to be counterproductive. One of the great problems of the present age is that the public are so confused about different bodies, particularly in the voluntary sphere, that a great deal of the good will and potential effect of a body such as the Inland Waterways Advisory Council can be inadvertently lost by chopping and changing. As all Members of the House will know, the inland waterways are covered by a wonderfully diverse mix of mainly charities-I am patron of the charity that looks after the River Stour, for example, but there are hundreds of them. To have a competent, known, well regarded advisory body taking a valuable overview and bringing together the often conflicting demands and interests of the individual charities with their different responsibilities seems indispensable. If that is right, then for mercy's sake let us leave this body alone and not at some future date have to resurrect it with a loss of public identity and continuity in the mean time.

Lord Whitty: My Lords, I will pick up from where the noble Lord, Lord Phillips, has just left off. I have a past interest as a Waterways Minister, which is a fantastic job. I cannot remember if it is part of the portfolio of the noble Lord, Lord Henley, but if not, that is regrettable, because it provides a welcome relief from most of the rest of what one has to do. I also have a present interest as a member of the board of the Environment Agency. British Waterways is the dominant organisation for canals and the Environment Agency is the dominant organisation for rivers. An amendment recently tabled by the noble Lord, Lord Taylor, points the way that the Government are thinking of going in handing over British Waterways to a trust

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in the third sector and transferring the Environment Agency's navigation and waterways responsibilities to that body.

I am, broadly speaking, subject to a few caveats, in favour of that sense of direction. Eighty to 90 per cent of British Waterways will probably be covered by that new organisation, which will make it a very dominant organisation. All the small navigation authorities to which the noble Lord, Lord Phillips, referred, supported by volunteers, charities and local efforts for relatively small stretches of canal and river, look to this body for technical advice and for a forum where they can sit and be treated equally with the representatives of British Waterways and the Environment Agency. They will be the people who will most miss out as a result of the abolition of this body. British Waterways, including the Environment Agency's navigation aspects, will take care of itself, and the charitable status, I hope, will ensure that it does a good job for the public and the environment. However, the smaller navigation authorities need this body and we should seek to retain it for them, certainly for a significant period beyond any transformation of the status of British Waterways, as my noble friend Lord Berkeley suggested.

Lord Grantchester: My Lords, I compliment the speakers this evening on giving their thoughts on the Inland Waterways Advisory Council. I suggest that this body has been included in this part of the Bill to add some weight, but the timing has not been properly considered. In rural areas, the inland waterways are a thriving enterprise for a lot of people. Volunteers undertake restoration and development work, which offers enjoyment to many people along the waterways, reconstructing our industrial heritage and providing diversification opportunities in rural areas. I tease the Minister when I say that we are not looking at a dead parrot. This situation is working extremely well. I ask him to consider the thoughts of all the noble Lords who have spoken tonight, to clarify some of the background as to why British Waterways is one of only nine bodies in the Public Bodies Bill being made into a charity, to expand the Government's thoughts on why they think that British Waterways is best suited to charitable status and to say how, given its activities, it is likely to be able to raise the funds necessary to continue to provide all these excellent opportunities in development and restoration in rural areas for our wonderful waterways.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley): My Lords, we will come to the final point made by the noble Lord, Lord Grantchester, when we get to Amendment 86. I offer my congratulations to the noble Lords, Lord Faulkner of Worcester and Lord Berkeley, on avoiding the whole wider question of the British Waterways Board, which we will deal with at that point.

The noble Lord, Lord Whitty, asked whether this was part of my brief. I can confirm by shaking my head that it is not part of my brief within the department. I will certainly discuss the matter with my honourable friend Mr Benyon. He might be prepared to take on dangerous dogs and in return I could have waterways. I could spend the weeks and months ahead cruising

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the waterways and avoiding this House until my noble friend the Chief Whip brings me back to reality. I make that point because it is important to remember, as other noble Lords have pointed out, the importance of the waterways and canals to all of us. Again, as I implied in my remark to the noble Lords, Lord Faulkner and Lord Berkeley, that is a wider question, which we will come to when we get to Amendment 86, which I do not suppose we will reach tonight.

We are debating not the British Waterways Board but the Inland Waterways Advisory Council. I want to make it clear that, after careful consideration, the department, the Government and Ministers have decided that they no longer need a statutory arm's-length body to help to develop policy for the inland waterways. Although the Inland Waterways Advisory Council has provided very useful input, policy development is rightly the role of government departments and Ministers working closely with delivery bodies and stakeholder representatives, including such bodies as the Association of Inland Navigation Authorities, as mentioned by my noble friend Lord Phillips and the noble Lord, Lord Whitty. We will continue to develop closer working relationships with all waterways interests. That will enable Ministers to benefit from more direct and tailored input into policy development.

Our proposal to move the British Waterways Board into civil society in April 2012 will also mean that, for the future, the Government will no longer need an organisation to provide advice on policy development. The Government and navigation authorities need to engage with stakeholders directly in the design, implementation and management of the new structure. The Government's decision has been discussed with the chairman of the Inland Waterways Advisory Council and individual members of that authority have been notified.

That decision does not indicate that we will place any less emphasis on the importance of inland waterways. Indeed, the department will be more directly involved as it seeks to place inland waterways on a more sustainable footing through our work towards moving the British Waterways Board from being a public corporation, as has been mentioned, to a new charity in civil society. As I said, we will discuss that when we come to Amendment 86. For that reason, we do not think it necessary to continue to have the Inland Waterways Advisory Council. Noble Lords asked in simple terms how long it would stay around. We will consider precisely how long we need to keep the body in place when we have the results of the consultation on the British Waterways Board, which will be under way fairly soon.

Lord Phillips of Sudbury: I do not understand. Did my noble friend say that after the British Waterways Board is made an independent charity the Government would not need to have a policy in relation to inland waterways? If I have that wrong and the Government will still need a policy in relation to inland waterways-and it seems to me that they will-I still do not see what is wrong with this body as the conduit for that.

Lord Henley: The Government will always need to have a policy on these and a great deal of other matters, but policy should be a matter for the department,

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Ministers and the Government and not for a body such as this. Therefore, we do not see that it is necessary in the future. I cannot give a precise time as to when this body will disappear. That will be part of the wider consultation on the British Waterways Board and what we propose to create there. That, as I said, is something that we will discuss on a later amendment. With that explanation of our intentions, I hope that the noble Lord, Lord Faulkner, will feel able to withdraw his amendment.

7.15 pm

Lord Faulkner of Worcester: My Lords, I thank the Minister for that reply. I am sure that the members of the IWAC will have been heartened by his opening comments about the useful input that they have provided to waterways policy. He could have been a little more fulsome, but at least the remarks were made. They will appreciate that. The Minister has not been able to answer the question of how long this organisation will be around, which is unsatisfactory. I understand that that is due to a process of consultation. This is one of those areas where it would have been better if the consultation had happened before the Bill rather than the other way round, but that is true of so much of this part of the Bill.

The noble Lord, Lord Phillips, made the most telling point. It does not seem sensible to abolish a body such as the IWAC and then to find in two or three years' time that you have to reinvent it because that role is still needed under the new status of the British Waterways Board. We shall have to wait and see. I shall read carefully what the Minister said. There were some words of comfort, although his comments were not totally satisfactory. For the moment, I beg leave to withdraw the amendment.

Amendment 39 withdrawn.

Amendment 40 not moved.

Amendment 41

Moved by Baroness Whitaker

41: Schedule 1, page 17, line 4, leave out "Library Advisory Council for England."

Baroness Whitaker: My Lords, Amendment 41 is intended to be a probing amendment. The Advisory Council on Libraries developed the policy document that formed the basis of current public library provision. Public libraries are one of our national treasures and in all the countries that I have visited, including the most developed, I have never seen public provision to match them. Nobody would say that advice to the Government on how best to provide this unique service can be done only through a structure such as that of the ACL, but advice there must be or the provision will wither. Even the best educated policy officials do not have the skills and experience of professional librarians-nor perhaps the needs of many library users.

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It may be that noble Lords opposite do not themselves use public libraries much, but many of us do. More than 320 million visits are made to our public libraries every year, and that would include visits by primary school children who may have little other opportunity to experience the enjoyment of choosing and reading books. Many writers testify to the resources of the public library that started them on their careers. Over the weekend, the rising young pianist Paul Lewis was interviewed. From the age of eight, he made visits to the local public library to borrow albums of the music that he discovered. He was the son of an unemployed Liverpool docker. What use the public library was to him.

At my library, I see scores and scores of students using the library's resources as well as elderly people who may not be able to buy as many books as they want to read. It is no surprise that library use plays a part in driving up literacy rates and in raising and changing skills levels at all ages, as the noble Baroness, Lady Rawlings, said in Questions on 2 December 2010, at Hansard col. 1574. Public libraries help small business start-ups, promote healthier lifestyles and engage people in local democracy. They also help to bridge the digital divide by providing facilities and support to help the reluctant and fearful take the first steps towards digital skills. They are an essential player in the Government-sponsored Race Online 2012 campaign.

Libraries themselves do not necessarily have to be housed in separate buildings-as most of them are in their current form-but housed they must be, with enough room for their stock and for people to study it. What is government policy on public library development and where is the Government's expert advice to come from? The Arts Council has many responsibilities, a severely truncated budget and little expertise in libraries. In the absence of specific policy for this truly magnificent national resource, the Advisory Council on Libraries should stay. I beg to move.

Viscount Falkland: I rise to support the noble Baroness on her interesting probing amendment. Over the years, I have spoken several times about libraries, particularly during the previous Conservative Administration when there was some concern that local authorities were not supporting libraries as they needed to be supported to react to changes in demand, new technologies and so on. Libraries are as useful as they ever were. The demands placed on them may be different, but with an ageing society even those who are now young may turn to books when they get old.

I have a bad habit of reading a book and keeping one eye on the television to see whether there is anything on the breakfast programme that might be interesting. This morning, I caught an interview with a man who has just written a book about having been unjustly imprisoned for some time. He was asked by the interviewer how he dealt with spending so much time in solitary confinement in the United States. Without hesitation he said, "By books". Books are more than just information. There are people who say that books will not exist long after you are dead because books will be replaced by new electronic

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technologies, which have already had quite an impact. Such people are missing the point about books and particularly their usefulness to those who are poor, deprived or lonely-whom we find, I am afraid, in increasing numbers.

Local authorities often do not have the budgets to pay too much attention to the demand for libraries. I do not know-and in her interesting speech the noble Baroness did not mention-what the Advisory Council on Libraries does, but I take her point. When libraries in London, for example, decide whether to order new books, have more talking books or invite people to discussions and that kind of thing, what kind of advice do they get from the advisory council? I take her point that advice of some kind is obviously needed. Taking an overall view, as one would expect of a council of that kind, and seeing the changes in population, their needs and the budgets available, the advisory council may be able to spot things that make libraries better places.

When I have visited libraries in America, I have been impressed that there is almost always a cafeteria, which brightens them up. There are always bright colours and the impression of innovation, which goes apace with changes in the population. I support the concerns of the noble Baroness and am interested to hear how the Government view libraries and whether they agree with the idea-with which I disagree-that libraries have a limited lifespan. Do they agree that books are not only information but also therapeutic things to handle, whether they be history, biography or fiction? A lot of people ignore the fact that a book is paper that has wonderful print on it; there is the quality of the cover and all kinds of things. Particularly for people living through a stage in their life when they are lonely, depressed and poor, a book is a wonderful thing.

Lord Phillips of Sudbury: If the Advisory Council on Libraries is allowed to continue, it may be about to have its finest hour. I suspect that my local authority, Suffolk County Council, will be the same as many councils in having to shed a great many of its libraries on to charitable bodies that have yet to be formed. If ever there was to be a time when the advisory council came into its own with knobs on, it is surely in this important transition. Could the Minister say a little about that?

Lord McKenzie of Luton: It is with a degree of trepidation that I rise to speak on issues of libraries, particularly with my noble friend Lord Evans of Temple Guiting sitting on the Front Bench. He is of course far more knowledgeable than I am and has been engaged in this subject for a long time. I put the Opposition's position on this in relation to local government, where it has a big impact.

Like so many things we have discussed under Clause 1, there is here the potential demise of something without any clear indication of what will go in its place. This is especially bad for libraries given their vulnerability at the moment, and we know that local government has been subject to huge cuts. We can argue the macroeconomics of that but, even within the

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Government's framework, the front-end loading and the degree of cuts focused on local government are profound and give huge challenges.

To my regret, I do not use libraries much these days because of Front-Bench duties. A lot of the Minister's time will be eaten up by quite turgid policy documents and we miss the chance of reading that we might previously have had. Yet my local council, Luton, is striving hard to preserve library services. My mother-in-law, who is 91, thrives on the mobile service. You can see her light up when they come with the delivery of, I think, eight books at a time. She is surrounded by books; they are an important part of her life. If that were at risk it would be a problem.

The noble Lord, Lord Phillips, said that this organisation should have its finest hour at a time when libraries across the country are more vulnerable than they have been for many years. I was surprised by the extent to which there is still library provision in the UK. I think there are more library branches in the UK than branches of McDonalds or Boots. Apparently, 10 times more people visit libraries than go to football league matches. That is really encouraging and something we should cherish. It is not just about reading. There are something like 300 million visits to public libraries each year. Those visits play a significant role in driving up literacy rates, increasing the number of people adopting healthier lifestyles, raising skills levels of all ages, providing diversionary activity to reduce crime, building bridges in the community to aid cohesion, reduce radicalisation and improve integration, engaging people in local democracy and getting more people to vote.

We fear that the coalition cuts to libraries mean that an estimated 6,000 people-a quarter of librarians according to the Chartered Institute of Library and Information Professionals-will lose their jobs in upcoming years. That would prove an incredible indictment of what this Government is about. Plans to replace professional librarians with volunteers may protect some libraries but will inevitably jeopardise the quality of services. The effects of the cuts being faced are expected to be felt across the country, with North Yorkshire reducing 42 libraries to 18 over four years, Leeds axing 20 small libraries, and Cornwall, Brent, Lewisham, Hammersmith and Fulham, Richmond, Barnsley and Warrington also planning closures.

I ask the Minister whether the Government believe that untrained volunteers are any substitute for the services of professional librarians. What assessment have they made of the impact of library closures and reduced library services on efforts to improve adult literacy? How will the Government ensure that library closures and cuts to library services will not adversely affect those people who do not have access to the internet-the very poorest in our society? It is a route to that technology for many. Do the Government still believe that libraries are a vital lifeline for families with children, as well as elderly and vulnerable people? Have they assessed the likely impact of cuts to library services on those members of our communities?

I am conscious that we have conflated the cuts that local authorities face and the challenges that that brings with particular references to the Library Advisory

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Council, but losing the council at this time has very severe implications. I ask the Minister to comment on what would replace it, and what role that replacement would take in encouraging working with local government, given the challenges faced with the cuts that are being imposed.

7.30 pm

Baroness Rawlings: My Lords, I agree totally with the noble Baroness, Lady Whitaker, and all noble Lords who have spoken on the importance of libraries. They are our national treasures. Everybody has expressed very clearly the great importance of libraries and how we cherish them in every possible way. On a personal note, one of my proudest moments as chairman of King's College, London, was establishing the Maughan library in the old Public Record Office in Chancery Lane. Libraries have always been an integral part of my life.

This amendment, however, seeks to maintain the Advisory Council on Libraries as an advisory NDPB. The ACL is a statutory body which is no longer sufficiently flexible to be relevant to current structures, and whose functions are duplicated elsewhere. Local authorities have a statutory duty under the Public Libraries and Museums Act 1964 to provide a "comprehensive and efficient" library service. The Secretary of State has a statutory oversight and promotion of improvement role in respect of such local library services and a statutory duty to intervene when a library authority fails, or is suspected of failing, to provide that service.

It is important to make certain that the Secretary of State has sufficient support to fulfil his legal duties. However, the current system involves a degree of duplication. The Museums, Libraries and Archives Council provides information to Ministers about the 151 library authorities in England. Officials within the DCMS provide advice. The Advisory Council on Libraries also provides Ministers with information and advice. Abolishing the Advisory Council on Libraries will not save a lot of money, as ACL members give their time freely and it employs no staff. But neither will it compromise the Secretary of State's ability to fulfil his legal duties. Officials will work with relevant bodies in the absence of the Museums, Libraries and Archives Council to ensure that appropriate intelligence about the library sector is captured, and that mechanisms are in place to communicate it to the DCMS. Officials will continue to advise the Secretary of State on the use of his statutory powers in the absence of the Advisory Council on Libraries.

Knowledge of the sector is an essential criteria for recruitment to the ACL, but members cannot know about, or advise on, all issues. People involved with relevant expertise and knowledge will be brought together as required to supplement the skills and expertise available in the DCMS and its NDPBs. This flexible approach to the provision of information and advice has proven effective already in enabling the Secretary of State to exercise his statutory duty and will be adopted as an alternative to an established advisory council. By drawing together experts as and when needed, rather than convening a formal group with limited membership and which meets only three times

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a year, the quality and depth of the information and advice needed to support the Secretary of State in policy development and oversight will be improved.

I hope that has clarified the point on the advisory council and ask the noble Baroness to withdraw her amendment.

Baroness Whitaker: My Lords, I am grateful to all noble Lords who spoke and to the Minister for her detailed explanation. I thought that the point from the noble Lord, Lord Phillips, about the timeliness for continuity of advice for libraries was particularly telling. Although I shall read carefully the detail of what the Minister said, the problem of funding for the museums, libraries and archives and their transfer to the Arts Council provides real resource problems for exactly that continuity of policy development.

I know that a number of other Lords who support this amendment cannot be here tonight, so I shall certainly withdraw the amendment for the time being but I cannot promise not to return to the subject at report.

Amendment 41 withdrawn.

Amendment 42 not moved.

House resumed.

UK Border Agency: Visas and Passports

Question for Short Debate

7.37 pm

Asked by Baroness Hooper

Baroness Hooper: My Lords, I originally tabled this Question for Short Debate more than a year ago when a number of horror stories were drawn to my attention about the then relatively new regional visa application process. Before doing so, however, and in the light of the information that I had been given from a number of sources, I tabled a Question for Written Answer to find out how many complaints have been received about the work of the UK Border Agency in administering the new process, to which I received a breezy reply from the noble Lord, Lord West of Spithead, saying that no complaints had been received. Given the number of cases that I had heard about, the volume of correspondence in the press at the time-in particular in the Independent-and the reaction of ambassadors and high commissioners posted here who were clearly at the receiving end of a lot of requests for help, I was surprised at the Minister's reply, to put it mildly.

Perhaps I may illustrate this by quoting a couple of examples that were drawn to my attention. One was the case of a nun and her companion from the Dominican Republic, who wished to attend the celebrations to

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mark the 200th anniversary of the birth of the foundress of her order. With the guarantee of full hospitality throughout the short visit and payment of air fares also guaranteed, there seemed no reason why these two exemplary Catholic women should not be able to experience this once in a lifetime event. However, the original application was rejected, as was the subsequent appeal, without reasons being given and in spite of a considerable campaign mounted on their behalf.

Another example is that of a most distinguished retired diplomat. Indeed, he was a former deputy Foreign Minister for his country, who is married and currently living in London. He returned home to visit his sick relative and was told that he would require a visa to return to the UK and to his wife. He did eventually get the visa, but the process took months and it was very traumatic for him and for his family.

I can also quote the case of an elderly English woman living in Chile who needed to renew her passport. She discovered that she had to send it off to Washington, which alarmed her greatly and delayed the whole process.

These examples relate to Latin America, but there are many more that I could refer to, relating to other parts of the world as well. The problem common to all these cases was not just that visitors from some countries found they needed visas where perhaps they had not previously been required, but that they could not go to the British embassy in their home country in order to process the application. I discovered that the new regional system set up in, I believe, April 2008, meant that anybody from anywhere in the Americas, from Patagonia, through south and central America, Mexico and the USA, all had to make their applications to the UK borders centre in New York, online and in perfect English. This seems to be carrying centralisation to extraordinary lengths.

I am aware that the business of applying for a visa wherever you are-and whoever you are-can be tedious, time-consuming and irritating, but the UK Border Agency, on the evidence I have seen, appears to be making the process unnecessarily difficult, protracted, bureaucratic and unfriendly. I am also aware that the Parliamentary Ombudsman, in a report out almost a year ago, stated that the UK Border Agency provides "very poor customer service" and has repeatedly failed to read and reply to letters, keep proper records, keep case files together and notify applicants of decisions.

That report related mainly to asylum applications, for which the considerations may well be different. But do we really want other potential visitors to our country, who simply need to make a short visit, to visit relatives, to attend a conference or perform in a music or poetry festival, to have to go through such a bureaucratic and unfriendly system, which must make them feel unwelcome?

It seems perverse, too, that on the one hand, our education establishments are encouraged to recruit overseas fee-paying students and then the full rigours and costs of the visa application system are applied. This has certainly been mentioned to me frequently by people concerned about the subject and the need for our education establishments to be able to finance themselves independently. The same goes for the entry of people who wish to establish businesses and so on.

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It seems to me that although it may be undeserved, there is undoubtedly a widespread feeling that the whole system of visa applications is a nightmare and a daunting process. This perception may exist because the new, centralised system was introduced without any explanation or, as far as I am aware, consultation. For most people, the border agency is an anonymous, faceless body. Applying for a visa used to be a personal, face-to-face transaction and that has now become a long-distance paper transaction-or rather a long-distance online transaction. Obviously, for those who are not computer literate, who tend to be older people, this creates particular problems.

The time has come to ask the Government to review the work of the UK Border Agency, to find out whether the regionally-centred system is working according to plan-whatever the original plan may have been-and to make sure that complaints are followed up and that there is a clearly understood system of complaints. It may even be necessary to devise a system whereby short-term applications-because most of the grievances I have heard about have tended to be for short-term visits-are separated from long-term applications and treated more sympathetically and sensitively, and certainly differently.

With 2012 and the Olympics drawing ever closer, we really must get this right. I thank all those taking part in this short debate, and I hope that the Minister will be able to give us some reassurance.

7.45 pm

Lord Avebury: My Lords, the noble Baroness's interest in all matters Latin American is well known. Today, with remarkable timing, she has asked us to consider the work of the UKBA at the very moment when the Home Affairs Committee in another place has published a report on the subject this morning, echoing some of the criticisms the noble Baroness has made.

This is also the first time we have looked at Latin America-I think-since the Foreign Secretary delivered the Canning Lecture outlining a policy of greater engagement with the region, halting the decline of Britain's diplomatic presence there and giving it much enhanced ministerial attention. He said that at present, we are lagging behind Germany, France and Italy in our exports to Latin America and that was partly due to the transition from authoritarianism to democracy which had deterred investment and close political relations. He went on to say that now that most of the countries in the region were stable democracies, we would support ambitious free-trade agreements with the sub-regions of Latin America. In addition, we would broker a strategic alliance between Latin America and Europe on climate change, and work closely with our partners in the region on tackling drugs and violence, supporting sustainable development and addressing energy security.

These are indeed ambitious goals, and no doubt UKBA and UK Visas have a walk-on part to play in making it as easy as possible to travel between Britain and Latin America. There was a review of the services provided by UKBA, starting three years ago, with the announcement of the visa waiver tests in 2007. It was decided that Bolivia and Venezuela posed a sufficiently

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high level of risk to justify a requirement that short-term visitors from those countries would be required to obtain visas. In the case of Venezuela, there was an exemption for travellers using the new biometric machine-readable passports, because our main concern related to the ease with which old style Venezuelan passports could be forged or fraudulently obtained. Apparently there was some resentment in Bolivia about the way that it had been singled out by the visa waiver tests. Has our embassy posted an explanation for the requirement on its website, and is there an opportunity to revisit the decision to require visas if the values that go into the visa waiver tests alter as time passes?

As the Foreign Secretary pointed out, we have closed our embassies in El Salvador, Honduras, Nicaragua and Paraguay over the past decade. A citizen of one of those countries wanting to come here for business, marriage, studies or medical treatment has to apply to a visa section of a British embassy in some other specified country, which must be something of a deterrent. A citizen of Paraguay, for example, must fly to Buenos Aires twice: first to have his digital photograph and fingerprints taken, and then to collect the document he has submitted in support of his application including his passport. At least, that was the impression that I got from the website, and I hope the Minister will correct me if that is not right.

Passports, however, are issued by the Identity and Passport Office, an executive arm of the Home Office. I can well believe that when a British traveller's passport is lost or stolen, it does cause enormous problems. The IPO website deals only with passports lost or stolen in the UK. When I rang the IPO this afternoon to ask what the traveller should do if his passport is stolen, for example, in Asuncion, it was suggested that the traveller should telephone the FCO.

It cannot be said that the issuing of visas and passports would come high up on the agenda in the Foreign Secretary's programme for enhancing our relations with Latin America. It did not figure in the Canning Lecture and there is no mention of it on the FCO's website; nor does it come up in discussions with leading politicians in the region.

I had several meetings at the end of last year with people from Peru and Colombia where the main subject was the EU free-trade agreement with those two countries and its possible side effects. NGOs were concerned that the agreement would facilitate even more investment by EU-based companies in mineral extraction and oil and gas development without adequate consultation, particularly where the interests of indigenous people were concerned. There was no complaint about the procedures for issuing visas, which of course theoretically are the same in Latin America as in the rest of the world. There is, I saw, a variation between the visa centres in the time it took them to process applications, but at a quick glance the average processing time is no slower in Latin America than in the rest of the world.

The biometric information that has to be submitted with an application-10-digit fingerprints and a digital photograph-has to be generated at a specified visa centre, which may be in another country. If you live in Paraguay, for instance, where the embassy was closed in April 2005, you have to travel to Buenos Aires to

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apply there in person and collect your passport from the embassy in Buenos Aires when it has finished processing the application. It seems that an applicant from Asuncion would have to make two trips to Buenos Aires on top of the £220 application fee. I wonder whether it would be possible to come to an arrangement with France or Germany, for example, for their embassies to collect biometric information on our behalf.

7.52 pm

Baroness Miller of Chilthorne Domer: My Lords, I pay tribute to the noble Baroness, Lady Hooper, whose knowledge of Latin America and ear to the ground on all things Latin American have such benefits for this House. It is useful that she has secured this debate today to allow the Minister to update us on what has happened in the intervening year and to give us a flavour of a change of attitude, perhaps, with the change in government. Before I continue, I declare an interest as the chair of the All-Party Group on Bolivia and the chair of the All-Party Group on Street Children-the reason for the latter will become apparent shortly.

As we have heard, there were particular problems with the process when it changed over but the problem now-as I have heard it mentioned by people from both South America and central America-is perhaps less with the process than with the attitude. Indeed, that is reflected by the large community that we have living in London, whose members feel strongly that they are still not recognised in the UK as an ethnic group, a point that they have made time and again. They should be recognised as one, but there is no provision on the census form to ask whether people are Hispanic. Considering their numbers, I think that that would be a reasonable thing to do. The fact that they are not really recognised as a group has, I believe, a knock-on effect in their feeling about applying for visas.

My noble friend Lord Avebury mentioned that the Bolivians felt singled out. It was perhaps unfortunate that, even under a Labour Government, the two most left-wing Governments in Latin America-those of Bolivia and Venezuela-failed to get the visa waiver through. The noble Baroness, Lady Gibson, raised this issue in the House some eight months ago and was told of the various reasons for it. Have those criteria since changed and, indeed, would those people wishing to come and visit their relatives here for a short time, for example, be able to do so and to benefit from the visa waiver? We benefit from the many people who have come here. Perhaps they came here as economic migrants but they now work in some of the most invisible jobs in London, in cleaning in particular. Living as I do in Kennington when I am here, I often catch a bus home towards Elephant and Castle and meet them in the evening. We need to recognise that they, too, need their families to be able to visit without too much difficulty.

We heard today that the UKBA has lost thousands of asylum seekers through the system, which highlights again the question that the Government are at some stage going to have to address: amnesty for long-term residents. These people, who have been here for a long

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time, are working. Their children are probably in schools and their lives are made extremely difficult because they can have no legal status. We lose out as a country from the fact that they cannot pay taxes because they cannot officially exist. That is a problem-and all the more of a problem in these times of austerity.

Before closing, as we have the Minister from the Home Office replying to this debate, I want to mention the issue of Britons going the other way to Latin America. That is why I declared an interest as the chair of the All-Party Group on Street Children. It has been brought to our attention by a number of NGOs working in the area that the problem of sex tourism, where people from the EU are going to Latin America, is growing and that it is children whom those people are preying on. That is a big issue, so we should not think just of people coming from South America as the risk to the UK, which is what the reply from the noble Lord, Lord Davies of Oldham, to the Question from the noble Baroness, Lady Gibson, suggested. We pose a threat to them as well.

7.57 pm

Viscount Montgomery of Alamein: My Lords, like other noble Lords I congratulate the noble Baroness, Lady Hooper, on her splendid introduction. Nobody knows more about Latin America than she does and it is good to hear from her at all times. I want to follow up on one of her horror stories. A couple of years ago, the then Peruvian ambassador had difficulty getting his daughter back into this country because she was over 18. She was still resident at home in this country, because in Latin America people frequently stay on at home past 18 until they get married, so she was coming back. He had considerable difficulty getting her in and some of us had to try to intervene on his behalf to get that sorted out. It seemed fairly ridiculous. That is another example of a horror story of dealing with the UK Border Agency.

I am also happy to follow the noble Lord, Lord Avebury. He is not, unfortunately, my noble friend but he is a very long-time friend. We are the same age and have had all sorts of dealings together for many years. He mentioned Paraguay; I was fortunate to be the leader of the last parliamentary delegation there, so I feel that what he said was relevant and important. The Paraguayans are very welcome here but have considerable difficulty, as the noble Lord pointed out, in getting that sorted out. They have to go down to Buenos Aires as the nearest place, even though there is an extremely efficient honorary consul in Asuncion, who was extremely helpful on the visit that we made, so I am totally sympathetic.

As the noble Baroness, Lady Miller of Chilthorne Domer, did, I have to declare a multiplicity of interests. I am not only chairman of the All-Party Group on Central America but vice-chairman of just about every other Latin America-related group, as it happens-including the one shared by the noble Baroness, Lady Hooper, the All-Party Group on Latin America. That group encompasses them all, in a way, although there are separate subgroups that are equally important. Latin America is such an important area of the world that we need to concentrate on it.

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It is interesting to look at this subject because the number of countries in Latin America from which we require visas is quite small. It includes Bolivia, Colombia, Ecuador, Peru and Venezuela, plus the three island republics: the islands of Cuba and Hispaniola, divided as that is between the Dominican Republic and Haiti. Apart from that, people from all the other countries, including the whole of the Cono Sur-Chile, Argentina, Paraguay and Uruguay-and Brazil, as well as Panama and Mexico in central America, have no visa requirements to come here. It seems rather strange that these particular countries have been singled out for this sort of treatment. One wonders why.

I told the Minister that I was not going to ask her any awkward questions, but this seems to be a matter of some principle that we might like to have enunciated. How are the criteria that bring about these various and rather curious ad hoc distinctions between important countries in Latin America identified? It is an important part of the world, as has been pointed out. The Foreign Secretary, William Hague, has announced in the other place that the Government are making a new and special drive in relation to it. It is unfortunately correct that during the 12 years of the Labour Government the interest in Latin America heavily depreciated and declined, but one hoped-and it seems to have been the case-that when the coalition came into existence, with William Hague as Foreign Secretary, there would be a new and important drive. This seems to be part of it.

I congratulate the noble Baroness, Lady Hooper, on her effort in bringing this subject to our attention. I very much look forward to hearing what the Minister has to say.

8 pm

Baroness Nicholson of Winterbourne: I, too, am most grateful to the noble Baroness, Lady Hooper, for giving us the opportunity to debate this important subject. I have always received courteous and helpful responses from the UK Border Agency whenever I have had reason to contact its officials, either in country or in Whitehall. My most recent experience was of a difficult case that peaked over Christmas and New Year. Throughout that most difficult period, with constant telephone calls from me and my staff, we received nothing but helpfulness, for which I thank the agency.

The UK border officials discharge an exceptionally taxing task effectively and well, despite the considerable pressures that the agency and its staff are under constantly. They deal with one of the most basic human needs and desires: the freedom to move. With people in difficulty and trouble, there will always be an enormously emotional, as well as an effectively practical, exchange with the staff. The many people whom I have invited over the years from central and South America, the Middle East, central and eastern Europe and other places have never commented adversely on their treatment, even most recently, from the UK Border Agency. On the other hand, the policy is something that gives rise to considerable, consistent and powerful objections from all quarters.

The hub-and-spoke policy creates a routine that I and my visitors have experienced. It needs profound review and total overhaul. Noble Lords have spoken

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of many instances, but there are hundreds more available. I give just one. About a year ago, I invited 12 Iraqi high tribunal judges to visit me in Westminster so that they could see our own new supreme constitutional court and meet high-level judges both here and throughout the country. Some of those judges had already spent many months here on many occasions and were familiar with the United Kingdom, because we had been offering them training. The hub-and-spoke policy meant that those judges had to travel from Baghdad to Beirut and to stay there for more than 10 days awaiting visas. This is the most extraordinary process that any of us have ever experienced.

I can give your Lordships many more instances from different parts of the world, impacting not just on high-level judges but on businesses, industry, tourists and visitors. I do not wish to take up noble Lords' time, but surely implementing this policy must be deeply frustrating for UK Border Agency staff. I believe that the policy gives an insurmountable barrier to visitors on grossly unfair grounds. Who can afford to travel to the hub of the spoke system and stay there for many days awaiting a visa that they may or may not get? It is simply not a possibility. At the spoke end, staff of the British embassies become deeply and greatly frustrated because they face the frustration of those who apply, are told to travel, cannot travel and have to go away. Yet the British embassy staff are those who, at all times and in common with the UK Border Agency, are putting forward the best of Britain-the best face of the Untied Kingdom-and presenting us in our most positive light.

The hub-and-spoke policy, I therefore suggest, gives a shockingly false picture of our traditional welcome to visitors and guests to the United Kingdom. I suggest that this policy has failed lamentably and that the Government should review it as an urgent preoccupation and priority. After all, has the Foreign Secretary not declared that economic movement, investment, trade and business should be at the heart of foreign policy? Yet if businessmen cannot visit the United Kingdom without this extraordinary formulaic lunacy, how on earth is that foreign policy to be achieved? We believe powerfully-do we not?-in democracy and the rule of law, yet we put up these barriers in a policy that all who have discussed it with me at official, political or personal level have declared to be an utter disaster. I beg the minister to change it.

8.06 pm

Lord Rosser: My Lords, I, too, thank the noble Baroness, Lady Hooper, for securing this debate on an issue that, as the noble Baroness said, has previously been the source of concern to Members of your Lordships' House. Operating in some 135 countries, the UK Border Agency provides a front-line border control before people ever reach the UK. As we know, that is an important role, since over 75 per cent of the world's population require a visa to come to the UK and all businesspeople, workers and students staying longer than six months need a visa regardless of their nationality.

The UK Border Agency international group visa services directorate handles the overseas visa service and, as I understand it, at the start of 2009 managed

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over 150 visa application centres in British missions. Of these, 73 were spoke posts, from which some or all of the applications are transferred to a hub post, where the decision is made. In addition, there are large numbers of visa application centres run by the border agency's commercial partners and by the Department of Homeland Security in the United States.

In 2006, the independent monitor for entry clearance refusals, whose role was to oversee and review the visa clearance system, reported on the inconsistencies and lack of fairness faced by people when applying for visas. The report was made following visits to different parts of the world, including Latin America. Some three years later, in 2009, the independent monitor reported on what she described as an organisation under pressure and identified a number of issues for the UK Border Agency international group to address, including what one would have thought were fairly basic points, such as ensuring that all the evidence is taken into account when reaching a decision and ensuring adequate data capture.

A report by the Home Affairs Committee in the other place in early 2009 indicated that the independent monitor had said that refusals of UK visa applications were taking too long and were unintelligible. She also expressed concerns to the committee that UKBA staff were predisposed to approving entry to the UK because of the increased workload caused by visa refusals. We have heard examples this evening from your Lordships of apparently complex and time-consuming procedures for application that appear to at least some of those having to go through those procedures to be far from user-friendly and lacking in easy contact with a human being who can give information or guidance about the application. This, of course, is not some new or recent development, as the reports from the independent monitor make clear.

From the point of view of the Government of the day, over recent years there has been a desire to tighten up border controls and to have procedures and processes in place that are consistent and fair but achieve that objective. Overseas, all visa applications are checked against security, criminal and immigration watch lists and the e-Borders system allows the agency to vet passengers bound for the UK before they arrive.

While its focus is on protecting the UK by ensuring that harmful and illicit goods and people do not reach this country, the UK Border Agency-this has been said in the debate-also has an important role in facilitating the smooth passage of legitimate travel and trade, which benefit the UK economy. In 2009-10 the agency processed nearly 2.5 million visa applications, of which just over 2 million resulted in a visa being issued. The independent monitor identified in her final published report-her role has now been taken over by the independent chief inspector-that in just under 85 per cent of 906 cases sampled the refusal notices were reasonable and provided correct information.

In his annual report for 2009-10, the independent chief inspector states that he is now also reporting in his capacity as the independent monitor for entry clearance refusals and highlights four major recurring concerns, including the need for the UK Border Agency

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to make good-quality decisions, the need for agency staff to maintain and have reliable access to accurate case information and the need to treat people fairly and consistently. The independent chief inspector also states in his report that during his inspections he repeatedly found examples of agency staff not following the agency's own standards and guidance.

The UK Border Agency has as one of its objectives the implementation of fast and fair decisions, but the concerns being raised in the debate this evening, which seem to have been shared at least in part by the independent monitor and now by the independent chief inspector, are whether speed, consistency and fairness have been achieved to the extent that they should and whether the procedures and processes in place are always geared to taking account of the fact that there are very different categories of people making applications who are seeking to spend widely differing periods of time in the UK.

I am sure that when she responds the Minister will want to address the points that have been raised this evening, including the extent to which the recommendations and issues for action identified by the independent monitor, and the independent chief inspector now that he has taken over the role, have or have not been implemented and the progress that has been made. No doubt the Minister will also wish to say where the Government are with their review of the student visa system in the light of the criticisms of the student visa provisions.

More than 2,600 UK Border Agency staff are directly involved in the overseas visa operation, of whom around 350 work in London. Visa sections around the world employ just under 700 UK-based staff who go overseas on short-term postings and just over 1,600 locally engaged staff. Following the recent comprehensive review, the UK Border Agency is facing cuts of about 20 per cent and is expecting to take that percentage out of the front line as well as making cuts in support services. There were 1,700 job cuts last year and a further 5,000 are anticipated by the UK Border Agency over the period of the spending review. Obviously, the UK Border Agency employs many more staff than those directly involved in the overseas visa operation, which is the principal focus of the debate this evening, but will there be any job cuts among staff involved in the overseas visa operation and, if so, how many? Will the Minister give an assurance that, whatever job cuts are made by the agency, there will be no adverse impact on the quality of service and decision-making in the overseas visa operation, particularly in the light of the concerns already expressed about the current situation-this has been going on for some time-by the independent monitor and the independent chief inspector?

8.14 pm

The Minister of State, Home Office (Baroness Neville-Jones): My Lords, I join other Members of the House in congratulating my noble friend on introducing the subject of Latin America in the context of visas. That gives me the opportunity to say something about the Government's attitude to the relationship between this country and Latin America.

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The noble Lord, Lord Avebury, referred to the Foreign Secretary's recent speech at Canning House. If noble Lords have not had a chance to read it, I should inform them that it took place on 9 November. He said, in terms, that we will halt the decline in Britain's diplomatic presence in Latin America; Britain's retreat from the region is over and it is now time for an advance to begin; we will seek intensified and equal partnerships with countries in Latin America; and we will give much increased ministerial attention to them. I can testify to the fact, as I have been present at such meetings, that there is indeed a plan for a series of visits on different subjects to countries of the region. The Foreign Secretary's speech spells out in greater detail what that concept of an intensified relationship should mean in practice. I hope that the House welcomes that as a starting point as it signifies a determination on the part of the Government to develop a close relationship with, and make a greater impact on, an increasingly important part of the globe with great prospects ahead of it. I am sure that in the end that redounds to the security and prosperity of this country.

I am sure that noble Lords will say that our ability to travel backwards and forwards should contribute to that and that therefore travel should be made as easy as possible. The answer to my own rhetorical question is, "Of course and indeed; that must be the objective". The current hub-and-spoke system was introduced by our predecessor. I note the strictures of the noble Lord, Lord Rosser, on the system. Some cases that have been cited by noble Lords undoubtedly took place on our predecessor's watch. That apart, we need to try to make this system as friendly and efficient as possible for both parties; that is, for the authorities in this country and those who wish to visit here. The Government are conscious of this and so is the UKBA as an agency of government.

The noble Viscount, Lord Montgomery, quite rightly said that there are only nine countries which are visa countries for the purposes of short-stay visits. There is a wider visa regime-this is quite normal-for longer-stay visits. For short-stay visits, only nine of the 20 or so sovereign republics in South America require a visa. The Government were asked what the rationale was for the distinction between those countries that are required to apply for a visa and those that are not. The basic reason is the reliability of their documents. There must be doubt about the authenticity of the application in those countries where the documents being provided to support the application are of doubtful reliability. This is the main reason why in some countries we have to insist on a visa, although, as the noble Lord, Lord Avebury, noted in the case of Venezuela, if people are able to supply biometric detail they would be exempt. Over time one hopes that the reliability of the documents can be improved and that the number of countries where we demand a visa for a short stay can be reduced.

The aim must be a fast and fair process. I will spell out what we are trying to do to achieve that. As noble Lords clearly understand, the hub-and-spoke system has been operating since 2007. In Latin America, there are two hub countries: Columbia and Brazil. In Brazil, it is not in the capital; it is in Rio. The reason for this is

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that those two countries generate a sufficient number of applications to justify having a hub on the ground. Apart from that, it is a spoke system.

It is indeed the case that individuals have to apply online. There is no alternative, but I will come to some of the services that are allied to that in a moment. I understand the reservations that noble Lords have about the obligation to apply online and in English. All I can say is that, in the end, this will turn out to be advantageous to those making applications in a country where the internal distances are very great. I shall spell out why I think that is the case. Not everybody lives in Buenos Aires in Argentina; they may live in Patagonia, and so on. One has to be both realistic about the costs that we are expected to bear as the supplier of visas, but also about the relevant efficiencies for both sides of introducing modern technology into the system. I understand that the elderly are not always able to cope with a computer, but usually there is a young relative who can help them. So I do not think that we will depart from the notion that the application should be made online.

Once the application has been made online, there is then the question of the provision of biometric data. A number of noble Lords have said that this requires a journey. In the case of Asuncion, where unfortunately for some time now we have not had a mission, it would require a visit to Buenos Aires, which is the nearest point. One of the improvements that the Government are introducing to countries where this problem arises is the so-called mobile clinic, where people are available on the ground. This requires a suitcase-full of kit in order to be able to take people's biometrics. Increasingly we want to introduce mobile facilities, most particularly in those places where otherwise a long journey, possibly even to another country, might be required. I am not saying that that is going to be the case everywhere immediately, but the aim is certainly to make the system itself self-contained and more efficient.

Another complaint, not in fact mentioned this evening but which I understand to be the case, is that while the online system is painless for both parties if all goes smoothly and there are no hitches in the application, if there is something anomalous in an application it might result in a rejection. One of the other things that we are trying to do-and a lot of these services are now supplied by commercial partners of the Government-is to improve this with the use of the telephone, and not to require payment for that; that is to say that I can ring up and discuss this application with those processing it for me. I hope that, over time, this will reduce the number of rejections that take place for reasons that the applicant feels they need to appeal against. Of course, there are rules about the basis on which appeals can take place. Again, I come back to the point that we are trying to make the system efficient but also flexible and friendly.

In trying to improve the system that people are using, we must also have regard to the efficiency of the operation in New York, which is the processing centre for the Americas. I do not have to say that that situation will not change. A number of noble Lords asked whether we would nevertheless review the system.

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Within its terms, we shall do just that. The independent inspector will shortly review the operations of the New York hub and the relationship between that hub and its spokes. The review is within striking distance. If there are systemic problems with how the system is operating, I hope that this will be the opportunity for change and improvement to take place. I reassure the noble Lord, Lord Rosser, that notice is taken of what the independent inspectors say and do in relation to the operations of the UK Border Agency.

Apart from the regular review, if it becomes obvious that there is a problem with the system-and it is very important that we learn of the various issues that noble Lords become aware of-we would try to see if it was a systemic problem or something that was in need of correction. I assure noble Lords that under this Government the system will try not to be deaf but will respond to complaints about the inadequacies of the system if clearly there is something that we can do about them.

I hope that I have covered most of the points raised by noble Lords. I will give one statistic that I hope demonstrates that the system is both capable of improvement and is improving. In 2009, when some of these examples of slow procedure took place, it took up to 25 days to process applications from Latin America. By July and August last year-12 months later-the average time had fallen to nine days. I hope that noble Lords will accept that that is a significant improvement.

The agency is looking at one further thing that over time will improve the system. I cannot promise that it will happen immediately, but it is being trialled. Instead of the individual having to lodge their passport or travel document with British authorities while the process takes place, which I accept can be inconvenient and may inhibit their travel plans, we aim to move over time towards a situation in which there can be a remote printout of the visa at the spoke, which will mean that the document does not have to travel backwards and forwards. That will be a material change which depends to some extent on the technological capability of the spoke, which is also something that, costs allowing, we intend to try to rectify.

I am not able, I fear, to answer the question posed by the noble Lord, Lord Rosser, about staffing, but I shall write to him. I do not believe that in the case of the area we are talking about there will be moves of a kind that will decrease efficiency. I hope that I have answered the material points that have been raised.

My noble friend Lady Nicholson asked about Baghdad, which is outside the scope of this debate. It is fair to say that the circumstances reigning in Baghdad are exceptional. They are not typical of the system and the safety of our staff has to be taken into account. That lies in the background, among other things, for the arrangements that may prevail there, although I am not intimate with them. That is not typical of the hub-and-spoke system, or indeed of the conditions in Latin America.

8.31 pm

Sitting suspended.

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Public Bodies Bill [HL]

Committee (6th Day) (continued)

8.38 pm

Amendment 43

Moved by Baroness Hayter of Kentish Town

43: Schedule 1, page 17, line 7, leave out "National Consumer Council ("Consumer Focus")."

Baroness Hayter of Kentish Town: My Lords, although I now have no involvement with Consumer Focus, I was on the National Consumer Council-something that I gather I share with the noble Baroness, Lady Wilcox-before its merger with Energywatch and Postwatch. The merger in 2008 that created Consumer Focus, under the Consumers, Estate Agents and Redress Act 2007, was the result of extensive parliamentary debate. The merger was carefully designed-including here in this House-and was implemented with good planning as well as wholehearted and widespread support. The merger has created a highly successful independent champion for all consumers across England, Wales and Scotland and for postal services consumers in Northern Ireland. Consumer Focus has specific responsibilities for energy and postal services users-and, from next year, for water users in Scotland-and is admired around the world as the leading voice for consumers.

I have a number of fears about the Government's intention to abolish Consumer Focus and to pass its work to Citizens Advice. My concerns centre partly on the very different roles of Consumer Focus and Citizens Advice and partly on the duties that Parliament gave to Consumer Focus. I also have concerns about the impact on devolution, on consumer affairs and on accountability as well as on the capacity of Citizens Advice. There is also a fundamental concern about the undermining of consumer protection. Consumer Focus is not an advice or complaint-handling body but a policy and advocacy voice across the whole of consumer affairs with a record in industry-wide investigations and achievements. I have real concern about how Consumer Focus's work on behalf of consumers-the least represented group in our economy compared with unions or business-will be maintained.

Let me start by taking the example of a current consumer topic-this may sound an unusual issue-which is the volume by which bread and beer may be sold. Over the Christmas Recess, David Willetts, the Minister in the other House, started his new year by suggesting the abolition of the regulations that provide the 400-gram rule for the sale of bread and that require beer to be sold in pints and wine to be sold in specified measures. I emphasise that the National Consumer Council and Consumer Focus have never been pro regulation for the sake of it. Indeed, Consumer Focus has often championed and helped to obtain deregulation, for example, over dispensing opticians and over the numbers of licensed hackney cabs. However, it seems to me that in any such discussions on the issue of how bread is sold or whether beer should be sold only in pints, it is absolutely right that the voice of the consumer is heard.

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On such matters, producers will have their own view, whether that is about the profit that they can make or the freedom to innovate-which probably means selling smaller loaves. Government will have a view on whether, in the case of beer and whisky, a proposed change could affect the tax take, or, in the case of bread, on the cost of monitoring compliance. Regulators will have a view on competition and whether rules ease or hamper new entrants. However, where is the voice of the consumer without Consumer Focus? An experienced trading standards officer wrote to me when he heard about the possibility of bread quantities being changed and all those safeguards going. He said that he could not imagine that any well informed consumer would call for those changes. I do not know whether he is right or wrong, but I know that there needs to be a body that will obtain the views of consumers and reflect those in the debate.

Citizens Advice is much more focused on providing advice and guidance to individuals who come through the doors of citizens advice bureaux. Theirs is not the role of looking at market structures and at future regulation, in which Consumer Focus-independent of Government and with a specific consumer interest-is so expert.

Bread is just one current issue that requires what Consumer Focus can contribute to our national life, but another historic example is that of ombudsmen. Consumer Focus-then the National Consumer Council, which was possibly even chaired at the time by the noble Baroness, Lady Wilcox-made one of its most significant achievements for consumers by its original support for the concept of ombudsmen, which we all now take for granted. The National Consumer Council saw not only how consumers, once they knew that they could get their complaints heard and assessed independently, would have more confidence in the product or service but how businesses could learn from good systems of complaint handling and how regulators or the press could judge industries or individual suppliers from such intelligence. The ombudsman system has been copied worldwide, but the credit for this forward-looking advance for consumers must lie with the NCC as was. We risk losing that service to consumers by placing the policy function within an organisation whose local funding is seriously stretched and whose core function is to help those who come through its doors rather than to plan systems for decades ahead.

8.45 pm

I have six questions, to which I hope we may get some answers. The first is on Consumer Focus's duties. Under the 2007 Act passed by this House, Consumer Focus must have regard to the interests of vulnerable consumers, including the disabled or chronically sick, pensioners, people on low incomes and those in rural areas. The organisation must investigate complaints from individuals on electricity disconnections and can make representations to the provider. Consumer Focus refers enforcement matters to Ofgem and licence breaches to Postcomm on behalf of users. Its annual report must be laid before Parliament and Ministers. My question to the Minister is: what happens if Citizens Advice-a charity over which the Government can exercise no power-fails to carry out those statutory duties that were put in place to protect consumers?

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My second question is on Consumer Focus's powers. Consumer Focus has significant powers, such as the ability to seek information from business and regulators. It is not clear that Citizens Advice is able to take on such powers. Will government retain such powers to itself, with Citizens Advice having to apply in order to use them? Consumer Focus has the right to confidential information from business, regulators, government, trading standards and the OFT. Will those powers, including access to confidential commercial information, be passed to Citizens Advice? Consumer Focus can investigate matters affecting individual consumers or raise wider issues for consumers across the economy, including the public services. Will those powers pass to Citizens Advice? Where would Citizens Advice get the expertise to undertake such market studies? Consumer Focus provides advice to government, regulatory bodies, the European Commission and other parties. Will Citizens Advice be tasked with that role and given the resources to undertake it? Consumer Focus has access to information from the OFT, Ofgem, Postcomm, Ofwat and any partnership, corporate body or person, including in the public sector, that supplies goods or services. Will Citizens Advice be allowed access to such information? Consumer Focus has the power to make supercomplaints where markets are failing consumers. Will that power, and the resources, be passed to Citizens Advice?

Thirdly, I turn to devolution. The 2007 Act requires Consumer Focus to establish committees for Scotland and Wales and a postal services committee for Northern Ireland. Under the Government's proposals in this Bill, Consumer Focus will be broken up because Citizens Advice operates in England and Wales only. Indeed, Citizens Advice has only a very small office in Wales, with very little policy capacity. That is no criticism-it reflects the fact that Citizens Advice does a very different job from Consumer Focus-but it means there are serious concerns in Wales about whether Citizens Advice can take on the work. Consumer Focus Wales exercises statutory functions conferred on Consumer Focus in so far as they are exercisable in Wales. The Wales committee listens to consumers and stakeholders in Wales about what is important to them and then decides its work plan for Wales. How will the Government ensure that the decision-making continues to be devolved to Wales by Citizens Advice? How will the Government ensure that Citizens Advice in Wales has the capacity to continue the excellent advocacy and policy work of Consumer Focus Wales?

There are similar worries in Scotland, where Citizens Advice Scotland is quite separate from Citizens Advice in England and Wales. There is a real fear that Citizens Advice Scotland will not be able to take on Consumer Focus Scotland's role and expertise. Scottish consumer champions are particularly anxious. One of them wrote to me. She said:

"There is a great deal of concern here in Scotland where Consumer Focus has a high profile and reputation. I work with both Consumer Focus and Citizens Advice and feel that they are completely different. I just hope that the Government do not think, 'Aha, CAB equal volunteers equal cheap'. Volunteers can do a wonderful job, but they must be properly supported".

If I was being polite, I would say that there was little consultation, but I think that the truth is that there was no consultation-there was certainly no

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consultation with Cardiff and very little with Edinburgh -before the decision was taken that we see in the Bill. The Scottish Government have started to look at alternative solutions, as has the Welsh Assembly, but the truth is that no one outside Whitehall-indeed, no one outside BIS and the Cabinet Office, and I am not 100 per cent sure about BIS-thinks that the abolition of Consumer Focus makes sense.

Consumer Focus is UK wide, with a robust devolved structure and a strong European and global role. The Government's plans would result in there being no UK-wide consumer body. The emphasis on localism, with no voice on UK or EU matters, is a backward step in this regard, with the danger that British consumers will lose out once our international reputation was undermined. I ask the Minister whether the Government have given any consideration to that aspect.

My fourth issue is accountability. Consumer Focus is subject to judicial review, falls within the remit of the Parliamentary Ombudsman and is audited by the NAO. Consumer Focus's chief executive is an accounting officer who is personally and directly accountable to Parliament. The Government claim that this "bonfire of the quangos" would increase accountability. However, transferring Consumer Focus functions from a body that is accountable to Parliament to a charity that is accountable only to its board will reduce public accountability. Should this independent charity fail consumers, the Government would have no power to remove its chair or officers and Parliament would have no right to examine its plans, reports or activities. Is that the Minister's definition of increased accountability?

Fifthly, does Citizens Advice have the capacity to take over these very different functions? I am a great admirer of Citizens Advice for the advice that it offers to those who come through its doors. Citizens Advice engages thousands of volunteers who help millions of our citizens, but it is completely different from Consumer Focus. Consumer Focus has a track record of engaging with regulators and market participants on the operation of markets and regulated sectors. Consumer Focus has substantial sectorial expertise, plus the ability to apply lessons across the economy. It is true that Citizens Advice can derive intelligence from the aggregation and analysis of client experience, but it conducts only a handful of consumer research exercises each year, in contrast to the 60 research projects that are conducted by Consumer Focus annually.

The Citizens Advice mission derives from experience of disadvantaged and vulnerable consumers, whereas Consumer Focus is concerned with the operation of markets generally and with responsibility for all consumers. In addition, citizens advice bureaux face a funding crisis just as they are being hit by an unprecedented increase in demand. Some CABs are seeing their local authority funding being cut by two thirds, while the number of clients seeking help with debt, benefits and homelessness has doubled. Gillian Guy, the chief executive of Citizens Advice, has warned of the risk to the most vulnerable in the Government's benefit changes and predicts that the cuts to legal aid will affect citizens advice bureaux. Indeed, local infrastructure is already in danger of collapse in many areas. Gillian Guy has also warned the Government that her organisation is

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under no obligation to take on Consumer Focus's role and there is no guarantee that it could take on the watchdog's work. In her words,

"We can't make offers to consumers on what we can do for them and then fail on the offer".

For her, funding is the crux, as some local authorities believe it is easier to cut grants to bodies such as Citizens Advice than to make their own staff redundant. She has problems and queries about the money for the organisation's existing funding, let alone what will happen when it takes on this extra chunk of work.

However, my questions go further than the funding and encompass the individual resources, motivations, priorities and powers, all of which are needed if consumers are not to be vulnerable to the whims of the market. That brings me to my sixth and final point, which is about concern for consumers. Is the real reason behind the Government's intention to abolish Consumer Focus simply a lack of support for consumer protection? Citizens Advice will be able to do the job only if it is given the resources, but Consumer Focus has already had its budget cut by 17 per cent, with more cuts coming next year. There is no sign that Citizens Advice will be given sufficient extra money to take over the areas vacated by Consumer Focus and no decision has been made on whether Citizens Advice will get the legal powers to demand information from companies. Those powers were used by Consumer Focus to win a £17 million rebate for consumers from npower and a £15 million saving for ISA investors. My fear is that the Government are ending a 35-year tradition of supporting a body that has legal powers to win consumers a fair deal in markets that are dominated by the interests of producers. Citizens Advice will have its hands full taking on Consumer Focus's tasks and coping with the increased demands made of its bureaux alongside reduced funding. Citizens Advice is a federation of 300 individual charities. Yes, it is locally responsive, but consumer protection is essentially national and European, and perhaps that is what the Government do not like. It is not apparent how this move and the resulting cutbacks will deliver a strengthened consumer regime.

For reasons of time, I cannot go through all that has been said about the proposal, but my view has been echoed through all the press coverage of this debate. The Daily Mail said:

"Money Mail has no time for cash-wasting quangos ... However, Consumer Focus has proved a worthwhile champion for the downtrodden consumer. It has the strength, resources and power to take on large organisations in a way that others such as Citizens Advice ... cannot. Big business can call upon billions of pounds in any fight against the consumer, whereas Consumer Focus costs a mere £14 million ... if there is any way it can be saved, then it should be".

Martin Lewis said:

"This is a bonkers move. To remove an organisation that has made consumers £80 million ... leaves us without any state-funded body fighting for consumers. I'm a big fan of Citizens Advice, but it's a charity that focuses on individual advice, not attacking the minutiae of public policy. ... The focus and power Consumer Focus had to ask questions of big business and big government were integral to supporting consumers and will be a big loss".

The DailyTelegraph asked:

"Who will protect us now from being ripped off?".

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The Independent judged that the result would be,

"Consumers burned in the bonfire of the quangos".

The Observer questioned the wisdom of,

The Times said:

"Abolishing Consumer Focus is mad".

On behalf of all consumers, therefore, I beg to move this amendment.

9 pm

Lord Whitty: My Lords, I strongly support my noble friend's amendment. The way in which she has constructed her argument in terms of six precise questions behoves the Government to give a clear answer, either tonight or in writing, as to how they see the future for consumer protection in the regime they are proposing here.

I declare a past interest in that up until last month I was the chair of Consumer Focus. I am now much freer to say what I think. It was a great experience, both there and at the NCC. I am extremely pleased to see that the Minister replying is one of my predecessors and that one of her predecessors is also with us-the noble Baroness, Lady Oppenheim-Barnes. I am pleased to see them because they will know what we are talking about. I am sorry for the Minister, however, because the part that will suffer most from the loss of Consumer Focus is the part that was covered by the old NCC. The energy and post will have to survive in some form or other. Politically, it is not possible for the Government entirely to retreat from those areas. What will go will be the more general work on consumer protection, consumer law, the international dimension, as my noble friend mentioned, and looking at markets which are not necessarily at the top of the Government's agenda but which are at the heart of the experience of the average consumer and the most vulnerable consumer.

The bit of paper which the Government have provided as justification for this-I am grateful that we have a piece of paper-is deeply misleading. It says that the headline decision is to,

and that aim of the reform is to,

Actually, the Bill does none of that. It does not provide for any transfer, nor does it provide for any rationalisation. I appreciate that the department conducted a major consultation in relation to the consumer landscape and was considering several propositions in terms of rationalisation. I agree with the view of the previous Government and the current Government that some rationalisation was necessary but this Bill does not provide it. Instead, it confuses the position, as I shall go on to argue.

My noble friend outlined the recent history of the construction of Consumer Focus out of the National Consumer Council, Energywatch and Postwatch. There is, of course, a much longer history to which she also alluded. The late Lord Young-by whom I do not mean my noble friend on the Front Bench but Lord Young of Dartington-was a progenitor of so much in the consumer field and in 1975 he argued not only

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for the establishment of a membership organisation, now Which?, but also for the National Consumer Council and for a consumer congress. That was the high noon of the corporate state and he and others saw that a representation of consumers alongside employers and representatives of workers in trade unions was an important part of that structure. But the NCC has developed through changes in government policy and institutions and through the disappearance of the nationalised industries. It has survived through all this. The regime of the noble Baroness, Lady Thatcher, quite rightly looked at the possibility of dropping the NCC but backed away from it. It is not a route which this Government, in an attempt to create the big society and to engage with groups such as consumers, ought to be going down today unless there is more to the story than we have yet seen.

What happened in the intervening years since 1975 is that we had a whole construction of different consumer bodies as well as the NCC. The privatisation and liberalisation of nationalised industries led to consumer bodies being set up in different sectors, on a different basis and in many cases with different forms of funding. There was a confusing picture and the previous Government quite correctly decided that they needed to address that and bring a lot of those bodies together in Consumer Focus. The previous Government did not go as far as they intended, partly because of internal Whitehall barriers and partly because there was some resistance from some of the industries. But they took a significant step in the right direction. It is clear that Consumer Focus made the best of a bad job in the sense that we were covering only part of the consumer representation that was laid down in statute and paid for, in part at least, by taxpayers or by statutorily laid down levies in one form or another on the other sectors.

Rationalisation, therefore, was sensible. At one point I thought that the Government would come up with a rationalised body, pulling together several of the institutions that existed into something like Consumer Focus. They need not have kept the name but could have created a new and wider body. Had that happened I would have been a strong supporter. I do not necessarily think that the status quo is defensible or the best possible representation of consumer interests in the best possible world. But they did not do that. Instead, they seem to have backed off the rationalisation, and this Bill has different bits of consumer interest representation in different schedules. For example, whereas Consumer Focus is in Schedule 1 for abolition, the Consumer Council for Water is in Schedule 7 for limbo and Passenger Focus is in Schedule 3 and Schedule 5. I am not entirely clear what will happen to that. There has been some threat about what will happen to the consumer panels within regulators, including the one that my noble friend chairs in the legal services area. There is no clarity on how any rationalisation will take place. What is stated here as the main aim of this reform, rationalisation, is not provided for within the Bill. Instead, further confusion is provided for.

Consumer Focus has carried out functions on behalf of vulnerable consumers and the average consumer-because average consumers and even quite well-off

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consumers are often vulnerable in certain circumstances. I am always pretty vulnerable when I am dealing with a garage mechanic. Most people of my age and technological illiteracy are pretty vulnerable to people arguing on intellectual property or new technology, and I know that that is also an interest of the noble Baroness. It is not just the most vulnerable who we represent but the most vulnerable are probably likely to lose out most from these changes.

However, I will not argue with the Government that this body should always be in the public sector. There are arguments for moving it into the third sector. I am reinforced in that view by the attitude that the Government have taken to quangos in general-by not distinguishing between the role of quangos. Quangos are not allowed to lobby the Government and make public statements that are critical of government policy. It is difficult to do that when you are in the tradition of the NCC and Consumer Focus. You are always criticising or trying to improve government policy, the policy of regulators as well as the policy of public service providers. Therefore, it is quite difficult to maintain a degree of silence in that context. In that sense, it might be more sensible to move it into the third sector. It would still require significant public support and the Government recognise that. Unfortunately, they are not providing that support.

What is likely to happen is that two-thirds of the activity of Consumer Focus will be in energy and post. Legislation going through Parliament reinforces that role. In the Energy Bill-particularly in relation to the Green Deal-which had its Second Reading in this House just before Christmas, there are functions for Consumer Focus inherited from Energy Watch and a recognition by DECC and Ofgem that there is a huge role for a consumer representative body within this area. I do not think any government would be allowed by their supporters in the Commons let alone by the opposition to get rid of the energy role. I think that will largely survive. The post role will probably also survive because of the present propositions for the future of the postal service and Post Office network. I do not expect the Government to be hugely generous in providing for consumer representation in those areas but I believe it would be politically difficult for them drastically to cut the support they give to consumer representation, whether the body is in the public sector or in the third sector.

That leaves the rest of the economy. Consumer Focus, inheriting this from the NCC, looks at consumer protection, customer service, consumer law, the general principles of regulation in this area, the EU level representation to which my noble friend referred and the international dimension of it. The reputation that Consumer Focus and its predecessors have in this area is an important asset. My noble friend referred to cuts in the budget here. The previous year's budget for consumers in the rest of the economy, outside energy and post, is just over £5 million. That is going to be cut this year by about 30 per cent and indications are that next year it will be cut by something close to 80 per cent.

If it is intended to do that, and to switch this to Citizens Advice, we would expect some concomitant increase in the allocation to Citizens Advice-a partial

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if not a full one. There has been no such compensating allocation to Citizens Advice which, as my noble friend said, is under severe financial pressure itself because of the cutbacks by local authorities. There is no increase in the central government grant to Citizens Advice. It is not a transfer in terms of money because the money is simply being cut. The note we have been provided with says that the full transfer will not take place until 2013. By 2013, the budget will be less than 20 per cent of what it was last year. In terms of resources, what is there to transfer?

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