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As to bonuses and their linkage to performance, that is absolutely at the heart of what the Government have agreed with the banks today. I think that the critical new element is the linkage between the performance of the banks on meeting SME lending targets and the pay of the chief executive and the other senior executives who are directly responsible for that line of business. Therefore, it is a crucial point. It is well made by my noble friend and it is at the heart of this agreement.

Lord McFall of Alcluith: I refer the House to the Register of Lords' Interests, as I have an interest in this area. Does the Minister not agree that there is still too much wriggle room on the issue of transparency for the banks and that one of the big issues in this crisis was the mispricing of risk? Therefore, the more people whose salaries are known-particularly, for example, traders, although I do not know whether that is taken into consideration here-the better in terms of aligning the risk. When we talk about bankers' bonuses and anger, the Governor of the Bank of England had it right when he appeared before the Treasury Select Committee a few years ago and said that the incentive structure in banking was distorted. Do the Government not agree that we need to tackle that issue to ensure that we restore trust and confidence in the banking sector?

Lord Sassoon: Indeed, I completely agree with the noble Lord, Lord McFall. With regard to the Merlin agreement, the fact that the five highest-paid senior executive officers now come within the remuneration disclosure is very important. As the noble Lord will know, senior executive officers typically encompass not only those responsible for managing the key divisions but also people such as the chief financial officer and the chief risk officer, who are at the heart of controlling risk in the system. Therefore, I think that the noble Lord's point is very well made and, as I said, the Government will consult on this issue in the forthcoming year.

Lord Newby: I think the Minister for repeating the Statement and I agree with him that the noble Lord, Lord Eatwell, should surely be directing his moral outrage at his colleagues-not least the noble Lord, Lord Myners. If it was so easy to make all the changes which he is castigating the Government for having failed to make, I wonder why none of those changes was implemented by his Government.

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A number of measures in the Statement are welcome. I welcome the fact that cash bonuses for the part-nationalised banks are limited to such a small amount. The noble Lord, Lord Eatwell, may not think that £2,000 maximum cash bonus is a change, but if you ask bankers whether they think that it is a change, I suspect that they would have a different view. I also welcome the fact that the banks in their statement said that they aim to foster more demand in lending to SMEs. Given that the view of the SME community over the past two years has been that those banks have been thwarting demand and that one of the main problems has been the attitude at the top level of those banks on lending to SMEs, if senior management in those banks get their regional people to foster more demand for loans, there will be more loans. That is clearly what we want.

I want to make two points for now. First, there is a rather curious suggestion about consultation on disclosure of the highest paid earners. That is the proposition that the banks should publish the pay of the board plus eight of the highest paid senior executive officers. Eight seems to be a figure plucked out of the air. Surely it would be more sensible for the Government to consult more widely and, in particular, to consider whether disclosure should not apply to everyone in the banks who earns above a certain amount.

Secondly, as the noble Lord, Lord Eatwell, pointed out, the Banking Commission is the next part of the story in the operation and regulation of the banks. The Statement simply states that the Government are looking forward to receiving the recommendations of the Banking Commission. That is an extremely weak statement. It implies that the Government will receive them, say thank you very much and then leave them on the shelf. Can the Minister reassure me that the Government will be minded to accept proposals from the Banking Commission and will not simply regard this as an academic exercise?

Lord Sassoon: I am very grateful to my noble friend Lord Newby for expressing some of the sentiments that I wish I had expressed as succinctly as he did about the Opposition's abject failure to have gripped these issues earlier, and for pointing out what a dramatic difference a mere £2,000 in cash makes to a senior banker who, under previous arrangements, would have been expecting to receive many multiples of that.

We will consult on my noble friend's specific questions and have no presumption as to where the outcome of the consultation will be on the remuneration/disclosure issue. There is no particular magic about the number eight, but eight plus two executives on the board, which there might typically be, would total 10. That is about double the number disclosed in, say, the US or Hong Kong so we are already exceeding disclosure in the US and Hong Kong and going further to a position which might double the number of directors whose remuneration is detailed. That seems to be a good point to start a consultation, but it will be an open one.

As for the independent Banking Commission, I can absolutely confirm that the Government do not remotely regard this as an academic exercise. We appointed the

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commission early after we took office because we thought that it was so important to get to the bottom of the issues about the structure of the industry, "too big too fail", and so on. When my right honourable friend says "Look forward", he means in a positive sense look forward to what will be a serious and important piece of work.

Lord Liddle: My Lords, many commitments in Project Merlin-such as more lending to more businesses in the regions; the establishment of the equity fund promised in the Rowlands review, which was an initiative of the previous Government, as the Minister will remember; and, indeed, the support for the big society, if that comes off-if delivered on, and it is a big if, are welcome, and no one wants a vendetta against an important industry such as financial services. However, on the central question of remuneration, the Government have set themselves the important test that it should be fair and reasonable. On that basis, does the Minister agree that the Government's proposals fail that test? Does he think that the £9 million bonus that Mr Bob Diamond will get from Barclays is fair and reasonable-yes or no? It seems to me that the Government have to be clear on these issues. That is particularly true for a Government where the Secretary of State for Communities and Local Government seems to think that the problem of local authority cuts can be solved by cutting chief executives' pay. That is populist politics being played in the public sector, but will the Government play honest politics when dealing with bankers' bonuses?

Lord Sassoon: My Lords, today is precisely about honest politics. In answer to the first part of the noble Lord's assertions and questions, there may have been plenty of good ideas floating around-whether it was the Rowlands review, the tax code for banks, the big society bank; I could go on and on and on-but the previous Government were completely unable to deliver on any of them. My right honourable friend has today set out hard delivery on so many of these issues. As for the question of remuneration, I believe that the deal on remuneration that has been done today on behalf of the British taxpayer and the British people is a fair and reasonable one. I certainly do not know, and do not wish to know, the individual bonuses that hypothetically may go to people, and I do not intend now or in the future to comment on individual banker's bonuses. The critical thing is that we now have a fair and reasonable deal between the Government, as the representative of the taxpayers of this country, and the banks, and it is one that will be enforced.

Lord Risby: My Lords, would the Minister care to consider the impact of the failure of the tripartite regulatory system in the context of European regulatory arrangements and our credibility not only in the European context but in the domestic context as well? Does he think that after this disastrous failure of policy, a new regulatory framework is urgently needed to put stability back into the system?

Lord Sassoon: I completely agree with my noble friend Lord Risby that at the heart failure of the failure and the heart of what needs to be done is the

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need to get the British regulatory system back on to an even keel. That is why we came forward with ideas in opposition and consulted widely on them even then. We have also moved fast in government. Only last week the appointment of the prospective head of the new consumer body was announced. We will continue urgently to roll out our proposals on the new regulatory structure. I absolutely take my noble friend's point that in the context of the United Kingdom's standing internationally, the leadership that we have shown in getting a new structure in place has been very much understood and respected by our peer group in Europe and more widely.

Baroness Kramer: My Lords, does the Minister not agree that it is absolutely crucial that a significant portion of the new lending should go to small businesses in areas of deprivation and to areas that will suffer severely from job cuts in the public sector? As a consequence, what will he do to encourage the banks to take a more sophisticated view of credit analysis so that micro-companies and new companies, which are the best hope in those areas, have access to funding, rather than just well-established small entities?

Lord Sassoon: I am grateful to my noble friend for allowing me to emphasise that the banks have at the heart of their intention on all lending to make sure that there is absolutely universal coverage across the United Kingdom. On the question of how businesses are put in a position to come forward, one of the most important elements of the banking task force is its proposals for mentors for businesses. Whether that is mentoring businesses to put them in a better position to apply for and take up loans or having a much clearer system of principles around lending and appeals processes, there is certainly a package of measures which goes to the points my noble friend rightly makes.

Lord Maples: My Lords, may I suggest to my noble friend that the central issue here is the rate of growth of credit, which is at the bottom of all banking crises? It does not matter what system of regulation is in place if it does not bring the rate of growth of credit back in line with the rate of growth of the economy. There has been a considerably faster rate of growth in credit. If that continues, we are going to have another banking crisis, whatever the system of regulation may be. Perhaps I may ask a specific question. One of the reasons the banks have made so much money over the past couple of years is that the Bank of England has been lending them money-money that it does not have, incidentally-at an interest rate of around 0.5 per cent. The banks have been able to lend that money on at 4, 5 and 6 per cent and thus have made a huge amount of money, out of which they are paying bonuses, presumably on the basis that it has been their clever management that has made all this money. Has my noble friend pointed out to them the value of this subsidy, and has he indeed calculated the value of this subsidy towards banks' profits? We needed to help them rebuild their balance sheets, but that was why they were being lent money cheaply by the Bank of England. They are booking that as profits, attributing it to their own clever management, and paying themselves bonuses out of it.

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Lord Sassoon: My Lords, because of the failure of the regulatory system and because of the huge over-leveraging in the economy, it was absolutely necessary for the previous Government to take drastic measures to get the banking system back on to an even keel, and of course that did mean that a number of measures were taken by the Bank of England to pump in liquidity under special schemes which always were time-limited and will have to be repaid. That was a necessary part of the rescue of the system. As I say, those measures are time-limited. It is precisely a combination of those measures and making sure that the banks, with the capital and liquidity available to them, now focus on advancing the resources they have to the small and medium-sized enterprises of this country that is at the heart of the agreement today.

Trade and Investment


9.48 pm

The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Green of Hurstpierpoint): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Business, Innovation and Skills.

"Today, I turn to one of the main building blocks of economic recovery: achieving growth through international trade and by attracting inward investment. Britain makes up just 4 per cent of the global economy. Without aligning ourselves to faster growth elsewhere, we cannot hope to prosper, but to do this we have to do better than in the past. In the last few decades, we have consumed too much and exported too little. While our competitors were sending manufactures across the globe, we were building a property bubble. Now, with Germany exporting over three times as much as Britain, it is vital to turn this around.

We have also done better in attracting inward investment. We are one of the top three recipients of foreign investment in the world and are home to more European headquarters of overseas companies than all the other European countries put together. Inward investors do not just provide jobs, they also provide 30 per cent of our R&D. However, there is no room for complacency in an environment that is increasingly competitive. This White Paper therefore sets out a strategy for creating opportunities, for providing the conditions for private sector growth through trade and investment that will help to rebalance our economy, and for securing the benefits of greater trade and investment openness for the world's poorest people.

The Government want to focus on SMEs, which are much less engaged in trade than bigger companies. They have told us that they want to take advantage of the opportunities, especially in emerging markets, but cannot always access the trade credit insurance or finance to take the risk. Since the economic crisis, they feel that it has become much harder to get cover from private credit insurers at reasonable rates, so we will create several new government schemes and extend one existing scheme. These will be launched in the coming months.

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First, BIS will launch an export enterprise finance guarantee scheme that offers export finance valued up to £1 million to SMEs. Secondly, the Government's Export Credits Guarantee Department will launch an export working capital scheme for those not eligible for the export enterprise finance guarantee scheme, which will offer export finance in amounts of over £1 million. Thirdly, the ECGD will launch a bond support scheme under which the Government will share risk with lending banks on the issue of contract bonds and, fourthly, it will launch a foreign exchange credit support scheme that will support banks offering foreign exchange hedging contracts to SMEs by sharing the credit risk. Fifthly, the ECGD will extend its short-term credit insurance scheme to cover a broader range of exports, including those of SMEs. In addition, UK Trade & Investment, or UKTI, will increase its focus on emerging markets and on helping SMEs. It will launch a new online service offering access to sales leads around the world.

All Ministers have been asked to support our trade diplomacy. I have led or supported the Prime Minister in high-level trade delegations to Brazil, India, China and Russia with business representatives promoting exports and seeking inward investment. We will do more of the same this year and beyond.

However, half our exports are to the EU, and consequently we have a strong interest in ensuring that the EU grows. That makes the completion of the EU single market even more vital. Some recent analysis suggests that trade between the UK and other EU member states could be as much as 45 per cent below potential. This is largely because of significant non-tariff trade barriers. Completion of the single market could translate into 7 per cent additional income per capita per UK household. We therefore strongly support efforts to remove barriers to trade-particularly for SMEs in fields such as e-commerce and low-carbon products and in professional and business services, where there are currently an estimated 3,000 regulatory requirements-as well as pressing for energy and agriculture liberalisation.

At the international level, completing the Doha round is one of our top-level objectives. Finishing these trade negotiations could deliver a £110 billion boost per year to the global economy. We have spent 10 years negotiating and need urgent action now to agree the key elements of the Doha deal this year, so I am glad that momentum towards a deal seems to be building again. Britain will do its utmost to get the WTO past the finishing line this year. Doha is the top priority, but we will also pursue an ambitious programme of EU free-trade agreements with our main trading partners, including India, Canada, Singapore, the South American Mercosur countries and, we hope, Japan, following the recent agreement with South Korea.

Finally, the UK is committed to assisting poor countries to take advantage of the opportunities presented by an open global trading system. International trade is one of the most important tools in the fight against poverty, and research evidence shows that countries without trade barriers have growth in per capita incomes three times faster than in other developing countries. We will therefore ensure that trade is a central theme

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across our bilateral aid programme and promote regional integration, notably in Africa through our Africa free-trade initiative. Helping the developing world in this way is the right thing to do, both on moral grounds and in Britain's economic national interest.

This White Paper sets out an ambitious direction for the UK and will guide the Government's work on trade and investment. We will implement it vigorously and actively, and I urge British business to seize the opportunities it will present. That way, we will all benefit from the vision it sets out: an open trading system and a competitive British economy, driving growth and jobs. I commend this White Paper to the House".

My Lords, this concludes the Statement.

9.55 pm

Lord Young of Norwood Green: My Lords, I thank the Minister for sending me a copy of the White Paper earlier today and for notice of the Statement. I welcome the broad thrust of the Statement, so far as it goes. However, may I remind him that exports alone will not deliver without a credible plan for growth across our economy? Putting new tyres on the car will not make it perform better if the engine has not been fixed. We welcome the importance given to exports and export support, and support the increased focus on the major emerging markets such as Brazil, China and India without neglecting our longer established markets. We also welcome the commitment to opposing protectionism and promoting free trade. Subject to the detail, we will support the particular measures that the Secretary of State proposes to develop export support for SMEs, although I hope the Minister can give us a timetable for their implementation. I hope he acknowledges that all those measures build on work done by the previous Labour Government.

Like the previous Government, this Government are committed to the completion of the Doha round of global free trade talks. Given the difficulties that those talks have had in the past, can the Minister tell the House what specific new initiatives he will take in the coming year to ensure that talks are completed successfully? His predecessor and my right honourable friend the former Prime Minister played an active and engaged role in trying to move the WTO towards agreement. What personal role has the Secretary of State played and what commitments has he gained from the Prime Minister about his personal involvement in securing agreement this year? Does the Minister accept that the Doha round must foster development, and will he respect and build on the work of his department and the Department for International Development under the previous Government to ensure that trade agreements support poorer developing countries? The White Paper recognises the potential benefits of completing European free trade agreements. What specific new initiatives will the Secretary of State take within the Council of Ministers to get things moving forward? Finally on Europe, what specific measures will he take to broaden and deepen the single market, as the White Paper puts it?

There appear to be some significant problems underlying the White Paper. Can the Minister assure

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me that the cap of £25 million does not create a gap in export support for mid-range companies? Will he confirm that the UKTI budget will be cut by 19.5 per cent in real terms? Given the expansion of activities in the White Paper, where and how will cuts be made without damaging support for exporters? What role will the Science and Innovation Network play in supporting the export strategy? Does the Minister recognise that a successful export drive depends fundamentally on having goods and services to sell and on having the companies that can provide and sell those goods and services? Does he therefore also recognise that the Government's reckless approach to deficit reduction is damaging the prospects for growth and jobs? Can he tell the House why the strategy for growth has still not been published when he promised it in October? Does he acknowledge that the new director-general of the CBI has now joined the previous director-general in criticising the Government for having no plan for growth? Without a clear vision for the economy and a plan for growth, we will not have enough companies to export all the products to sell.

Will the Minister confirm that pharmaceuticals and the life sciences are some of the knowledge-based industries by which we can hope to earn our way in the world? Last week, Pfizer announced the closure of its Sandwich plant. Is that not a chilling message that one of the world's leading pharmaceutical companies looked at its global activities and decided that it no longer needed to be in the UK and that it could afford to leave the UK outside its global research strategy? How much more investment will we lose before this complacent Government produce a credible plan for growth?

The White Paper says that the Government will invest in UK infrastructure. Will the Minister confirm that the introduction of universal broadband has been delayed by three years and that there is no credible plan for fast broadband? Does he accept that those failings make the UK a less attractive place for investment by companies that support the digital economy? Does the Minister recognise that a recent report by Experian and the National Endowment for Science, Technology and the Arts concluded that there are companies with the potential to grow and export in every region of the country and in many different sectors of the economy? Does he recognise that regional development agencies often work with UKTI to support exporters? The Secretary of State has abolished RDAs, but can the Minister explain why the White Paper contains only one passing mention of regional support for exporters and support for exporters in the regions? How will he ensure that potential exporters get the right support in every part of the country?

The White Paper praises higher education as a gross export earner of £5.3 billion, so why is the Secretary of State supporting changes to student visa policies which will do real harm to the country's seventh biggest export earner and undermine our long-term trade and development interests? The White Paper speaks of investing in science but does the Secretary of State recognise that, with science investment cut in real terms and other countries increasing their science investment, we are in danger of losing world leadership in this area?

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We welcome the recent performance of manufacturing exports which have taken advantage of the competitive pound. Will the Minister confirm that the strength of the manufacturing sector has been supported by the previous Government's support for science research and development tax credits and capital allowances and that, in the worst of a global recession, the scrappage scheme, Time to Pay and flexible tax credits all helped manufacturers to retain more of their workforce? Does he recognise that we now have a unique opportunity to use manufacturing exports to strengthen the supply chain companies and to develop the next generation of world-beating export products? What is he doing to ensure that we take advantage of that opportunity? There is much common sense and continuity in the White Paper and no need for artificial arguments about it, but the Minister must recognise that its impact will be severely limited without a credible plan for growth.

10.01 pm

Lord Green of Hurstpierpoint: I thank the noble Lord, Lord Young of Norwood Green, for those comments and for his recognition that there is a great deal of common ground on what it takes to enhance British trade performance and to ensure that we remain an attractive place for inward investment. We all recognise that British trade performance has been inadequate for a very long time. That goes back many years, if not decades. As we look for ways to achieve stable growth going forward-we are coming out of a crisis which itself followed a period of clearly unbalanced growth-we all recognise that we need to rebalance the UK's growth model. It is clear that trade and investment will have to play a key role. It is no longer possible to grow the economy by consumer demand fuelled by excessive borrowing. It is plain that government spending will not drive growth for all the reasons of which we are well aware. Therefore, it is inevitable that those sectors of the economy which contribute the rest of the demand-for example, investment and the external sector-will have to drive growth.

I absolutely agree with the noble Lord that manufacturing will play an important role in this. Although the trade statistics at the moment are not good and show that we have plenty of work to do, there are some encouraging signs about manufacturing's contribution to exports. There is much work to be done. I say as someone who is relatively new in the job but who has spent some time going round the country meeting exporters-large and small, big companies and SMEs-that I am confident that there is a great deal of talent and energy raring to go. The measures that we have announced in today's White Paper, in particular the measures concerning the ECGD on the one hand and the UKTI on the other, will provide very useful support to those companies as they seek to achieve their aspirations.

The noble Lord raised a number of other questions about pharmaceuticals. There is no question but that the news about Pfizer is very sad for Sandwich. All the indications are that it is not a reflection on Britain but is part of Pfizer's global strategy and dealing with its specific issues. I assure him that Ministers and the Government are taking this issue very seriously and

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that my colleague-one of the Ministers in the department for business-has been down to Sandwich and is in discussion with a number of entities that are making contributions to getting the site partly used and possibly saving some jobs. It is early days yet on that but we are working hard on it.

It is clear that the Government have credible plans for growth. It is interesting to note that Sir Richard Lambert's speech referred to a couple of things that he considered to be very important in terms of growth. One was providing better finance for SMEs, which we have done, and one was ensuring that UKTI focused more on SMEs and we have done that. Indeed, the warm welcome for today's White Paper from the present director-general of the CBI reflects the way in which we have responded to an obvious gap in the support for SMEs.

I believe that we are making progress. As we say in the White Paper, this is absolutely a marathon and not a sprint. A weak trade performance is something that this country has lived with for a long time and it will not be cured by waving magic wands. If there were any magic wands to be waved, they would have been waved by now. However, what we have set in place now will, over time, make a serious contribution to enabling more businesses to get involved in international trade.

10.05 pm

Lord Razzall: My Lords, I thank the Minister for repeating the Statement made in another place and congratulate him on what I suspect is his first Statement in your Lordships' House. I count eight Ministers who are present. I do not think that they are here to monitor the noble Lord's performance; I suspect that they are here for other reasons.

I wish to ask the Minister two questions. First, having listened to the banking Statement by the noble Lord, Lord Sassoon, and this Statement-both of which I welcome-I am concerned about the practicalities of what is being suggested. This Statement indicated that there would be a significant increase in grant to the SME sector and the banking Statement indicated that the Project Merlin agreement would produce an increase in lending to SMEs of £66 billion to £76 billion. However, given the present culture of the banks, I worry that they will not be able to deliver that increase in lending, however much the Government aspire to that in the agreement. Those of us who have dealt with the clearing banks as SMEs know what actually happens. You go to your relationship manager-it does not matter whether it is Barclays, RBS or who owns the bank-and he or she says, "Yes, that is fine. I think we'll recommend that loan". Then the matter is passed to a credit committee, the members of which you have never met, and they often turn it down or come back and say, "It's got to be 7 per cent over LIBOR". How will the Government deal with the change in culture that will be necessary on the part of all the clearers if they are to deliver the loans and the business for the SMEs that are necessary to achieve the growth that the Minister, and indeed all of us, wish for?

My second point relates to UKTI, which is definitely within the Government's control. In practical terms, if an SME wants to use UKTI to generate sales overseas,

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it gets in touch with it and someone at UKTI says, "Fine, I'll let you know what sales expertise we can provide you with and what possibilities there are so long as you pay us £3,000". Will the Government ensure that UKTI does not charge people for that element of expertise? That is an important point as that matter is under the Government's control.

Lord Green of Hurstpierpoint: I thank my noble friend Lord Razzall for his comments. I absolutely agree with his first point about the practicalities. As I said, this is a marathon, not a sprint. One of the reasons why that is true is that the production of a White Paper is not the culmination of a process but the beginning. The next step is to translate the White Paper into a large number of action steps, assign responsibilities, time lines and all the rest of it, and drive it through. One of the most important aspects of what we have announced today in the White Paper-this may seem a rather bureaucratic point but I absolutely underscore its importance-is the creation of a new interministerial committee. It is, in fact, a sub-committee of the Cabinet Economic Affairs Committee and the Prime Minister has asked me to chair it. The committee will bring the Ministers in different departments involved in this whole project together on a monthly basis to drive these actions forward. It is in that context that we will review how well it is all going and make any adjustments as we go along.

My noble friend raised some particular issues about banks. For reasons that the House will understand, I am slightly nervous about commenting on banks, but I think there will be considerable recognition in the banking community engaged in commercial banking in this country of the force of a good deal of what my noble friend said. For example, he spoke of the need to ensure that in the context of businesses where there are credit committees and so forth-and rightfully so-nevertheless there is a real relationship that we need to keep alive with individual firms, even small ones, so that there can be a real understanding of the needs of the business.

I do not think anyone in this House would want to go back to some of the culture of lending prevalent in the go-go years in the early part of the previous decade, when lending was carried on as if it was going out of style. There is a need to introduce some prudence and credit control into banks' business if we want to ensure that banks themselves are stable and profitable. But that must be balanced with an appropriate understanding of the real needs of businesses. We need to monitor that. The Merlin agreement that was announced by the Chancellor of the Exchequer in another place this afternoon includes agreements by the banks on this front, and the Government will hold the banks to account on it.

I have had the opportunity in recent weeks of meeting a number of UKTI people both here and overseas and my experience is that on the whole it is a good institution. There is always scope for improvement, certainly, and in any institution employing some 2,500 people you will find those who are average in quality and those who are very good. But coming at this from the outside, I am impressed by the dedication,

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hard work, commitment and enthusiasm of UKTI people in the many offices that I have had the opportunity of visiting.

On the specific question of whether to charge for its services, the Government believe that it is appropriate to charge for some UKTI services, but there are plenty of services that are not charged for. OMIS-I am afraid that I cannot remember what that stands for-is a service that is charged for, but generally the feedback is that it is widely welcomed.

Lord Lang of Monkton: My Lords, I warmly welcome the well focused nature of my noble friend's announcement. I suggest that the key to growth in the long run is surely increased productivity, as the example that he gave of Germany indicates, though rather to the detriment of Germany's unfortunate partners within the eurozone. Against the background of the sad decline in productivity growth during the period of the previous Government, will he indicate the extent to which he believes the announcements that he has made this evening will stimulate further productivity growth and thus lead to the creation of more jobs and prosperity?

Lord Green of Hurstpierpoint: I thank my noble friend Lord Lang for that question because it is an important one. Productivity is indeed something of an Achilles' heel, at least in parts of the British economy, and we need to work at that. It is a complex matter that involves the whole question of the skills base. There is one very interesting fact about exports that is extremely important to this question. Research shows that as small companies get engaged in the international markets, they not only tend to be the more efficient ones, they tend to get more efficient as they do so. In other words, an enhanced trade performance engaging more SMEs in the international markets has the effect of strengthening the backbone of the whole economy. That is an extremely important consideration that leads me to underscore again the very centrality of this trade agenda to the growth strategy for this economy for the next few years.

Lord Hunt of Kings Heath: My Lords, perhaps I may follow up the question raised by my noble friend about the pharmaceutical industry, particularly the decision of Pfizer. Is the Minister aware of a Department of Health consultation on value-based pricing, which essentially changes the way in which the health service will compensate the pharmaceutical industry for the cost of drugs?

Under the current system, the PPRS, companies have great flexibility in setting a price within an overall profits cap. The advantage of that is that price sets a benchmark for at least 25 other countries and probably many more than that. That is one of the attractions for the industry of investing in the UK. When I was responsible for the pharmaceutical industry at the Department of Health, the UK had 4 per cent of global turnover in pharmaceuticals and 10 per cent of global R&D investment.

The Department of Health's concern is to control the cost of pharmaceuticals to the NHS but, frankly, there is a much greater issue: the strength of our pharmaceutical R&D investment. I therefore urge the

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Minister to make sure that we are looking at pharmaceutical prices from the point of view of UK plc. I should say to the House that I have a number of health interests which are declared in the register.

Lord Green of Hurstpierpoint: I thank the noble Lord, Lord Hunt of Kings Heath, for that suggestion. I have to say that, as somebody relatively new to my role, this is not an area with which I am very familiar. However, his idea is very interesting and I am happy to undertake at least to inform myself more about the issues.

I am aware that Britain has been a very attractive site for R&D in the pharmaceutical industry. I think that we are all aware of the way in which the pharmaceutical industry is changing, with an increased tendency for the major companies to look at whether primary R&D is better contracted out to smaller operations. There is a need to think through the implications of that for the strategy of attracting and retaining inward investment in that sector.

Lord Burnett: I welcome the Statement and my noble friend's appointment. Some of our major banks execute transfers of money rather more swiftly than others. It would be of great help to small and medium-sized businesses if money transfers took at the most, let us say, 24 hours rather than three or perhaps even more days. Will my noble friend encourage dilatory banks to speed up the system? Will he also take steps to encourage large companies to pay their suppliers without delay?

Lord Green of Hurstpierpoint: I thank my noble friend Lord Burnett for those suggestions, which are both important. I am happy to undertake that the Government will ensure in their dialogue with the banks that money transfers, particularly for small businesses-but, frankly, for anybody-are done as rapidly as is reasonable. I also agree that we should encourage large companies to ensure that they settle bills with their smaller suppliers as promptly as possible.

Lord Northbrook: My Lords, I congratulate the Minister on the White Paper. I applaud the strengthening of the ECGD scheme and the focus on improving important emerging markets such as India, China and Latin America as well as on existing trading partners. I also agree with him on the importance of the Doha round. However, I have a problem with the coalition's measures for restricting capital allowances for manufacturing companies. If we are to try to refocus the UK economy on manufacturing, surely we need to encourage our manufacturing companies to reinvest and thus not restrict these capital allowances.

Lord Green of Hurstpierpoint: I welcome my noble friend Lord Northbrook's support for what is proposed in respect of the ECGD and the commitment that the Government have given on Doha. The Government are clear that they want the most competitive corporate tax environment of any of our major competitor countries. As the noble Lord is aware, the headline rate of corporation tax is coming down by one percentage point between now and 2014. When it reaches its final level in 2014, it will be the most competitive rate

9 Feb 2011 : Column 330

among the G7 economies. From the many comments received from many companies, we have also recently announced the introduction of what I know is important to them; namely, a patent box to enable them to benefit from the fruits of research and intellectual property.

Overall, the sense is that we have got the balance about right. In recent weeks, as I have visited small and larger companies in the regions of this country, I have found that tax does not register as one of the regular issues where they are looking for enhanced government support. I think that they recognise the intent and the substance of what policies have already been announced.

Baroness Hooper: I also welcome the Statement and the White Paper. Because of my interest in Latin America, I note in particular and with pleasure the references to promoting trade and investment with that continent-in particular, Brazil and Mexico with their large and vibrant economies. I note also that the White Paper states:

"Our Embassies and High Commissions overseas are uniquely placed to advise on the complex political, economic and cultural factors that affect trade and investment opportunities in other countries. They can help facilitate access for UK business, help overcome barriers to market entry, secure a better in-country operating environment".

Will my noble friend therefore assure us that the previous policy of closing, down-sizing and placing severe budgetary constraints on our embassies and overseas missions will be reversed?

Lord Green of Hurstpierpoint: I thank my noble friend Lady Hooper for drawing attention to a very important region, Latin America. Brazil is one of the most exciting countries in the world and I think that we all recognise that British business has not paid that part of the world as much attention as we probably should have in recent years and decades. That is now beginning to change. The Deputy Prime Minister is visiting Latin America next week, which follows a visit by the Secretary of State for Business, and I will be going later in the year. We are paying Latin America a great deal more attention.

With regard to embassies, I make two points. Embassies play a crucial role in this trade and investment strategy. The Government have defined the key priorities of the Foreign Office as being, first, commercial diplomacy and the prosperity agenda; secondly, security; and, thirdly, the consular function. The priority attached to commercial diplomacy is extremely important.

In terms of the deployment of resources, there is an intention to gradually shift resources in diplomatic terms to the faster growing countries, the emerging markets. Without being precise about the plans at this stage, I think that noble Lords can expect to see the sorts of countries that are of concern to them being beneficiaries of this process.

Lord Risby: I warmly congratulate my noble friend on his White Paper. Does he agree that the desire to learn English and to be educated in the English language produces a huge and lucrative opportunity for us, and that the work of the British Council and the arms of our universities abroad can play a critical role in trade development policy?

9 Feb 2011 : Column 331

Lord Green of Hurstpierpoint: I thank my noble friend Lord Risby for that intervention, because I agree completely. The role of British educational institutions as export earners in their own right and, importantly, as in some sense ambassadors for what Britain is around the world cannot be prized highly enough. All indications are that those who come into contact with the British educational experience end up taking with them a warm experience of Britain for the rest of their working lives. They are all the more keen therefore to engage with us, whether as investors or as traders later in life. I think that this is extremely important.

The Archbishop of York: My Lords, I too am very thankful for the White Paper. I am particularly grateful at how this Government are committed to assisting poor countries to take advantage of the opportunities presented by an open global trading system. I am also grateful that when the Secretary of State for International Development addressed the General Synod of the Church of England he reaffirmed what the Prime Minister has said; namely, that deficit reduction will not be achieved on the backs of the poor and that the 0.7 per cent will be retained to be given to those poor countries.

To have more joined-up thinking between that department and the Minister's department, will the Minister ensure that they do not simply support poorer countries? As some people have said, it is one thing to give a poor man a fish, but it would be better to teach the poor man how to fish.

Lord Green of Hurstpierpoint: Trade is at the heart of what it takes to achieve successful economic and social development. Yes, the Government are committed to their plans to move towards the 0.7 per cent target for official development assistance. As my right honourable friend the Secretary of State said in the other place earlier today, we will commit to ensuring that our support for trade facilitation as part of our official development programmes remains at least at the current level. There is ample evidence that helping countries to improve border controls, regulatory environments and communications of all kinds has an enormous effect on trade, which in turn has an effect on people's ability to earn their own livelihoods and find their way into the economic and social mainstream. So we are completely in agreement with the instinct that the most reverend Primate calls for.

Parliamentary Voting System and Constituencies Bill

Report (3rd Day) (Continued)

10.26 pm

Schedule 1: Further provisions about the referendum

Amendment 31 not moved.

Amendment 31ZA

Moved by Lord Low of Dalston

31ZA: Schedule 1, page 19, line 26, at end insert-

"( ) directions about the discharge of their functions in relation to voters with disabilities"

9 Feb 2011 : Column 332

Lord Low of Dalston: My Lords, I rise to move Amendment 31ZA and shall speak briefly to Amendment 31ZB, which is also in this group.

Amendment 31ZA adds to the matters on which the chief counting officer may give directions to regional counting officers or counting officers, direction about the discharge of their functions in relation to voters with disabilities. In Committee, the noble Lord, Lord Strathclyde, gave very welcome reassurances, setting out the Government's clear expectations around the accessibility of the referendum for disabled people. It was most welcome that the noble Lord stated on 31 January:

"The chief counting officer will issue guidance and directions to RCOs and COs that will cover their duties in relation to accessibility and disabled voters under relevant equality and electoral legislation. These include: ensuring that polling stations meet the accessibility requirements of the DDA; ensuring that information, forms and notices relating to the voting process are available in alternative, accessible formats; making available enlarged sample versions of the ballot paper in polling stations; and providing a tactile voting device in each polling station to enable voters with visual impairments to vote".-[Official Report, 31/1/11; col. 1292.]

I know that disabled people's organisations outside this House have very much welcomed those reassurances, but it would help to underline the priority that should be given to meeting the needs of disabled voters to have the power to give directions on these matters on the face of the Bill.

Amendment 31ZB gives the chief counting officer power to give directions regarding the handling of complaints from persons dissatisfied with the way in which regional counting officers and counting officers have discharged their functions. This would apply not only to disabled voters but to voters generally and would in effect establish a complaints procedure that could be used by voters dissatisfied with the conduct of any aspect of the referendum. I raise this matter because it is surely right that there should be an avenue other than the costly and legalistic process of judicial review for members of the public to register complaints about the conduct of the referendum-whether that be over a failure to make reasonable adjustments to inaccessible polling stations or to provide the tactile voting template to a sight-impaired person, or because they feel that the arrangements for access made by regional counting officers and counting officers have fallen short of the standards that the noble Lord, Lord Strathclyde, set out in Committee.

The nature of the complaints procedure would be up to the chief counting officer to decide, no doubt in consultation with local authorities and other stakeholders. Following the serious access problems experienced at the last election, it is essential that we provide a lighter-touch, non-legalistic way of addressing complaints which enables the chief counting officer to investigate and leads to the complainant receiving a report of his findings, perhaps an apology, and a statement about the steps which will be taken to ensure that the problems do not recur. None of this is a million miles away from the powers given to the Electoral Commission by Section 67 of the Electoral Administration Act 2006 to determine and publish performance standards for electoral officers, to direct them to provide the commission with reports on their

9 Feb 2011 : Column 333

performance against those standards and to publish an assessment of that level of performance.

Noble Lords may say that my amendment will have no impact on future elections. I accept that. This amendment is designed purely to ensure that we can deal with complaints that arise during the referendum. That is all we can do in this Bill. However, if the Government could see their way to accepting the amendment, I think it would provide a good platform on which to build for the future. I hope very much that we might see provisions along the lines I am seeking by having this amendment enshrined in future electoral legislation as soon as there is a legislative opportunity. I beg to move.

Lord Bach: We on this side support very much the amendments of the noble Lord, Lord Low. We hope that the Government will react favourably to them; he is quite right to say that the noble Lord the Leader of the House reacted sympathetically in Committee to the debate that the noble Lord introduced. We hope that the Government might be able to go a little further this evening and agree with the amendments as far as they are able to do so. We look forward to what the Minister has to say.

The Archbishop of York: I, too, support the amendment of the noble Lord, Lord Low. I hope that when we talk about functions in relation to voters' disabilities, we do not forget one particular category of people-that is, deaf people. It is no good getting people in if there is no British Sign Language available. I hope that that will be taken into account as well.

Lord Howarth of Newport: My Lords, I, too, support the amendment in the name of the noble Lord, Lord Low of Dalston. It is the mark of a civilised society that disabled people are able to participate in all its activities. It is certainly the mark of a mature and properly functioning democracy that disabled people are in no way obstructed from participating in elections.

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): I thank the noble Lord, Lord Low, for the way in which he introduced his amendment and referred to the discussions we had in Committee. Like him, I thought that they were constructive and useful. I also appreciate the words of the most reverend Primate the Archbishop of York.

The Government very much understand the concerns raised by the noble Lord, Lord Low. Naturally, this debate has thrown up interesting suggestions which the Government think merit further consideration. Although the amendments tabled by the noble Lord raise some valid and useful points about which we have thought very carefully, the Government resist these commendable amendments.

First and foremost, we remain unconvinced that the amendments in their current form will make any difference to the provisions already in the Bill or, indeed, to voters at the poll. The provisions already enable the chief counting officer to issue directions or guidance in relation to voters with disabilities or in relation to the policies and procedures for the handling of complaints. Therefore, these amendments add very little in terms of substance.

9 Feb 2011 : Column 334

I know that the commission treats disability issues very seriously and is mindful of the importance of ensuring that counting officers are aware of the needs of voters with disabilities. Noble Lords will also be aware of the legal obligations that public bodies are already under to meet the needs of people with disabilities.

However, although the Government resist these amendments, we are entirely conscious that these are important issues, which may well warrant, after proper consideration and consultation, some application-in perhaps a modified form-and for that to be brought to bear on future polls. I know that the noble Lord will regret what I have to say but this is neither the appropriate time nor vehicle for these amendments. To consider carefully and consult on the implications of the kind of changes envisaged by these amendments will require more time than we have at present. However, they are a useful pointer to the issues that need to be addressed.

On that basis, I hope the noble Lord will understand and assist the Government by continuing the dialogue he has already had and withdrawing his amendment.

Lord Low of Dalston: I thank the noble Lord for his response and all other noble Lords who spoke so warmly in support of the amendments. At this late stage of the proceedings it would be appropriate to withdraw the amendment. The noble Lord the Leader of the House certainly encouraged continuation of the dialogue and spoke positively about aspects of the amendments. He said that there were things there that merited further consideration. I can take just enough away from those words to give me some confidence that the Government will wish to return to this in the context of future electoral legislation. The noble Lord can be assured that we will certainly work strenuously with the Government to ensure that that does indeed happen. On that basis, I beg leave to withdraw the amendment.

Amendment 31ZA withdrawn.

Amendment 31ZB not moved.

Amendments 31A to 32A not moved.

Amendment 33

Moved by Lord Lipsey

33: Schedule 1, page 21, line 9, at end insert-

"( ) These steps shall include measures to ensure that all those wishing to vote and arriving at the polling station within the appointed hours are able to do so."

Lord Lipsey: My Lords, this follows an amendment that I moved in Committee, which included the general duty on the Electoral Commission, as included in this amendment. It was pointed out that in doing that I had not tackled one of the main problems that beset this area, namely that the legislation seems not to allow people who arrive at a polling station on time but have not cast their vote by 10 pm to cast their vote by the expiry of those hours prescribed by the legislation. Therefore, I drafted this amendment so that they should be permitted to vote. To remind the House; in

9 Feb 2011 : Column 335

Committee there was general agreement that the chaos of May 2010, when 1,200 eager citizens were denied the right to vote-in one of the most advanced democracies in the world-must never happen again. Many moving words were spoken about that.

The Electoral Commission also inquired into that, as you would expect. In its initial report it asked for legislation. It has produced a briefing document that summarises the position in the report, saying that,

If I could pick one phrase out of that, it would be "urgently change the law". When I picked up the Electoral Commission's briefing for these debates, I expected that at least it would offer me some support in trying to do that. That was perhaps naive, because in between its initial report and now, the Deputy Prime Minister has made it clear that he is not in favour of legislation on this subject. I do not like to ascribe motives or to deduce cause and effect, but in the briefing the Electoral Commission went rapidly from calling for an urgent change to saying that the change proposed in my amendment would be significant, that it could be open to different interpretations, that there was insufficient time to consider its full implications, and that the Electoral Commission was unable to support it.

If the Electoral Commission did not like my amendment, given that it wanted urgent legislation it would have been perfectly sensible for it to have proposed a substitute. There is Third Reading to come, and if the matter remained not cleared up we could have debated it then. However, the Electoral Commission has not proposed a substitute. Here we have a situation, only the facts of which I describe, of a body urgently seeking a legislative amendment, an indication in the press that the DPM is against it, and a legislative vehicle to deal with the situation, and what is commission's reaction? It shows all the urgency of a tortoise on valium.

You cannot spend long in either House without discovering that the Electoral Commission does not always command the total confidence in its activities which Members of both Houses would hope for. To some extent that is right, because the commission must not be a puppet of Members in either place. However, I detect an underlying lack of confidence that this is truly an efficient and fit-for-purpose body. The commission's reaction in this case seems somewhat to underline that charge and suggests that it has validity.

I say nothing more than that the time has come for the Electoral Commission to up its game. I am sure that tonight Ministers will be absolutely delighted to hide behind the commission's coat tails and will therefore not embrace the amendment or put forward a preferred amendment of their own. I should be highly delighted to be surprised. I beg to move.

The Archbishop of York: My Lords, the incident referred to by the noble Lord happened in my province, Sheffield. Had that happened in Africa or India, we would have said it was scandalous that people had been in the queue for three hours but, because the

9 Feb 2011 : Column 336

voting had to stop at 10 o'clock, were told to go away. There would have been an outcry that people had been queuing for hours and were denied a vote. For me, the purpose of the law is to state public policy. This amendment is a statement that such an occurrence must not be allowed to happen again, and the regulations should make that clear. If you do not prescribe it now, the same will happen somewhere else. The African saying, "People in Britain have watches, while in Africa we have time", might come true in the end.

Lord Bach: My Lords, my noble friend Lord Lipsey raises an interesting couple of points in the amendments. They seem to us on the Front Bench to be absolutely unarguable. They are sensible and deal with the situation very well indeed. My noble friend's points about the Electoral Commission were interesting. I should make a revelation; I found the Electoral Commission much more impressive when I was in government than I do now, sitting on the other side of the Chamber. That may reflect on me, but it also reflects to some extent on the Electoral Commission. I know that the noble and learned Lord who will respond will deny that it is anything other than pure coincidence that the Electoral Commission should change its mind so quickly on this issue and shut off any chance of my noble friend's amendments being accepted.

10.45 pm

Lord Tyler: Perhaps the noble Lord also saw that the Electoral Commission, in its advice to your Lordships' House, also said something that the noble Lord, Lord Lipsey, did not mention: namely, that while it supported the principle of the amendment, it did not feel that it was necessary as its intended outcome could be achieved through the chief counting officer's power of direction for the referendum, as provided for in the Bill. Therefore it is not entirely fair to say that the situation has changed in the way that the noble Lord, Lord Lipsey, and the noble Lord, Lord Bach, said.

As someone who has in the past given informal advice to the Electoral Commission, I agree that it is not beyond criticism. I am sure that some criticism of it is entirely proper, but it would be unfair to suggest that it has changed its mind in the way that was mentioned.

Lord Bach: I am very grateful to the noble Lord, as always-and the Electoral Commission must be even more grateful than I. These are sensible amendments that one would have thought the commission would have supported, given all that it said about the scandalous issues that arose in Sheffield and a few other places during the last election. It is remarkable that it seems to have changed its mind.

I will put that to one side. The Government will make up their mind about whether to do something about the scandal in May last year. My question to the noble and learned Lord is: what do the Government intend to do to make sure that this does not happen again in May this year?

The Advocate-General for Scotland (Lord Wallace of Tankerness): I thank the noble Lord, Lord Lipsey, for returning to this important issue in his amendment. Many of us who watched the election night coverage

9 Feb 2011 : Column 337

of the scenes at certain polling stations where people who had been queuing were not given the opportunity to vote found that it offended our sense of justice as democrats. The Government certainly take it seriously. The Electoral Commission's report found that queues built up at a number of polling stations on 6 May for various reasons. It identified 27 polling stations across the country. In most cases, it found that the common factor was inadequate planning processes and contingency arrangements that were not in place.

I assure the House that the Government are considering the Electoral Commission's report. We will consider what steps are necessary to prevent a repeat of the problems. It is important that we make sure that any changes to the rules are workable and will benefit the public. The noble Lord, Lord Lipsey, referred to the briefing from the commission to Members of your Lordships' House in which it indicates that a change to the rules on the close of polls would be significant; that details of any changes would need careful consideration to ensure that they could be consistently applied and would not have any unintended consequences; that the amendment could lead to inconsistent practice; and that there has not been sufficient time to consider the implications of how the provisions of amendment might work in practice.

We previously assured the House, in a reasonably long debate on this issue in Committee, that the Bill already gives the chief counting officer the necessary powers and discretion to ensure that the referendum runs smoothly. She will have sufficient flexibility to decide what is right in particular circumstances, including the steps that have already been taken by the Electoral Commission to ensure that some of the problems that occurred on 6 May are not repeated. This will include all counting officers having effective planning processes and contingency plans. We advised the Committee that the Electoral Commission had indicated that the chief counting officer intends to issue directions to counting officers on the maximum number of electors who will be allocated to any polling station, and the associated minimum number of staff who must be present at each polling station to ensure that polling runs smoothly and that all electors who wish to vote are able to. The Government take this seriously and are considering the Electoral Commission's report.

The Archbishop of York: The amendment simply refers to taking measures to ensure that all those wishing to vote and arriving at a polling station within the appointed hours are able to do so. What could be the unintended consequences of that?

Lord Wallace of Tankerness: The Electoral Commission and the chief counting officer ultimately have responsibility for the smooth running of the election. Certainly-this may well be because we are running relatively close to polling day-they have taken the view that making such a significant change could have unintended consequences. In their judgment, it could lead to some inconsistencies in different parts of the country, and it would be regrettable if, in trying to address one very serious problem, we opened up some other unintended and unforeseen problems. I do not think we would be thanked for that, and therefore I urge the noble Lord to withdraw his amendment.

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Lord Lipsey: I have enjoyed the contribution of the noble and learned Lord, Lord Wallace, to our proceedings and notice that tonight he has transformed himself into Sir Humphrey. That could come straight out of "Yes Minister" and we would have them rolling in the aisles.

The Electoral Commission rushed out a report within two weeks of this scandal because people were outraged. We are now nine months on from the incident and we are told that I am rushing by putting forward an amendment tonight when no alternative proposal has been put forward. It is another three months until the referendum. The Electoral Commission has plenty of time to put these things right and the Government have plenty of time to put the legislation right, which they could have started doing tonight. Therefore, I feel a sense of deep unease and disappointment. In the Government's response I see none of the urgency that the Electoral Commission pressed for last May.

I wholly agree with, and am delighted with the contribution from, the most reverend Primate, who spoke from the experience of knowing just how bad it was for the people who were not able to vote. I cannot do anything further about it myself but I urge Ministers to push this to a resolution of some kind so that we can go out into the world in the future with a sense of pride that, when something goes wrong in our democracy, we put it right and do not let it linger, stinking, over our system. I beg leave to withdraw the amendment.

Amendment 33 withdrawn.

Amendment 34 not moved.

Amendment 34ZA

Moved by Lord Phillips of Sudbury

34ZA: Schedule 1, page 21, line 13, at end insert-

"( ) The Chief Counting Officer must take whatever steps the officer thinks appropriate to facilitate co-operation between that officer and the officers to whom sub-paragraph (3) applies in taking any steps under sub-paragraph (1) or (2)."

Lord Phillips of Sudbury: My Lords, I hope to deal with this amendment quickly. It is a modest and practical amendment, and it is similar in effect to the amendment moved in Committee. I see that a number of Members of the House do not have a copy of this manuscript amendment and I hope that it will be in order for me to read it out:

"The Chief Counting Officer must take whatever steps the officer thinks appropriate to facilitate co-operation between that officer and the officers to whom sub-paragraph (3) applies in taking any steps under sub-paragraph (1) or (2)".

The nub of the amendment is a desire to ensure that there is co-operation between all those who under paragraph 10 of the schedule have a duty to "encourage participation". The regional counting officer is given that duty under paragraph 10; so, too, is every regional counting officer, every counting officer and every registration officer. Your Lordships may remember that, when I moved a similar amendment in Committee, there was support for it all around the Chamber, and the noble Lord, Lord Bach, was very generous in strongly supporting it. This amendment brings back

9 Feb 2011 : Column 339

that principle, and I have tabled it following very helpful discussions with the Minister and the Bill team.

I think that I need say little more. The point is that, under the Bill as it stands, no one is given the task of co-ordinating what could be extremely dislocated efforts to encourage participation. This amendment, as I said, simply states that, among the four groups of officials involved, the chief counting officer has the role of ringmaster in trying to maximise the encouragement of participation, because everyone in this House wants this referendum to engage as many members of the public as possible. That is the size of it. I beg to move.

Lord Falconer of Thoroton: My Lords, the manuscript amendment moved by the noble Lord, Lord Phillips of Sudbury, comes under the part of the schedule headed "Encouraging participation". As I understand it, he wishes to place on the chief counting officer responsibility for co-ordinating the activities of a regional counting officer, a counting officer and a registration officer in performing their duties under paragraph 10 to encourage participation. It is very hard to see how anyone could object to that. I do not know whether there are any technical objections to the terms of the noble Lord's manuscript amendment, but it seems a sensible measure, because there is no one in the House who does not want to encourage participation.

If there are technical problems with the manuscript amendment, I imagine that they could be tidied up at Third Reading on Monday. On the basis on which it has been advanced by the noble Lord, Lord Phillips of Sudbury, we support the principle of the amendment, subject to any difficulties that we have not foreseen to which the Minister may draw our attention.

Lord Wallace of Tankerness: My Lords, I thank my noble friend Lord Phillips of Sudbury for tabling the amendment. He gave a history of the debate in Committee. We agreed when he withdrew his amendment in Committee that we would have further discussions. I am pleased that we have been able to have those discussions. In Committee, the Government indicated that we were not persuaded that such an amendment was necessary. My noble friend and I have agreed that there was merit on both sides. Our meeting has added clarity. It has put the issue of co-operation right up front. The noble and learned Lord, Lord Falconer of Thoroton, has emphasised the importance of co-operation, with which we all agree, in trying to ensure encouragement of participation in the referendum, usbregardless of which side of the campaign one might be on.

It is a manuscript amendment. If my noble friend is willing to give us the opportunity to reflect on its wording, I very much hope to be able to come back to him with a definitive response during Third Reading. Perhaps he would be prepared to withdraw his amendment at this stage on that basis.

Lord Phillips of Sudbury: I am grateful to my noble and learned friend. I assume that there was a clear implication in that-

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Noble Lords: No.

Lord Phillips of Sudbury: Am I speaking out of turn?

Noble Lords: No.

Lord Phillips of Sudbury: I hope that there was a clear implication that my noble and learned friend accepts the nub of the amendment and that it is just a question of technical jiggery-pokery.

Lord Falconer of Thoroton: I apologise to the noble Lord, Lord Phillips, for making two loud noises from a sedentary position, but his point was precisely that which was going through my mind about the noble and learned Lord's response. It was not clear from what he said whether he would come back with something or whether he was just considering something. The response of the noble Lord, Lord Phillips, is exactly the response that I would have given.

Lord Wallace of Tankerness: If it helps, I very much hope to be able to come back with a very positive response to my noble friend. I just wanted to check.

Amendment 34ZA withdrawn.

Schedule 2 : Rules for conduct of the referendum

Amendment 34A

Moved by Lord Strathclyde

34A: Schedule 2, page 35, line 27, after "entry" insert "1A,"

Lord Strathclyde: My Lords, this is a series of government amendments to deal with the issue of postal and proxy voting. They provide that anyone who registers or is already registered to vote by post, or has a proxy vote in a combined poll, will receive a postal vote for the referendum. They include, I fear, a long string of consequential amendments. Therefore, I beg to move Amendment 34A and will then move en bloc Amendments 34B to 34AS, with the leave of the House.

Lord Falconer of Thoroton: I am slightly at a loss. Roughly, in a sentence or two, what are they doing and why are they being done at Report?

Lord Strathclyde: I spoke in one sentence, and I thought that I was the object of clarity. Why are we doing it at Report? Because we did not spot it before. No doubt in those long days in Committee the officials were busily looking at these issues again and came to the conclusion that there needed to be some clarification.

The point is that an elector who is already registered for a postal vote for one of the polls combined with the referendum, and who is therefore entitled to vote in the referendum, is now as a result of these amendments, which I hope will be agreed, also automatically registered for a postal vote for the referendum. It is about dealing with the issue of the combination of the polls at the same time. It is designed to make life easier, and I am sure that the noble and learned Lord will agree it.

Amendment 34A agreed.

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Amendments 34B and 34C

Moved by Lord Strathclyde

34B: Schedule 2, page 35, line 30, after "entry" insert "1A,"

34C: Schedule 2, page 35, line 33, at end insert-

"( ) in the case of a peer within entry 1A of the table, state that the peer's entitlement to vote by proxy in the referendum arises by virtue of the peer's inclusion in the list of proxies for a specified poll mentioned in that entry;"

Amendments 34B and 34C agreed.

11 pm

Schedule 3 : Absent voting in the referendum

Amendments 34D to 34AS

Moved by Lord Strathclyde

34D: Schedule 3, page 80, line 17, at end insert-


A person who- (a) is entitled to vote in the referendum and in a poll that is taken together with the referendum, (b) is included in the postal voters list for that poll, and (c) is not within entry 1 in this table or entry 1 in the table insub-paragraph (3).

Address provided in the application that gave rise to the person being included in the postal voters list or, if the person is included in more than one, the address provided in the latest of those applications."

34E: Schedule 3, page 80, line 23, after "1" insert "or 1A"

34F: Schedule 3, page 80, line 24, after "1" insert "or 1A"

34G: Schedule 3, page 80, line 37, after "1" insert "or 1A"

34H: Schedule 3, page 80, line 38, after "1" insert "or 1A"

34J: Schedule 3, page 81, line 14, after "1" insert "or 1A"

34K: Schedule 3, page 81, line 15, after "1" insert "or 1A"

34L: Schedule 3, page 81, line 23, at end insert-


A person who-(a) is entitled to vote in the referendum and in a poll that is taken together with the referendum, (b) is included in the list of proxies for that poll, and (c) is not within entry 1 in this table or entry 1 or 1A in the table in sub-paragraph (2).

Proxy appointed for the purposes of that poll or, if there is more than one, the proxy appointed for the poll in respect of which the latest of the person's applications to vote by proxy was made."

34M: Schedule 3, page 81, line 29, after "1" insert "or 1A"

34N: Schedule 3, page 81, line 30, after "1" insert "or 1A"

34P: Schedule 3, page 81, line 43, after "1" insert "or 1A"

34Q: Schedule 3, page 81, line 44, after "1" insert ", 1A"

34R: Schedule 3, page 82, line 14, after "1" insert "or 1A"

34S: Schedule 3, page 82, line 15, after "1" insert ", 1A"

34T: Schedule 3, page 83, line 9, at end insert-

"( ) in relation to a principal who is included in the list of proxies by virtue of entry 1A in that table, the appointment of the person mentioned in column 3 of that entry;"

34U: Schedule 3, page 84, line 2, leave out from "paragraph" to ", and" in line 3 and insert "7(2)(a)"

34V: Schedule 3, page 84, line 7, after "7(2)" insert "(b), (c) or (d)"

9 Feb 2011 : Column 342

34W: Schedule 3, page 84, line 28, at end insert-


A proxy who-(a) was appointed as mentioned in column 3 of entry 1A in the table in paragraph 5(3) for a person mentioned in column 2 of that entry, and (b) is included in the proxy postal voters list for the poll in respect of which that appointment was made.

Address provided in the proxy's application to vote by post as proxy in that poll."

34X: Schedule 3, page 85, line 41, after "3(9)" insert ", 4(6)"

34Y: Schedule 3, page 85, line 43, at end insert-

"( ) articles 8(9), 9(6) and 12(13) of the National Assembly for Wales (Representation of the People) Order 2007 (S.I. 2007/236) (dates of birth and signatures of certain electors and proxies) in relation to persons entitled to vote in the referendum,

( ) articles 8(9), 9(8) and 11(12) of the Scottish Parliament (Elections etc.) Order 2010 (dates of birth and signatures of certain electors and proxies) in relation to persons entitled to vote in the referendum,"

34Z: Schedule 3, page 89, line 27, at end insert-


A person who- (a) is entitled to vote in the referendum and in a poll that is taken together with the referendum,(b) is shown in the absent voters list for that poll as voting by post, and(c) is not within entry 1 in this table or entry 1 in the table in sub-paragraph (3).

Address provided in the application that gave rise to the person being included in the absent voters list or, if the person is included in more than one, the address provided in the latest of those applications."

34AA: Schedule 3, page 89, line 33, after "1" insert "or 1A"

34AB: Schedule 3, page 89, line 34, after "1" insert "or 1A"

34AC: Schedule 3, page 90, line 14, after "1" insert "or 1A"

34AD: Schedule 3, page 90, line 15, after "1" insert "or 1A"

34AE: Schedule 3, page 90, line 29, after "1" insert "or 1A"

34AF: Schedule 3, page 90, line 30, after "1" insert "or 1A"

34AG: Schedule 3, page 90, line 38, at end insert-


A person who- (a) is entitled to vote in the referendum and in a poll that is taken together with the referendum, (b) is shown in the absent voters list for that poll as voting by proxy, and(c) is not within entry 1 in this table or entry 1 or 1A in the table in sub-paragraph (2).

Proxy appointed for the purposes of that poll or, if there is more than one, the proxy appointed for the poll in respect of which the latest of the person's applications to vote by proxy was made."

34AH: Schedule 3, page 90, line 44, after "1" insert "or 1A"

34AJ: Schedule 3, page 90, line 45, after "1" insert "or 1A"

34AK: Schedule 3, page 91, line 14, after "1" insert "or 1A"

34AL: Schedule 3, page 91, line 15, after "1" insert ", 1A"

34AM: Schedule 3, page 91, line 29, after "1" insert "or 1A"

34AN: Schedule 3, page 91, line 30, after "1" insert ", 1A"

34AP: Schedule 3, page 92, line 15, at end insert-

"( ) in relation to a principal who is included in the list of proxies by virtue of entry 1A in that table, the appointment of the person mentioned in column 3 of that entry;"

34AQ: Schedule 3, page 93, line 9, leave out from "paragraph" to the end of line 10 and insert "18(2)(a),"

34AR: Schedule 3, page 93, line 24, after "18(2)" insert "(b), (c) or (d)"

9 Feb 2011 : Column 343

34AS: Schedule 3, page 93, line 45, at end insert-


A person who- (a) was appointed as mentioned in column 3 of entry 1A in the table in paragraph 16(3) for a person mentioned in column 2 of that entry, and (b) is included in the proxy postal voters list for the poll in respect of which that appointment was made.

Address provided in the proxy's application to vote by post as proxy in that poll."

Amendments 34D to 34AS agreed.

Schedule 4 : Application to the referendum of existing provisions

Amendment 34T

Moved by Lord Strathclyde

34T: Schedule 3, page 83, line 9, at end insert-

"( ) in relation to a principal who is included in the list of proxies by virtue of entry 1A in that table, the appointment of the person mentioned in column 3 of that entry;"

Amendment 34T agreed.

Schedule 5 : Combination of polls: England

Amendments 34AU and 34AV

Moved by Lord Strathclyde

34AU: Schedule 5, page 159, line 6, after "entry" insert "1A,"

34AV: Schedule 5, page 159, line 10, after "entry" insert "1A,"

Amendments 34AU and 34AV agreed.

Schedule 6 : Combination of polls: Wales

Amendments 34AW and 34AX

Moved by Lord Strathclyde

34AW: Schedule 6, page 194, line 26, after "entry" insert "1A,"

34AX: Schedule 6, page 194, line 30, after "entry" insert "1A,"

Amendments 34AW and 34AX agreed.

Schedule 7 : Combination of Polls: Scotland

Amendment 35 not moved.

Amendments 36 and 37

Moved by Lord Strathclyde

36: Schedule 7, page 235, line 26, after "entry" insert "1A,"

37: Schedule 7, page 235, line 30, after "entry" insert "1A,"

Amendments 36 and 37 agreed.

9 Feb 2011 : Column 344

Schedule 10 : The alternative vote system: further amendments

Amendment 38

Moved by Lord Strathclyde

38: Schedule 10, page 304, line 24, at end insert-

"Parliamentary Constituencies Act 1986

In Schedule 2A to the Parliamentary Constituencies Act 1986 (public hearings about Boundary Commission proposals), in the definition of "qualifying party" in paragraph 9, for "votes" there is substituted "first-preference votes"."

Lord Strathclyde: My Lords, this is a small and technical amendment dealing with the definition of a qualifying party. I beg to move.

Lord Falconer of Thoroton: The obvious question is, "What are these for?", but it is just too late at night to ask that-so don't even get up to respond.

Lord Strathclyde: I cannot resist, because I know that it would be helpful to the noble and learned Lord if I tell him that this amendment is relevant only to Northern Ireland.

Amendment 38 agreed.

Amendment 39

Moved by Lord Strathclyde

39: After Schedule 10, insert the following new Schedule-

    Section 12
    Public hearings about Boundary Commission proposals

The Schedule referred to in section 12(1A) is as follows-

    "Schedule 2A
    Section 5
    Public hearings about Boundary Commission proposals
    Purpose of hearings

The purpose of a public hearing is to enable representations to be made about any of the proposals with which the hearing is concerned.

    Number of hearings

(1) In relation to any particular report under section 3(1)(a) of this Act-

(a) the Boundary Commission for England shall cause at least two and no more than five public hearings to be held in each English region;

(b) the Boundary Commission for Scotland shall cause at least two and no more than five public hearings to be held in Scotland;

(c) the Boundary Commission for Wales shall cause at least two and no more than five public hearings to be held in Wales;

(d) the Boundary Commission for Northern Ireland shall cause at least two and no more than five public hearings to be held in Northern Ireland.

(2) The public hearings in an English region shall be concerned with proposals for that region, and shall between them cover the whole region.

(3) The public hearings in Scotland shall be concerned with proposals for Scotland, and shall between them cover the whole of Scotland.

9 Feb 2011 : Column 345

(4) The public hearings in Wales shall be concerned with proposals for Wales, and shall between them cover the whole of Wales.

(5) The public hearings in Northern Ireland shall be concerned with proposals for Northern Ireland, and shall between them cover the whole of Northern Ireland.

    Chair of hearings

For each public hearing the Boundary Commission concerned shall appoint a person to chair the hearing.

    Length of hearings

A public hearing shall be completed within two days.

    Procedure at hearings

It is for the chair of each public hearing to determine the procedure that is to govern that hearing.

The chair shall make arrangements for a public hearing to begin with an explanation of-

(a) the proposals with which the hearing is concerned;

(b) how written representations about the proposals may be made (as mentioned in section 5(1)(a), (4)(b) or (5)(c) of this Act).

The chair of a public hearing must allow representations to be made-

(a) by each qualifying party;

(b) by any other persons (whether individuals or organisations) considered by the chair to have an interest in any of the proposals with which the hearing is concerned.

Paragraph (b) above has effect subject to sub-paragraph (3)(b) below.

(2) The chair may restrict the amount of time allowed for representations-

(a) by qualifying parties, and

(b) by other persons,

and need not allow the same amount to each.

(3) The chair may determine-

(a) the order in which representations are made, and

9 Feb 2011 : Column 346

(b) if necessary because of shortage of time, which of those wishing to make representations are not allowed to do so,

in whatever way the chair decides.

(1) The chair may put questions, or allow questions to be put, to a person present at the hearing.

(2) If questions are allowed to be put, the chair may regulate the manner of questioning or restrict the number of questions a person may ask.


In this Schedule-

"the chair" means the person appointed under paragraph 3 above;

"English region" means an electoral region specified in Schedule 1 to the European Parliamentary Elections Act 2002 (ignoring paragraph 2(2) of that Schedule and the references to Gibraltar) as it has effect on the day referred to in rule 5(2) of Schedule 2 to this Act;

"public hearing" means a hearing under section 5(1)(b) of this Act;

"qualifying party" means a party that is registered under Part 2 of the Political Parties, Elections and Referendums Act 2000 and either-

(a) has at least one Member of the House of Commons representing a constituency in the region, or (as the case may be) the part of the United Kingdom, in which the hearing is held, or

(b) received at least 10% of the votes cast in that region or part in the most recent parliamentary general election.""

Lord Strathclyde: I beg to move.

Amendments 40 to 68 (to Amendment 39) not moved.

Amendment 39 agreed.

House adjourned at 11.03 pm.

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