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8 Mar 2011 : Column 1557

Lord Myners: The Minister started her answer by saying that as things were as they are, and there was no good reason for changing that, they should remain as they are. Surely, however, the Government are making changes, and that is the appropriate trigger for consideration of this factor. From these Benches we are urging that it is essential that the workers in this company, which has always been a very delicate organisation, who have served it loyally over many decades, are entitled to believe-almost as part of the concept of the "big society"-that the Government recognise that there is a degree of mutualisation. After all, that is why the Government are gifting shares to the workforce. So why go only halfway? Why stop at the point of gifting shares and not empower those shareholders to give voice and expression around the board table?

Baroness Wilcox: I can only repeat that, as we all know, the previous Bill failed. We hope that this Bill will succeed. We want as much flexibility as possible when it comes to selling Royal Mail. We have faith in the fact that the people who have worked for this company for so long should be offered the best possible opportunity. We are offering the biggest ever issue of shares to the employees of the company-over 10 per cent. That is a wonderful voice that they will have. No one is saying that no one will finish up on the board. We are saying that we cannot put this in legislation. We need to keep this as flexible as possible to get the best possible price and the best possible deal. The noble Lord, Lord Myners, of all people, City man that he is, knows what I am talking about. I ask that the noble Lord, Lord Young, withdraw his amendment.

Lord Young of Norwood Green: My Lords, it has been a fascinating debate; I did not expect quite as much of a debate as this. This is an important issue. I agree with my noble friend Lady Turner about the value of employee involvement. It is nice to return to agreeing with the noble Lord, Lord Cotter, in his evaluation of the importance of involving the workforce; I wholeheartedly endorse that. My noble friend Lord Brooke demonstrated the value of his experience as a partnership director in NATS.

Several times in this debate people have talked about there being only one representative. The Minister had trouble dealing with that. In fact, I remind the House that the amendment says "at least one".

My noble friend Lord Myners made a fascinating contribution. I am glad that he told me what a high-conviction portfolio was; I would have thought it was someone being detained at Her Majesty's pleasure if he had not explained that. His argument was valid when he talked about the question of risk and the way that other shareholders may be able to diversify their risk, but in many cases those employees are pledging all their working life to the company.

The noble Viscount, Lord Eccles, pointed out that there might be a flaw in the amendment, but I remind him that it says "at least one".

I must admit that I was somewhat disappointed in the Minister's response. The only argument that she could give us was the need to retain flexibility. Are we

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really saying that one employee representative-if indeed it were one-would wreck that flexibility? If that were the case, if you wanted ultimate flexibility, then why has she boasted about the 10 per cent employee shareholding? I do not believe that that was a valid argument against the very reasonable suggestion in this amendment.

Having reflected on the debate, I will withdraw the amendment at this stage. We were somewhat puzzled by the pre-emption, but as we are not going to invoke that we can have that argument outside the Chamber. We will certainly return to this subject, probably on Report. In the circumstances, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Amendment 5

Moved by Lord Young of Norwood Green

5: Clause 2, page 1, line 16, leave out from "after" to end of line 3 on page 2 and insert "identifying the preferred successful bidder, the Secretary of State must deliver an oral statement to Parliament on the matter and lay an order on the proposed disposal which will be the subject to the affirmative procedure"

Lord Young of Norwood Green: My Lords, I am sure that a number of amendments to the Bill will come from all sides of the House as we progress. I am seeking more information about the Government's plans for postal services in the UK. The purpose of the amendment would be to ensure that the Secretary of State reported back to Parliament on the disposal of Royal Mail. The Secretary of State would have to deliver an Oral Statement and lay an order subject to the affirmative procedure.

There are real concerns about what the Bill will mean for people who live in rural areas, for small businesses, for those who receive specialist services for the blind, for the taxpayer and for the employees and agents of Royal Mail and Post Office Ltd. Rarely can a government Bill have given rise to as many questions as it seeks to answer.

Noble Lords have argued eloquently that it is essential for Parliament to receive more detail about the financial value of Royal Mail, the future of universal and affordable postal services and the impact of privatisation on services in the devolved Administrations. The Government are urged to respond to these concerns with written and oral reports to the House at the time when Ministers decide to dispose of some or all of the Government's shares in Royal Mail. Only the Government appear to suggest that these concerns are not legitimate, otherwise they would happily accept these amendments and the Minister would produce the reports requested in advance of the sale.

At times the Government appear to be in an unseemly haste to complete all the stages of the Bill. The danger is that, if the Bill is not itself flawed, then there are significant gaps in it that need filling. There are simply too many questions unanswered, too many concerns about the Government's intentions and too little of substance in the way that the Government have responded to these concerns for Parliament simply to give its

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assent to this measure and then depart the field. It is the firm belief of the Opposition that the lack of a fully worked-out proposal, linked to a wait of possibly two, three or four years before a disposal takes place, necessitates Parliament being able to review this matter once again.

As the Bill stands, the Secretary of State will make a decision about a full or partial disposal of Royal Mail and then make a report to Parliament. There is no requirement even for the report to be accompanied by an Oral Statement; there is no commitment that Oral Questions should be able to be put to Ministers; and there is no commitment for Parliament to have a vote of any kind. Moreover, the report will be made after the Secretary of State has made the decision. That is, I am sure many in this House would agree, simply not adequate. As I said earlier, it is interesting how often, in dealing with other Bills when we were in government, the affirmative procedure was required and demanded.

The current Postal Services Bill has a number of similarities to the 2009 Postal Services Bill, but the fact that this Bill seeks to privatise Royal Mail in its entirety makes it distinct from the 2009 Bill. One of our difficulties is in trying to grasp the detail to discover exactly what information is in the Bill about whether there will be an initial public offering or a trade sale at auction. The Government have not set a clear timetable. They have not explained whether there will be a general sale of shares to the public, an IPO, a restricted sale to certain categories of buyer or a trade sale by auction to a single buyer, such as a private equity firm or a postal competitor, which might raise competition issues.

Nor have the Government explained any measures to ensure value for money for the taxpayer. They have not explained whether they would sell the whole company all at once-with all the risk involved of selling cheaply, as has been mentioned-or whether they would be prepared to sell in tranches. They have not been clear about how valuable public assets will be allocated among Post Office Ltd, the pension funds and Royal Mail-and thus find their way into private hands. They have not indicated how the board might be consulted. They have not ruled out dismantling the Royal Mail and cherry-picking the most profitable parts, such as Royal Mail's successful European parcels service GLS and Parcelforce. They have not indicated how they will guard against a buyer with a short-term horizon that seeks to squeeze costs and cherry-pick the assets.

Before any sale takes places, this House will want to be assured about the future of the universal service, the exact regulatory regime and the future of the post office network. What state has been reached in obtaining state aid clearance from the Commission? What is the expected timetable for that state aid clearance?

The other amendments in this group seek to require a further Bill or a super-affirmative procedure to allow Parliament properly to scrutinise and have a say about the method of sale and the sort of Royal Mail that will emerge in the private sector; our amendment provides for a less stringent parliamentary test, but I feel that it is the very minimum that is owed in the name of proper parliamentary scrutiny. Of course there is no wish to constrain the Government unreasonably in

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carrying out a sale if the Bill is passed with Clause 1 intact. The House will of course recognise the reasonable constraints of commercial confidentiality, but for such a momentous decision as this to be carried to its conclusion without further reference to Parliament, in a way that gives Parliament a proper say, would be highly regrettable.

If the Government are not willing to report back to Parliament on the specific concerns set out in other amendments, they should accept our amendment and agree to allow a general scrutiny of the disposal of Royal Mail at the point that that takes place. They should do so under the affirmative procedure, so that there is a genuine opportunity to consider and debate the sale.

There is genuine, non-partisan, cross-party concern about this measure, so it is right that Parliament is given the opportunity to debate the matter again when the Government are in a better position to answer the questions that they have so far failed to answer. I hope that the Minister will take this opportunity to improve the Bill by accepting a more accountable route for parliamentary accountability, which would involve not just an ex post facto report after the decision has been taken. I beg to move.

The Deputy Chairman of Committees: I should tell the Committee that, if Amendment 5 is agreed to, I shall not be able to call Amendments 6 or 7 by reason of pre-emption.

5.45 pm

Baroness Drake: My Lords, I wish to speak to Amendments 6 and 17 in this group, which stand in my name.

As currently drafted, Clause 2 requires the Secretary of State to make a report to Parliament only when a decision has been made to dispose of shares or share rights in Royal Mail. That report is to include both the type and the timing of any disposal. Amendment 6 seeks to ensure both that the Secretary of State is more fully accountable to Parliament for any decision that he or she may take regarding the sale of Royal Mail and that the decision is consistent with best practice and legislation governing regulatory reform.

Amendment 6 seeks to do that by means of a super-affirmative order and an explanatory document accompanying the proposed disposal order that are to be laid at the point of a decision on a sale. The amendment would not undermine the Bill's three main proposals, which are to allow the unrestricted sale of shares in Royal Mail, to introduce a new regulatory regime and to provide for the transfer of pension liabilities. Rather, because of the implications that would flow from an unrestricted sale, I believe that the super-affirmative procedure is appropriate.

Many noble Lords are concerned at the haste with which the Government have sought to complete the passage of the Bill, and one is left anxious about the scrutiny of matters that will arise from the implementation of the Bill potentially at some point significantly in the future. Amendment 6 would require the Secretary of State to return to Parliament to seek approval when a

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decision is taken on a specific disposal of Royal Mail-a decision that may not occur for, say, another three years. That is very important. The Bill is significant, given that its provisions will have a major impact on business and personal users of the service, on citizens' interests and on the employees and agents of Royal Mail and Post Office Ltd. It will also have a significant impact on the Exchequer. Such a decision deserves close scrutiny.

The super-affirmative resolution procedure would allow Parliament the right fully to consider the proposals for the sale in a way that is provided for in the Legislative and Regulatory Reform Act 2006. Under that Act, Ministers have wide-ranging powers to amend primary legislation by order and the Act makes provision for determining the parliamentary procedures for such orders. If noble Lords would indulge me-as a new Member of the House, I am all too conscious of the paucity of my knowledge of parliamentary procedures compared to the depth of knowledge held by so many noble Lords-sometimes one feels that a matter is of such significance that one must split an infinitive and be prepared to boldly go. I am advised that there is no simple definition of the super-affirmative procedure, so it is necessary to lay it out fully in the Bill; hence the tabling of Amendment 17, which seeks to do precisely that.

I shall give the briefest of summaries. Under the super-affirmative resolution procedure, during a 60-day period when the draft order is laid the Minister must have regard to any representations received, any resolution of either House and any recommendations made by a scrutiny committee of either House. At the end of the 60-day period, the Minister can decide to proceed with the draft or lay a revised draft with, in either instance, a statement about any representations made and revisions proposed. In each case, the order then proceeds as a normal affirmative order. However, if a scrutiny committee of either House recommends, after the laying of the statement or of the revised draft order and statement, that the order should not proceed, then the order may not proceed unless the House concerned rejects the recommendation.

In the circumstances of this important Bill, the merit of the super-affirmative procedure is that the process would take place over a 60-day period and it would allow the Minister to amend any draft order, if Parliament decides it appropriate, but that decision would not undermine the whole basis of the proposal. Such an approach would have three key benefits: it would allow effective scrutiny at the time that it matters-at the point of sale-which may be some few years hence; it would ensure that the impact of the terms of sale could be understood; and it would ensure democratic accountability on matters flowing from an enabling Bill. In this instance the super-affirmative procedure would be good for users and the taxpayer, who will benefit from Parliament scrutinising a Royal Mail disposal at the precise time that the Government make their decision.

I turn to the explanatory document. Parliament is being asked to consider the Bill one, two, three or maybe even four years prior to the sale of Royal Mail. By adopting the super-affirmative procedure, together with requiring an explanatory document when a disposal

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order is laid, Parliament has the opportunity to scrutinise the decision of the Secretary of State at the very point at which the sale is due to take place. This scrutiny will also allow more transparency on the valuing of Royal Mail in relation to the proposed sale price. That applies to a post-final-bid situation, about which the noble Baroness, Lady Kramer, was so concerned. Having that transparency prior to the bidding process would undermine the Government's ability to leverage the price that they could secure. Such an explanatory document would give transparency, but only in a post-final-bid situation.

Amendment 6 sets out what the explanatory document should cover. The terms of agreement for the sale of Royal Mail will be highly significant but they are not yet known. A buyer has to be found and negotiations have to take place. No one at this point knows what the terms will definitely contain but their impact is of public interest. An explanatory document should provide a report on consultations and representations received, which should include those from user groups, bodies representing rural communities, pensioners, those with disabilities, businesses including small businesses, other operators, employee representatives and the devolved Administrations. The amendment provides for certain persons making representations to be afforded confidentiality. I understand that this is consistent with the provisions in the 2006 Act. One can also understand that there may be matters of commercial confidentiality, including some from the bidder and other private carriers, which would require this. The report would also provide a detailed regulatory impact assessment and such other information as the Minister considers would be of assistance to Parliament in considering the proposed disposal.

A number of concerns about the Bill necessitate the Minister returning to Parliament with the proposed disposal order and an explanatory document at the point of sale. These concerns have been reflected in the amendments tabled to the Bill, both here and in the other place, and in contributions by noble Lords from all sides of the House. The central part of the Bill enables legislation; it enables the Government to privatise Royal Mail. However, that is not the end of the story. As the Minister said in replying to Amendment 4, the Government are looking for maximum flexibility in this Bill. There is much detail yet to crystallise. Royal Mail needs capital investment and a buyer will want to see a business case. Therefore, the highest price, or even an acceptable price, may come from giving the buyer the greatest freedom to be profitable. A Government keen to secure a buyer will be under pressure to maximise freedom for the purchaser. There is a great deal left to regulations. Many uncertainties still exist and will require parliamentary scrutiny.

I will recap some of those concerns and uncertainties. While I acknowledge the merits of the transition to Ofcom as the regulator, there is still uncertainty about the regulatory regime, including how the move from licensing to regulatory authorisation will impact on the maintenance of the minimum universal service requirements over time and the robustness of any universal postal service obligation placed on a universal service provider. It is important that the terms of any sale or disposal do not pre-empt the setting or delivery

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of those obligations in any way that would be detrimental to users' needs, business needs and citizens' social and economic interests. We do not know the terms of the sale-no one can know them prior to negotiation or the detail being settled-so there could be a tension between the terms of sale and the regulatory principles in the Bill.

There will be a need for reassurance that the terms of the sale do not qualify or pre-empt the ability of Ofcom to discharge its duties under, for example, Clause 28 on such matters as access points, universal service and financial sustainability; Clause 42 and the financial obligations that could be placed on a universal provider; or Clause 35, to which the Minister referred, and Clause 37 on the universal service provider's network access and universal service conditions. Ofcom is unlikely to be able to override the terms of any sale agreed by the Government when Ofcom seeks to set or impose regulatory requirements on universal service provision.

A further area of uncertainty is the future of the post office network and the commercial relationship between the Royal Mail and Post Office Ltd. The Government are anxious to suggest that the Bill is not about the post office network. However, one cannot entirely divorce Post Office Counters from this Bill. Parliament has been assured that a commercial relationship between these two businesses will be sustained. The key test here, however, is of whether it is sustained at current levels or is slowly eroded by Royal Mail to the detriment of the nationwide network of post offices. No one can truly answer the question of how the terms of sale with any bidder will impact on those assurances at the moment. Once privatisation has taken place, it will be difficult for a Government to influence an inter-business agreement between a privatised Royal Mail and Post Office Ltd. The Government have not specified to date a minimum number of outlets across the UK where counter services must be provided, notwithstanding that in other countries legislation does so specify.

A primary driver for full privatisation of Royal Mail is the need to secure private capital investment. Securing that investment will be heavily influenced by the viability of the business model captured by the terms of sale. This will not be solely a matter of asset price or of how much the Oxford sorting office can be sold for, but will be about the extent of regulation and commercial freedom and network access conditions. Market conditions for postal service operators are challenging because of the growth of e-substitution and the digital media. Any potential buyer will know this. Any analyst will look at the regulatory framework within which a privatised Post Office will have to operate.

These are weighty issues, which will determine how a future privatised Royal Mail will continue to perform its functions as a provider of affordable, non-discriminatory, universal postal services. Currently no one can truly assert what the full terms of any sale to a purchaser will be because those negotiations have not taken place. That is precisely why scrutiny at the level of a super-affirmative procedure, accompanied by an order with an explanatory document, is appropriate. I accept that Parliament cannot micromanage postal services. However, it should try its hardest, given that the sale may not take place for some years, to ensure

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that the interests of the user, the citizen, the taxpayer and the Exchequer are protected by directing the Secretary of State to return to Parliament with a proposed disposal order and an explanatory document at the point of the disposal that will be the subject of a super-affirmative order.

6 pm

Viscount Eccles: My Lords, we can only admire the way in which the noble Baroness, Lady Drake, put forward her amendments. She has carried out a lot of due diligence and her speech was wholly admirable. However, my problem with it is-noble Lords will guess that I have a problem with it-that I do not see any way of removing uncertainty now or in the medium term or, as she suggested, in three or four years. I hope that that pessimistic estimate turns out to be wrong and that this matter is resolved in a lot less time than four years.

The uncertainty arises primarily from the behaviour of the market. We have talked a bit about other privatisations. The steel industry was mentioned. That industry was in decline when it was privatised. However, the opposite was the case with British Telecom. A lot of our experience of privatisations is highly coloured by the market conditions prevailing at the time. If what I have picked up turns out to be true, one of the issues which faces a mail operator is to find new streams of business and not to rely just on the mail and the universal obligation to deliver it at the same price to every household in the country. That brings me to one of the uncertainties about any deal that might be proposed by the Royal Mail to the Secretary of State as being a deal that he or she might wish to approve. I think that I have mentioned this before. There could be two bidders-there might even be three-with very different solutions. It is not a question of there being one deal. In a negotiation you may well find that not only is there more than one bidder but their bids are so different that you have to have two completely separate sets of due diligence to make sense of them and to make a recommendation to the Secretary of State. As I see it, that is the way that this matter will go forward.

In those circumstances I am very doubtful about the role of Parliament except in an ex-post involvement through the National Audit Office and the Public Accounts Committee, as my noble friend on the Front Bench said earlier. Then Parliament will have its opportunity to say whether it thinks that the Secretary of State made a good or bad decision in backing one of the recommendations made to him or her. Parliament will have to be satisfied with an ex-post role.

As regards the super-affirmative procedure and the 60 day period, 60 days is a long time for a bid to remain open without being reneged on or altered. In my opinion it simply is not practical to think that any bidder will be willing to go through this process. Given my past experience of buying and selling businesses, if I was faced with these amendments in the Bill, I think that I would say, "Please will you assure me that this part of the Bill is not going to be triggered because if it is my bid is withdrawn?" or I would not enter the negotiation in the first place. The intentions behind these amendments are absolutely clear to all of us and

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if the circumstances of the Royal Mail and the mail market were entirely different we might be able to live with such a procedure. However, I do not think that we can live with it in these circumstances.

Baroness Wilcox: My Lords, this group of amendments seeks to add to the Bill a requirement for the Secretary of State to make an Oral Statement and obtain additional parliamentary approval before there can be a relevant disposal of shares in a Royal Mail company.

Amendment 5 of the noble Lord, Lord Young, proposes that an order on the disposal should be subject to the affirmative procedure. The noble Baroness's Amendments 6 and 17 seek to insert into the Bill a requirement for a super-affirmative procedure before there can be a disposal of shares. Like my noble friend Lord Eccles, I congratulate her on the thoroughness of these amendments which set out clearly the process that is required under the super-affirmative procedure. The noble Baroness may be new to your Lordships' House but from these amendments it is clear that her knowledge and attention to detail will ensure that its business receives proper and close scrutiny in the years to come. I congratulate her on that. From my noble friend Lord Eccles we received a master class in how to buy and sell businesses. I suspect that I shall lean on him heavily as this Bill goes through to make speeches like that again.

I do not believe that further parliamentary procedures should be required before there can be a disposal of shares in Royal Mail. A committee in the other place has fully debated the disposal of shares as set out in this Bill and this Committee of the Whole House is now debating the issue. The disposal of shares to enable an injection of private capital into Royal Mail is part of a package of measures set out in this Bill which should be scrutinised as a package. The disposal of shares should not be looked at in isolation but alongside the other two essential parts of the package-tackling the pension deficit and reforming the regulatory regime. Richard Hooper emphasised the importance of this package when he gave evidence to the committee in the other place. The noble Lord, Lord Young, asked about the timetable for state aid clearance. We have not at this stage notified the European Commission of the proposed aid but we will do so as soon as we are ready. As I said earlier, this Government have learnt the lessons of 2009. We will take a staged approach to all the steps we need to take before a sale can be completed.

The Opposition's Postal Services Bill in 2009 did not include a requirement for additional parliamentary procedures before there could be a disposal of shares. As noble Lords opposite themselves said in 2009, additional parliamentary procedures would be unwelcome because they would create uncertainty for potential investors. During the passage of that Bill, noble Lords representing the then Government suggested that noble Lords would agree that the appropriate place for commercial negotiations to take place was not on the Floor of the House.

Noble Lords opposite have expressed interest in the value of Royal Mail. The uncertainty that would exist if a disposal is subject to voting in Parliament would

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only further reduce the value of the business. This would damage the chances of achieving the best deal for the taxpayer and the company from any future disposal. I fail to see how this amendment fits with other amendments tabled by noble Lords where there has been an emphasis to take forward a sale of shares quickly. These amendments would insert time-consuming mechanisms that would add delay to a disposal.

With regard to legislative provision for the Secretary of State to make an Oral Statement, we do not think that is necessary whenever there is a sale of shares. The Bill is setting the minimum requirements for government action. What is important is the principle that information on this sale should be provided to Parliament. The requirement for a report in Clause 2 applies not only to the first sale of shares but any subsequent sale of shares. I fully accept that an Oral Statement might, of course, be appropriate for the first sale of shares, but would it also be a good use of time if, for instance, five years later Ministers decided to put an extra 100 shares into the employee share scheme? We are committing in Clause 2 that there should be a report to Parliament every time the Government reduce their stake in Royal Mail. We will, of course, discuss with the House authorities the appropriate format for such reports at the relevant times, including whether or not an Oral Statement is appropriate.

Finally, the noble Baroness, Lady Drake, asks in her amendments for evidence of consultation and an impact assessment. I point the noble Baroness to the extensive consultation carried out by Richard Hooper in his two independent reviews on the future of the Royal Mail and the impact assessment published alongside the Bill. On this basis, I ask the noble Lord to withdraw the amendment.

Lord Young of Norwood Green: My Lords, I thank the Minister for her response to the contributions. It was another interesting debate. I feel that I have been trumped by my noble friend Lady Drake in her forensic analysis of the super-affirmative procedure. She certainly demonstrated her knowledge of it and her diligence.

This issue is a matter of judgment. I did not expect the noble Viscount, Lord Eccles, to leap to his feet and say, "Yes, I agree with this". He referred to the behaviour of the market and the introduction of more uncertainty. We balance that against accountability and the ability of Parliament to scrutinise but not negotiate. I look forward to hearing from the Minister when she notifies the European Commission, because that is an important point. She rightly pointed out that there was no provision for an affirmative procedure in the 2009 Bill. However, we were not going for a 100 per cent disposal. As the Bill is further scrutinised, we will analyse the issue of whether Oral Statements are required for a range of future share sales.

I will reflect on the nature of this debate and the Minister's response. I warn that I may well return to this matter on Report but, in the circumstances, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendment 6 not moved.

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Amendment 7

Moved by Lord Young of Norwood Green

7: Clause 2, page 1, line 16, after "decision," insert "before any sale,"

Lord Young of Norwood Green: My Lords, Clause 2 relates to the Government reporting on their decision to dispose of shares in a Royal Mail company. As the Bill stands, the Secretary of State must, as soon as reasonably practicable after making a decision about arrangements for the sale of Royal Mail, lay a report before Parliament on the detail of those arrangements. The report will be made after the decision has been taken. It can also be made after that decision has begun to be enacted. The report must state the kind of relevant disposal that the Secretary of State intends to make and the expected timescale for undertaking it.

As currently drafted, there is nothing in the Bill to prevent the Secretary of State proceeding with a disposal of shares in all or part of Royal Mail before a report is laid before Parliament. The Bill requires only that the report is laid before Parliament as soon as is reasonably practicable. This is a cause for significant concern. Opportunities for proper accountability and oversight are potentially compromised by this arrangement. It does not allow for suitable scrutiny of the proposals. The Government must be accountable to Parliament for their actions. Parliament must have oversight of such important policy before it is enacted.

The amendment provides simply for greater accountability and transparency in the Government's plans. It does not prevent a sale but restricts it to after such a time as Parliament has had an opportunity to be fully informed of the Secretary of State's plans. Royal Mail is an incredibly important and valuable asset. It touches the lives of everyone in this country, employs 160,000 of them and has an annual turnover of more than £9 billion.

Royal Mail has struggled with a tumultuous history in recent years. Post Office closures and the impact of competition and regulation have taken their toll on the business and the public's experience of engaging with the company. It is important that any further change is right for Royal Mail and is implemented correctly. A key way to ensure that this happens is to allow for an adequate level of parliamentary scrutiny of the Government's plans. It is essential that Parliament follows the detail of the share disposal and ensures that the Government seek to maximise their return on the value of this asset and secure a sustainable future for Royal Mail and the UK postal industry.

I therefore urge support for the amendment, which requires the Secretary of State to lay his report on the detail of his decision regarding the sale of Royal Mail before any such sale takes place. I beg to move.

6.15 pm

Lord Hoyle: I am sure that the Minister will accept the amendment because it makes sense to have a report before any sale takes place. What is the point of reporting to us if the sale has already been completed? There is no point whatever to that. I am certain that

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she will agree to the amendment with a view to the application of democracy. It might be the first success that we have had this Session. I notice the noble Lord, Lord Hunt, shaking his head behind her. I know that he is the Minister's mentor, but I ask her to disregard him. Why not be a democrat and accept this?

Viscount Eccles: I must say that the noble Lord, Lord Hoyle, said that with great charm. However, what will we do in Parliament if the bidder says that he will not make his bid unconditional if the matter is to be submitted to Parliament?

Baroness Wilcox: My Lords, the amendment seeks to ensure that the Secretary of State lays a report before Parliament before there is a sale of shares. I shall talk quickly, because I am worried about the blandishments of the noble Lord, Lord Hoyle, influencing me before I reach the end. I believe that the drafting of the clause makes it clear that the report should be laid before a disposal of shares is made. The clause requires the Secretary of State to lay a report as soon as reasonably practicable after a decision has been made to undertake a sale of shares.

The arrangements needed to organise a disposal of shares in Royal Mail to a trade buyer through a competition or to conduct a public flotation would take several months. It would not be the case that the Secretary of State would decide over breakfast to sell shares in Royal Mail and then complete the sale by the time we in this House enjoy our evening dinner. It simply would not happen that way. The starting gun for work on the specific arrangements for a sale would be a decision by the Secretary of State to undertake a sale. Under the Bill, the Secretary of State has to lay a report before Parliament as soon as reasonably practicable after a decision is taken to dispose of shares. This would be before a sale of shares. I therefore kindly ask the noble Lord to withdraw the amendment.

Lord Young of Norwood Green: I thank the Minister for her response. I must admit that had I known that the blandishments of the noble Lord, Lord Hoyle, would be that effective I would deploy him more regularly and more often. That way, we might achieve acceptance of at least one amendment. We have gone from considering affirmative and super-affirmative procedures to a report. Blandishments from me or the noble Lord, Lord Hoyle, seem to be of no use whatever. Nevertheless, we still believe that this is a reasonable request. It is part of what we would describe as accountability and scrutiny. For the time being, I beg leave to withdraw the amendment-again, on the understanding that I may well return to this matter on Report.

Amendment 7 withdrawn.

House resumed.

6.19 pm

Sitting suspended.

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Energy Bill [HL]

Energy Bill
Copy of the Bill
Explanatory Notes

Report (2nd Day)

6.25 pm

Amendment 167

Tabled by Lord Whitty

167: Before Clause 99, insert the following new Clause-

"Compensation where the Secretary of State requests termination of offshore lease or agreement to lease

(1) The Secretary of State shall make a scheme (in this section, an "early termination compensation scheme") to have effect where-

(a) a lease granted or agreement to lease has been made by the Crown Estates for the purpose of construction and operation of a generating station powered by wind, wave or tidal energy, or of equipment for transmission of electricity at a site in United Kingdom territorial waters or the REZ;

(b) that lease or agreement to lease gives the landlord power to determine the lease or agreement where the Secretary of State so requests on the basis that the whole site, or any part of it, is required in connection with oil or gas works or rights; and

(c) the landlord proposes to determine the lease or agreement, as regards the whole site or any part of it, as a result of such a request.

(2) An early termination compensation scheme-

(a) must require the owner of, or person seeking to exploit, the oil or gas works or rights in question to pay compensation to the full extent of the loss which is likely to be incurred including the recovery of any wasted expenditure, loss of profits and any consequential loss suffered as a result of such works, by the lessee or holder of the agreement to lease as a result of the determination;

(b) may, subject to paragraph (a), make such provision as the Secretary of State considers appropriate for the computation of compensation;

(c) must make provision for the procedure applicable to the making and determination of claims, including provision for resolution of matters, in the event of disagreement, by an independent body;

(d) must provide for the Secretary of State, when satisfied that compensation as required by the scheme has been agreed or resolved, so to certify in writing; and

(e) may contain such other provision as the Secretary of State considers appropriate.

(3) The landlord must not determine the lease or agreement to lease until the Secretary of State has certified the determination in accordance with subsection (2)(d).

(4) Subsections (1), (2), (5), (6), (7)(b) and (8) of section 33 apply, with the necessary modifications, to an early termination compensation scheme."

Lord Davies of Oldham: My Lords, I had hoped that we would have a replacement to move the amendment of the noble Lord, Lord Whitty, who is not able to be here. However, we have no one, so the amendment is not moved.

Amendment 167 not moved.

Amendment 168

Moved by Lord Judd

168: After Clause 99, insert the following new Clause-

"Bodies able to produce and supply renewable energy

Production and supply of renewable energy by National Park authorities and the Broads Authority

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(1) Section 11 of the Local Government (Miscellaneous Provisions) Act 1976 (production and supply of heat etc. by local authorities) is amended as follows.

(2) After subsection (1) insert-

"(1A) In subsection (1) the definition of a "local authority" shall be understood to include the Broads Authority and National Park authorities when applied to subsection (1)(a), (b) and (d) (production of heat or electricity or both; establishment and operation of generating stations for production of heat or electricity or both; and use or sale of heat or electricity)."

(3) In subsection (3), after "a local authority" insert "including the Broads Authority and National Park authorities"."

Lord Judd: My Lords, we live in an age of communication, but I was in a meeting at the other end and there was no Lords screen; it was just intuition that brought me back. The amendment is intended to raise on Report a matter that we discussed in Committee. The aim is to put the parks and broads authorities on the same footing as local authorities in being able to develop alternative energy possibilities in the national parks and in the broads authority area, and to feed back into the national system. That has been made possible by legislation for other local authorities, but somehow these authorities were not included. The purpose of the amendment is simply to ensure that they are put on an equal footing.

I will make two points. First, the park authorities are very keen to do this. They have found all sorts of imaginative ways in which it could be done, and which would be very much in keeping with the purposes, environment and character of the parks. Small projects done appropriately by park authorities could be a great generator of interest in the possibilities that could be undertaken by other people; they could have great demonstrative value. For all these reasons, I hope that we will get some firm reassurance from the Minister that we will see the possibilities opened up for the park authorities without further delay. I beg to move.

Lord Deben: My Lords, having been rather critical of the national parks in the past, I support the comments of the noble Lord, Lord Judd. They should be accepted with one small caveat; namely, that the national parks ought in these circumstances to do everything in their power to make sure that others who are in the national parks should be able to play a part in this, and do things independently as well. My one concern is that the national parks should not feel that this is something only for them. It should be something for everyone who lives in the national parks, and when it is more suitable for other people to do something, I hope that they will be able to do it. Not all, but one or two national parks are inclined to believe that only what they do is acceptable. With that caveat, I hope that the Minister will help the House to agree with what the noble Lord, Lord Judd, seeks to do.

Lord Davies of Oldham: My Lords, I am grateful for that last contribution from the noble Lord, Lord Deben. He indicated that past experience of the national parks was not always entirely satisfactory. As we all recognise, what Minister ever finds that a group for which he is responsible is entirely satisfactory? However,

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the noble Lord indicated that he did not quite subscribe to the perspective that my noble friend Lord Judd proposes in his amendment, and I am very glad that today he has indicated that he supports the amendment, which is an important contribution to the Bill. I am sure that the Minister will look upon it favourably. The national parks will not be asking for anything outrageous, merely that they should play their part.

We all recognise the uniqueness of the national parks' ability to commit themselves to aspects of renewable energy. I agree with the noble Lord, Lord Deben. The national parks should not be able to operate in an exclusive manner; they must also look towards canalising within their areas others that can make this contribution. However, there is no doubt that providing an opportunity for the national parks to contribute to these renewable energy developments will be advantageous, and I hope that the Minister takes the same view.

6.30 pm

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, I very much welcome the amendment of the noble Lord, Lord Judd. In Committee, we all spoke very favourably about this particular aspect. At the time, I said that I would, through my officials, actively look to see whether we could include this measure, and I have good news. We have consulted and carried out research, though counsel, and the good news is that the national parks have the authority to undertake this role. We now have to encourage them to understand that they have that opportunity. I know that, in addition to the message that I shall be sending the national parks myself, I can count on noble Lords here to ensure that this message gets back to them. I am extremely pleased with this development, as, I hope, is the noble Lord, because it saves us having to move a government amendment, which would only have taken more of your Lordships' time.

I re-emphasise what my noble friend Lord Deben said. It is important that national parks understand their responsibility and how they transfer that responsibility to the people who live within them. It is important that they exercise the authority that they have through this amendment, and that they support renewable activities and microgeneration for those who live in national parks. I hope that that satisfies the noble Lord, Lord Judd, and I ask him to withdraw his amendment.

Lord Judd: This is very encouraging news and I hope that it is not just in the world of aspiration. I have absolutely no doubt about the Minister's personal commitment to, and hopes for, this area. However, I hope that a way will be found by the Government to get firmly on the record what the parks' powers are in this respect. I hope that he can give me an assurance on that.

Lord Marland: Perhaps I may reassure the noble Lord that we will get something on the record, and I shall be very happy to write to him outlining the details.

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Lord Judd: In those circumstances, I thank the Minister. His response has been very constructive throughout our deliberations on this matter, and this is very encouraging news. I just say to the noble Lord, Lord Deben, that every time he speaks on the national parks, I am dying to know which two national parks so obviously got under his skin when he was Secretary of State.

With regard to the point about the role of the parks and the role of the people within them, as I understand it, that is very much how the authorities envisage the future. They have to be certain that people who undertake projects of this or any other kind do so in the context of the purposes of the parks and that they do it in the most sensitive, environmentally friendly way, respecting the objectives and not breaking them. However, if people want to undertake possibilities of this kind within that firm commitment, I am sure that the park authorities will welcome such co-operation with those who want to play a part.

Above all, I thank the Minister and, at this stage, I beg leave to withdraw the amendment.

Amendment 168 withdrawn.

Amendment 169

Moved by Lord Lea of Crondall

169: After Clause 101, insert the following new Clause-

"PART 4AEnergy revenues, taxes and subsidies: equitable price effects

Energy revenues, taxes and subsidies: equitable price effects

(1) The Treasury shall publish an annual financial abstract of all fiscal and quasi-fiscal instruments, including revenues, tax expenditures and subsidies, which relate to the supply of energy, including hydrocarbons.

(2) The Office for Budget Responsibility shall produce annual assessments, having regard to each carbon budgetary period specified under the Climate Change Act 2008, of the incidence on each sector of the economy, including-

(a) manufacturing and services;

(b) public and private transport, including-

(i) road travel (by bus and private vehicles),

(ii) rail and air travel (both personal and freight);

(c) home and industrial heating.

(3) The Office for National Statistics shall publish in easily assimilable form an assessment of how each fiscal instrument or market intervention affects consumers with different levels of income.

(4) Both assessments shall be tabled for discussion at a periodic forum of industry, trade unions, consumers and other stakeholders; and the forum shall publish its minutes and executive summaries of documentation shall be circulated widely."

Lord Lea of Crondall: My Lords, the proposal in this amendment is, in some respects, complementary to the green industrial strategy. I think that the Government are doing rather well, in terms of the co-ordination within government, in getting their act together on a green industrial strategy, and this Bill bears witness to that. I know that a couple of weeks ago the Green Economy Council had its first meeting on the green industrial strategy. The council is chaired by Vince Cable and attended by Chris Huhne and Caroline Spelman, together with, I believe, junior Ministers from the Treasury and other departments.

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Apart from Ministers, there is very wide participation from members of industry, including the modern energy industries, and trade unions.

However, that is totally separate from where I think there is currently a gap in the narrative so far as concerns the general public, although it is in the same family of issues relating to carbon and so on. I refer to the tax subsidy side of the jigsaw puzzle. There is concern at the lack of an easily understandable narrative about how the tax and price side affects industry and how what one might call the fiscal energy accounts affect the consumer.

At the end of my speech I shall come back to the nature of the body that I am proposing to deal with this issue but, first, the question to be asked is: what sort of information flow on the taxation and price effect side is needed? I have set out briefly in the amendment the role of the Office for Budget Responsibility in providing verification of, and therefore greater credibility to, the picture presented by the Treasury. I also mention the role of the Office for National Statistics. It is a very important part of the governance of Britain but in some respects it has its own independent role, as must be the case in all countries. We all go round the world talking about the independence of audit and statistics as being central to a properly run modern mixed economy. Statistical bodies certainly have to be seen to be independent, and the ONS can, separately from the Treasury, produce independent studies-for example, on the income distribution aspect, which is measured in several ways, including through the composition of the retail prices index and the consumer prices index.

However, we need two sorts of information. One is what one might call a flow chart of the final incidence of all the taxes and subsidies faced directly by consumers today and indirectly through industrial sectors-transport being a notable example of that, given the weight of hydrocarbon fiscal imposts, and heating being another good example. Of course, that is information that can be presented at a point in time, but more significant in the dynamics of the hugely changing scenario over the next five to 10 years-and it is more or less a revolution in how the fiscal context of energy is governed-is the carbon floor. Over time, there will be a hugely important set of indirect subsidies relating to the carbon floor compared with if it were not there. Broadly speaking-you could have a very complicated debate on this-you can underpin a carbon price agreed nationally or internationally, or you can have a carbon tax, and we could debate that.

Another idea is the new entry tariff for electricity. That was announced by the Treasury and DECC in a Statement last December. You do not have to look into a crystal ball when you can read the book. A straightforward carbon tax-I shall use that as a proxy for all other hydrocarbon taxes-is highly regressive. We know that four times as much share of income is spent on carbon by the bottom decile compared with the top decile. That information is often fed to journalists. The person in the Rolls-Royce pays more but not as a percentage of his or her income. Unless people are deliberately setting out to mislead, it is not sensible to say that.

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It is also not sensible for people to say on the BBC or anywhere else, unless they want to be mendacious, that people who no longer own cars because they cannot afford them are no longer part of the calculation under the heading of cars. Although that is the rule in the Office for National Statistics, there is a linking mechanism. If you are a youth looking for a job and you do not have a car, there is not much comfort in someone saying, "By the way, you haven't got a car so this is not a cost to you as measured in the retail prices index". People have to get their brains round that-this is the central theme of my speech and my amendment-so that they do not think they are being sold a pup. On home heating, currently the top decile of people pay 2 per cent of their income and the bottom decile pay no less than 16 per cent of their income.

I think the Treasury, DECC and others collect an amazingly interesting variety of statistics, some of which are hidden. Officials very kindly took me through some of the things available. I thought I knew roughly what was available but there were two or three things I had not heard of. That is not hiding one's light under a bushel; it is a failure to factor in or agree, a priori, the fact that statistics do not speak for themselves but they need some relevance to a narrative that is presented to people in Burton upon Trent. That does not happen at the moment. It is vital and it will be increasingly challenging to ensure that that happens in future. I put it to the Treasury-some of my best friends work in the Treasury-that they deliberately confuse the need for confidentiality and secrecy when it comes to the Budget. There is a question of how open they should be when it comes to simplifying information for popular consumption. You cannot get away from the fact that the Treasury is a highly political department because it and the Chancellor take a lot of heat from the public and the media on the big issues of the economy, taxation, employment and so on.

Against that background, I strongly welcome the creation of the Office for Budgetary Responsibility. I shall be corrected if I am wrong, but I think that the precursor to that was a statement by Gordon Brown or Alistair Darling before the election; they were present at the conception. I think it is now separate from the Treasury in terms of the building; it has its own Act of Parliament and I think it even has a telephone number. I spent months trying to ring it up and someone said, "Who do you want?". I said, "Who are you?", and he said, "I'm in the Treasury". I said, "I'm trying to get the Office for Budget Responsibility". There was a lot of shuffling around and then I heard, "Jonathan, are you the Office for Budget Responsibility?"-I am caricaturing it of course. That will be an increasingly important part of the national governance furniture.

6.45 pm

The OBR fits the requirement in my amendment like a glove. It is a cross between the Treasury and the Institute for Fiscal Studies. In other words, you can ring it up, you can go and see the people, you can discuss things and you can say, "How does that add up?", and so on. That will be a bit of a culture shock for the Treasury, but I am sure it will get used to it and come to love the OBR.

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I am underlining this so heavily because the analysis on this increasingly complex area-I echo a phrase from the noble Baroness, Lady Noakes, who I believe is on a skiing holiday at the moment, although I do not think that should be in Hansard-has to be at the unimpeachable end of the spectrum. It will be open to ordinary mortals as well as to Select Committees and so on to ask questions. Those questions will not be batted off, as questions to the Treasury often are, on the grounds that the Treasury high priesthood is not running public seminars in understanding statistics.

Another reason why transparency is highly important -comparing apples with apples-is that to gauge the subsidies per kilowatt hour of different forms of generating electricity, it is essential to make sense of the economics of each source and maybe that can be monitored and corroborated by the forum on carbon taxation, the body that I am suggesting in my amendment.

I draw attention to an interesting supplement in this week's New Statesman, where there are various examples of why it is very important that people are not conned into giving large amounts of money to different interests on different forms of energy without total clarity about what is coming in return. I quote from one of the authors:

You can say that again.

Another aspect of the playing field-

Baroness Northover: Perhaps I could remind the noble Lord that, according to the Companion, he is expected to keep to 15 minutes. Given the time on the clock, he might want to draw his remarks to a close.

Lord Lea of Crondall: I am sorry. I have read the Companion. I am moving on amendment so the time limit is 20 minutes.

Baroness Northover: The important thing is for us to focus on the matter in hand; perhaps the noble Lord might bring his remarks to a sharp conclusion.

Lord Lea of Crondall: No, I am sorry, but I think that that is a bit rough when I planned on the basis of what I was told this afternoon was the interpretation of the Companion. Are you making a ruling?

Baroness Northover: I am reading what it says in the Companion. We are losing time. Whether it is 15 minutes or 20 minutes, I am sure that the noble Lord will wish to bring his remarks to a clear conclusion.

Lord Lea of Crondall: I will take another three minutes as a compromise, if I may, because I am not there yet.

Carbon capture and storage is another good example where lobbyists say that they need to give confidence that they can recover their up-front costs. That is in fact a demand for an open-ended subsidy. I could go

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on. Those are all difficult questions to put into the jigsaw puzzle that the statisticians have to put together. We cannot just have random subsidies all round.

I could mention the electricity market reform proposals, where there are four options-the noble Baroness, Lady Northover, will be pleased to know that I will not read them all out. How many people in this country -how many people in this House-know about them? If we are talking about baseload nuclear and the problems of making wind power work, we cannot shut down wind power, so will nuclear have to shut down when the range of electricity use between the summer night and the winter night is between 25 gigawatts in summer and 50 gigawatts in winter? What will the rules be about that?

I make my last point. We may think that this is complicated, but it is against the background of a spike in the world price. We must be clear which is the world price effect and which is domestic subsidies for people in the street. That is essential politically. I hope that no one thinks that I am talking in a partisan sense. It can mean less need for higher indirect taxation if people take the view that the important thing is the reduction of carbon growth, but the Treasury will not be keen on seeing that as a scope for lowering indirect taxation.

I am on my last thought. I am very pleased that the noble Baroness, Lady Northover, in our last day in Committee, said that she agreed with a few ideas in my amendment then-there were some things with which she disagreed, which I have therefore taken out. The Government are ticking the box of transparency. Secondly, they are taking the first tentative steps to what I call saleability. We still have to jump the next fence of how to get a high degree of responsibility around the country. That is the signal, which I hope can be taken on board, that there is a good deal of convergence on the view that the approach of the amendment is rational and reasonable. It is very much in the Government's interest, as well as the wider public interest. I hope that the Minister will now, having heard about the rationale and future adjustments that can be made, give careful consideration with her colleagues before the Bill reaches the other place.

Lord Jenkin of Roding: My Lords, the noble Lord, Lord Lea of Crondall, has adumbrated a number of very important issues. I do not dispute that for a moment. It was not altogether easy to follow all the details, but there is no doubt that we have been moving through a consumer revolution in how energy is priced and sold, and the impact of that on the population at large. There are clearly attractions to the noble Lord's proposal. He mentioned the new green economy council. I, too, have studied the proposals for that and welcome that initiative. We look forward to seeing what comes from that. I am not sure how far that differs from the forum that he proposes in the last paragraph of his amendment.

The noble Lord's amendment goes very wide. It covers not just prices but taxes and the whole question of the impact on different sections of the community. There is a need for more clarity on this. I cite just two examples. In case some noble Lords feel that they are

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being singled out, I shall not mention any names. I find it absurd that people can in two successive amendments or speeches demand that this or that renewable should be supported by the renewables obligation certificate-which, as we all know, is fed straight through the supplier companies and falls on to the bills of consumers-and then in the next amendment set up a great cry of woe because of the impact that this will have on the fuel poor. Some people do not seem to have been adding those two things together and realising that there must be some conflict between them: to ask for more subsidy and say that they are very sorry that it will put the price up.

I agree totally with the noble Lord that there is a need for more public understanding of what this is all about. I give another example very briefly. When the Secretary of State for Energy and Climate Change made an extremely important Statement last October heralding electricity market reform-the noble Lord referred to that in his speech-he drew on the paper published by the department last July entitled Estimated Impacts of Energy and Climate Change Policies on Energy Prices and Bills. At least, I think he was drawing on that. However, there was a freedom of information appeal to the department reported in the Times this January. The headline read:

"Energy shake-up will lift electricity bills to £1,000 in 20 years".

That may be a massive exaggeration; I do not know, but there are great uncertainties in all this. That seems to be what the noble Lord, Lord Lea of Crondall, is seeking to identify and to provide a process whereby there can be more public understanding. I am sure that we would all applaud that.

The noble Lord proposes to add a major measure, or series of measures, to this Bill, which is quite specific. The Energy Bill is primarily dealing with the Green Deal.

Lord Lea of Crondall: I have a problem with what the noble Lord said. Is he suggesting that the Table Office did not think that this amendment could be made to the Bill?

Lord Jenkin of Roding: If the noble Lord will just wait a moment, that is the point that I am coming to. I think there is a lot in what he said, but I find it extremely difficult to see how we could add at virtually the last stage-although he raised it in Committee and mentioned it at Second Reading-a series of major proposals.

Lord Lea of Crondall: My Lords-

Lord Jenkin of Roding: The noble Lord must allow me to finish my sentence. How could we add a major series of constitutional and economic innovations which would clearly need infinitely more discussion? The House is extremely full at the moment, and we could go on discussing this for some time, but it is not for this Bill. I hope that the noble Lord will find other opportunities to bring this forward on other occasions, because there are many things that could be discussed;

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but at the moment, at this stage-on the last day on Report; we will have Third Reading next week-I just do not feel that we should accept this amendment.

I do not know what my noble friend is going to say from the Front Bench, but I think that it would be a somewhat bizarre action for this House, at this stage of the Bill, to add the very far-reaching amendment that the noble Lord has tabled. He has spoken to it eloquently and explained what he is trying to achieve. I have indicated that I think there is much merit in that for generating public understanding. However, I would advise the House against trying at this stage, with what would inevitably be a comparatively limited debate, to add a wholly new process of government in order to fulfil the requirements of the amendment. I just do not think that we should do that.

7 pm

Lord Lea of Crondall: Before the noble Lord sits down, I have to come back and say that he is totally misinformed about how this amendment was written, when it was written, where it has been placed in the Bill, and so on. This amendment was written for debate in Committee-just like the innumerable amendments that were debated with speeches of several hours at a time by the noble Lord, Lord Jenkin. That is the first thing. The second thing is that the fact that it has been placed at the end of the Bill was not my doing. I could have had it in Clause 2, and then that argument would have fallen. Thirdly, I have made it clear that we have reached a stage where a lot of noble Lords have said that the points are interesting in terms of scrutiny. The amendment also has to go to the House of Commons. I find it amazing that that is the best argument that the noble Lord can offer regarding an amendment to which I have given a lot of study and thought. I have looked at statistics and discussed it with civil servants-

Baroness Northover: I remind the noble Lord that he will have the opportunity to respond to all the points made in this mini-debate at the end of the debate, after the Minister has replied.

Lord Jenkin of Roding: I shall finish my speech, as I gave way to the noble Lord to allow him to make his intervention.

I am not complaining that the amendment is placed at the end of the Bill. Of course the noble Lord has placed his amendment where it appears to fit. I am concerned that he is proposing a major series of changes to the whole way in which all the organs of government-the Treasury, the Office for National Statistics and all the others-should conduct themselves, and a new forum to examine the assessments. With the greatest respect, I do not think that this can be added to a Bill of the very specific nature that we have before us.

Lord Deben: My Lords, I hesitated to break into my old mentor's speech, but I want to agree with him and to say to the noble Lord, Lord Lea of Crondall, that in his speech he proved why this is impossible. In this amendment, the Office for National Statistics is supposed to publish all this in an easily assimilable form. Your

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Lordships' House might suggest that after listening to the noble Lord, Lord Lea, it is quite difficult to feel that it would be easy to produce an easily assimilable form.

The second thing I would say to the noble Lord, Lord Lea, is very important. It is always true that the poorer you are, the more heavily any imposition weighs upon you. It is not new to say that a particular sum is heavier on somebody who has a small income than on somebody who has a large income. That is why it is very important in the way in which we deal with these matters to see that it falls as lightly as possible on those who are least able to bear it. To spend a great deal of time producing this material in a form that I fear will not be easily assimilable and will probably not be read by the very people for whom it is intended does not help this issue. This issue is that in everything the Government do, in everything the coalition do, they have to seek to do it in a way that is as equable as possible. I say to your Lordships that we are already placing huge responsibilities upon the system of government, and to add to those this very detailed, extremely expensive and, I have to say, probably not used collection of new statistics without any real indication that it is going to be of any practical value is unnecessary not only at this stage of the Bill but at any stage of the Bill.

Finally, the thing we should be concentrating upon is enabling individuals to influence their spending. That is what matters, not what the Office for National Statistics says. Individuals should be able to see how much energy they are using, how they can best prevent that energy being used, how they can opt-in to the Green Deal and how they can make their lives more comfortable and happier. That is what we should be concentrating on. We should be moving away from this determination constantly and centrally to mull over, reproduce, redo, represent and reargue all these cases and get down to the real issue. How does Mrs Jones do something about her own energy use? How does she make her home more energy efficient? How does she know when she is using that energy? How is she able to take advantage of lower tariffs by, for example, doing her washing at a time that is not a peak time? All those things demand the fast installation of smart meters. I hope they will not be prescriptive but will merely say what they are supposed to do rather than how they do it. I hear some rather unnerving information from the ministry that sounds as though it wants to be terribly detailed about it. I hope it is not going to be like that. That is what we should be emphasising: helping individuals to make choices that benefit them rather than providing a lot of statistics that I suggest will be read by nobody. If they will be read by nobody, they will do nobody any good.

Lord Oxburgh: My Lords, I, too, have some sympathy with the interest of the noble Lord, Lord Lea of Crondall, in proposing this amendment. However, I, too, do not feel that this is the way forward. This is a very big matter and requires very careful consideration. At this point, I think I have an opportunity to offend all political parties in the House by saying that within the energy industry there is bewilderment that pretty much all the political parties believe that energy poverty

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should be treated separately from every other sort of poverty at the expense of distorting our energy market and our energy costing. In the view of many outside, it would be much more sensible to let energy prices do what they must. It is inevitable that we go into a more expensive energy world and handle the whole poverty problem together.

Lord Teverson: My Lords, I, too, sympathise with a number of the themes that the noble Lord, Lord Lea, has brought forward, but I remind the House that this is Report stage and, to be honest, I find this amendment quite muddled. I find it very difficult to understand its detail or even what it is trying to achieve in terms of its words. I understand from the noble Lord, Lord Lea, what he is trying to achieve, but I am not even sure that if we put this into the Bill it would achieve that. Subsection (1) of the proposed new clause refers to a range of things including quasi-fiscal instruments. I do not know whether that is a technical Treasury term that the noble Lord, Lord Lea, has got from his friends in the Treasury, but I do not understand it.

I seriously do not understand what proposed new subsection (2) means. It seems to connect carbon budget periods, which as we know are five years, with annual assessments, and I am not sure what it is trying to do. The list in proposed new subsection (2)(a) to (c) exclude the industry that paid for my mortgage in the first 20 years-the road freight industry-inland waterways and shipping, and I am not sure that its purpose is comprehensive.

Proposed new subsections (3) and (4), again, come back to statistics that I think are generally available. It has not been difficult for me to find most energy statistics that I have tried to find.

I agree that we have an issue with the amount of money that ROCs and feed-in tariffs actually cost consumers, as my noble friend Lord Jenkin of Roding reminded us, and with the way in which these charges affect groups in fuel poverty differently. However, I honestly do not feel that this amendment achieves what we want to achieve within a reasonable understanding of what this amendment actually says. For that reason, I find it impossible to support it at this stage of the Bill.

Lord Davies of Oldham: My Lords, this has been a fairly substantial debate that justifies at least one decision which the House came to the other evening: that we would not be able to rush consideration of this and the other amendment and deal with them within the time limit that we had at that time. I am grateful to my noble friend for having generated quite a significant debate on the issues.

It is a little unfair to suggest that this amendment comes somewhat late in the Bill, as we discussed it extensively in Committee. I indicated from the opposition Front Bench that we did not find parts of it entirely acceptable at that stage. In particular, we could see Treasury colleagues bridling at the concept of hypothecated taxation, which is an additional complicating dimension to the proposals. My noble friend Lord Lea has worked hard, and harder, to take out that part of his amendment and still retain the merits of the original amendment.

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This amendment has come in its proper place in our consideration of the Bill. It is not as though we are at the last stages of our consideration of this Bill in Parliament. The Bill started in this House, and our job in a sense is to clarify the issues and to make amendments where we think amendments should be made so that our colleagues in the other place can address the Bill with the benefit of the considerable expertise that this House brings to bear on matters of this kind. We therefore owe my noble friend a considerable debt for having raised these issues.

Does this matter fit within the Bill? I understand the point made by the noble Lord, Lord Jenkin, but I fear that that point can be made about every Bill that is likely to come before the House. I can think of Bills that relate to energy, Bills that relate to the environment and green issues, and Bills that relate to a Treasury position. All will say that their Bill focuses on particular issues, as the noble Lord, Lord Deben, spelled out accurately, and that we should not try to drop a load of matters into it that are not extraneous but that bring other dimensions into the Bill that are not its primary purpose.

7.15 pm

The danger is that we fail to address the very issues which my noble friend Lord Lea has worked so hard to address. How do we get coherent energy policy that is transparent enough to be conveyed effectively to our fellow citizens? Of course I presume, as my noble friend Lord Lea did in his opening remarks, that we are all straining towards the same objective. We all know that to hit the carbon reduction targets and to tackle the energy crisis over the next 30 to 40 years we will need a consensus that goes beyond all of us in this House. It will have to be a consensus that obtains on Governments who are 20 years away and who will be composed of the next generation or the one after of our fellow citizens, so of course we seek to be consensual. However, to be consensual we need to take our citizens with us.

The merit of this amendment is that my noble friend is struggling to identify the framework in which we establish degrees of transparency and orderliness on issues that span government departments and successive Bills on energy and other matters but that need to be seriously considered. My noble friend must be right when he says that the danger is that we identify meritorious things for subsidy and are then involved in an accumulation of individual actions and support that lack coherence and that do not have a strategy that is necessary for the task that we face.

I respect the reservations of noble Lords who have spoken in this debate, but surely it must be right for the Government to face up to the complexity of this issue. We ought to take as many opportunities as we can to identify this complexity. If by accepting this amendment we send a signal to the other place that it, too, must engage in this debate, and even if at the end the Government are not convinced that they can make the strategy in this amendment workable-and we know the strength of the Government when it comes to their majority position-at least we will have significantly advanced the cause of identifying for our

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fellow citizens crucial aspects of energy policy that it will certainly be difficult to win their support for and agreement to. Excessive division on some objectives would render nugatory the whole consensus that we require in such a crucial area.

I hope that the Minister, when he comes to respond to this amendment, will take it warts and all and accept that its broad proposals are worth continuing to debate, given that we are far from the final stages in Parliament of consideration of this very important Bill.

Lord Marland: My Lords, I am very grateful to all noble Lords who have spoken on this matter. Indeed, the noble Lord, Lord Lea, has yet again provoked a substantial debate-43 minutes on Report so far, and an hour and 15 minutes in Committee-on a very complicated subject. He identified in his speech the complications of getting to grips with this. To some extent-and I will make a partisan point here-we have in his view inherited a complicated situation that could perhaps have been solved over previous years but that is so complicated it is probably very difficult so to do. In fact, he has spent time with our officials, and with Treasury officials whom we put at his disposal, discussing this matter and, I hope, better understanding the complications.

The noble Lord is perhaps concerned that there is not enough information. Well, there is the Office for Budget Responsibility. There is the National Audit Office, which produces annual statistics. There is our own departmental publication, our annual report, which produces the statistics that are being mentioned. We have the Digest of United Kingdom Energy Statistics and an annual publication on energy prices. I could go on.

My noble friend Lord Deben makes an extremely good point. How much continual burden of statistics and information are we going to put on people, which they would have to digest in order to work out what is going on, in the name of transparency? As we have agreed through these debates, transparency is fundamental. That is one reason why we are bringing the smart meter into people's homes to make readily available the information on the electricity that they will be spending. We have discussed throughout the merits of smart meters, a fundamental platform for this Bill.

I agree with the noble Lord, Lord Jenkin, it is fundamental that we have better public understanding of the cost of electricity and it must be the aim of the Government to do that. Not for one moment do we not accept that the noble Lord, Lord Lea, makes some important points, but we cannot sort this out in nine months of government or, with a click of the fingers, in the short period of time that has been available to this Bill.

However, it should be reviewed and we should look at it. We should embrace it in our electricity market reform programme, which is under consultation, and we will consider it through that process. Perhaps appropriately, as the noble Lord, Lord Jenkin, suggests, it will be part of a Bill that looks at this area and not be part of one which has fundamentally been driven by the Green Deal, admittedly with a few add-on bits. The noble Lord, Lord Judd, recently proposed an addition in an excellent amendment.

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The Government do not feel that this is an appropriate amendment for this Bill. We believe that it is something that we should consider. Like the previous Government, we constantly believe in transparency and helping the general public to better understand this complicated issue of energy and electricity prices. Perhaps I may remind noble Lords that we are committed to this. On that basis and with that assurance, and in recognising the important and great value that this amendment has brought to the debate, I hope that the noble Lord, Lord Lea, will withdraw his amendment accordingly.

Lord Lea of Crondall: My Lords, I hope that I do not have to come back in three years' time because there are riots in the streets and name all noble Lords who said that this did not need to be done. There will be great anxiety in the everyday lives of people because matters will have got mixed up in their minds about the obligation. I am sorry that the noble Lord, Lord Deben, is now so intellectually confused that he does not remember that it was he, following Kyoto, who brought in a degree of hypothecation whereby we are transferring funds to mitigation in Bangladesh and so on. These are all part of the deal. It involves a huge amount of money, which soon will approach $500 billion a year. Therefore, people should have a chance to understand.

I am afraid that everyone from the noble Lord, Lord Jenkin, on has contradicted themselves and has made totally inconsistent remarks. It seems that if people do not understand the statistics, presumably that is their fault and the poor dears will never be able to understand them. We should put the statistics in a form that people can own and understand, giving them a picture of the problems, and reasons for the price increases, that they can accept. I do not know whether the noble Lord thinks that he is living in ancient Athens, but we have a wider electorate than they had there.

Lord Jenkin of Roding:I think that the noble Lord has totally misunderstood what I said. I went to great pains to indicate that I thought that the noble Lord, Lord Lea, had raised a number of extremely important points. My only argument, which has been supported by other speakers around the House, is that this is not the right Bill in which to do it. There needs to be much more discussion and probably a separate Bill-perhaps the next energy Bill.

Lord Lea of Crondall: On that point we can both read tomorrow's Hansard to check who used which argument. Certainly, the noble Lord, Lord Deben, and, I think, the noble Lord, Lord Teverson, deployed the argument-no doubt one of them will put their hand up and say whether it was them-that this is an expensive statistics-gathering exercise. I do not think that we are talking about gathering more statistics, which are very expensive to produce. We are talking about £60 billion or £80 billion. What a ridiculous argument.

I hope that Ministers will think about this proposal before the Bill goes to the Commons and that our opposition colleagues in the other place will want to

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take it forward. We are moving into a dangerous area of potential misunderstanding. We have a huge spike in the world oil price and on top of that an alternative between a carbon floor and a carbon tax-not exactly the same thing-both of which will be regressive.

I am sorry that the noble Lord, Lord Oxburgh, is no longer in his place because he made a sweeping statement of socioeconomic doctrine that we should achieve all this through original income distribution and not try to help people with their home heating Bills. I do not know what responsibilities he has had in the world of meeting actual citizens-he is a very distinguished scientist-but we have to look at the wider public interest and the acceptability of peaceful governance of this country. I think that there is something like that in one of the prayers that the right reverend Prelates read from time to time. Something along those lines at least is in the Book of Common Prayer of the Church of England. That argument is a total red herring at this stage. It has been put down as an amendment just like the amendments of the noble Lord, Lord Jenkin. We will have to consider what to say at Third Reading.

Things are changing fast. In another astonishing aside, the Minister said words to the effect that we are rushing things. For a coalition, which has an agreement to change the world, the constitution, the Parliament, the way in which we elect people, this dog's breakfast of the Public Bodies Bill, and a long list of other things coming forward, such as the health services Bill, to say that we cannot take these measures in this sort of timescale is not a very telling argument.

In my opening remarks, I made the point that this is not a partisan amendment at all. I am very sorry that the Minister felt that he had to say that this mess, or words like that, has been inherited from the Labour Government. That is ridiculous. Things are happening all the time. We have the world oil shock and the new EU framework, which I understand is about transparency and subsidies as regards renewable energy. All these things are happening and we are trying to get ahead of the curve. All that I can say to noble Lords is "Mark my words". For the moment, I beg leave to withdraw the amendment.

Amendment 169 withdrawn.

Clause 103 : Extent

Amendments 170 to 173

Moved by Lord Marland

170: Clause 103, page 77, line 18, leave out "sections 9 and 11(2) to (4) and (8)" and insert "section 9"

171: Clause 103, page 77, line 21, at end insert-

"( ) section (Acknowledgment of green deal plan in connection with other transactions etc)(3) (further provision made in regulations for acknowledgment of such a plan);"

172: Clause 103, page 77, line 28, leave out "sections 10 and 11(5) to (7) and (9)" and insert "section 10"

173: Clause 103, page 77, line 31, at end insert-

"( ) section (Acknowledgment of green deal plan in connection with other transactions etc)(4) (further provision made in regulations for acknowledgment of such a plan);"

Amendments 170 to 173 agreed.

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Clause 104 : Commencement

Amendments 174 to 180

Moved by Lord Marland

174: Clause 104, page 78, line 7, leave out "sections 10 and 11(5) to (7) and (9)" and insert "section 10"

175: Clause 104, page 78, line 10, at end insert-

"( ) section (Acknowledgment of green deal plan in connection with other transactions etc)(4) (further provision made in regulations for acknowledgment of such a plan);"

176: Clause 104, page 78, line 22, leave out "88" and insert "(Amendment of section 166 of the Energy Act 2004)"

177: Clause 104, page 78, line 35, leave out ", 8(1) and (5)(a)"

178: Clause 104, page 78, line 35, after "11" insert ", 12(1), (2)(a), (3)(a) and (4)"

179: Clause 104, page 78, line 38, leave out "(except sub-paragraphs (1) and (5)(a) of that paragraph)"

180: Clause 104, page 78, line 39, after "12" insert "(2)(b), (3)(b) and (5)"

Amendments 174 to 180 agreed.

Prevention of Terrorism Act 2005 (Continuance in Force of Sections 1 to 9) Order 2011

Prevention of Terrorism Act 2005 (Continuance in Force of Sections 1 to 9) Order 2011
15th Report Joint Committee Statutory Instruments.
8th Report Joint Committee Human Rights.

Motion to Approve

7.30 pm

Moved By Baroness Neville-Jones

The Minister of State, Home Office (Baroness Neville-Jones): My Lords, the purpose of the order before the House today is to renew Sections 1 to 9 of the Prevention of Terrorism Act 2005 pending their repeal and replacement with an alternative regime. These sections expire after one year unless renewed by order subject to the affirmative resolution of both Houses. The effect of this order will be to maintain the control orders powers until 31 December 2011, and I emphasise that this is a limited and temporary renewal. As the Home Secretary said on 26 January in another place, this allows us to bring forward the legislation introducing a replacement system. In due course the House will obviously be able to debate the new legislation in detail.

By way of a preliminary I should like to set out the context for the proposal before the House. Sadly, I have to say that the threat to the United Kingdom from terrorism is as serious as we have faced at any time, and it remains assessed by the Joint Terrorism Analysis Centre as "severe". Since the beginning of the year, there have been a number of major terrorist attacks that have resulted in the deaths of many innocent people. These attacks have occurred in different countries

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from Russia to Afghanistan to Yemen and to the Philippines, and they show that a large number of fatalities still result from terrorist attacks. This country has been well protected, but nevertheless in the UK we have witnessed a number of significant terrorist plots that have been uncovered over the past year, and recent investigations and trials show that terrorist networks are continuing to plan and to attempt to carry out attacks. The threat we face continues to evolve, and I do not think that it is going to diminish or change to any material extent in the near future. That is the background against which we have to look at the temporary legislation and the new regime.

The coalition's commitment to redress the balance in our counterterrorism powers was made in the run-up to the election and we therefore conducted a review of the counterterrorism and security powers. That review included consideration of the necessity, effectiveness and proportionality of control orders. On behalf of the Government I thank the independent oversight given to that review by the noble Lord, and now my noble friend Lord Macdonald. The review underlined that the Government's absolute priority is to prosecute suspected terrorists in open court and that imposing restrictions on suspected terrorists who have not been convicted in open court should be the last resort. I want to emphasise that prosecution is our objective. Where restrictions are required they should, as far as possible but given the need to protect the public, continue to support the primary objective of prosecution.

The review concluded that for the foreseeable future there is likely to continue to be a small number of people in the United Kingdom who pose a real threat to our security but who, despite our best efforts, cannot be prosecuted or, in the case of foreign nationals, deported. Our reluctant conclusion is that there will therefore continue to be a need for a mechanism to protect the public from the threat of such individuals.

Noble Lords may be aware that the noble Lord, Lord Carlile of Berriew, reached the same conclusion in his most recent and, indeed, his last independent report on control orders, and the other statutory consultees support the proposal to renew the control order powers. I should like to say to the noble Lord, Lord Carlile, and I am sure that other noble Lords will want to join me in this, that the Government thank him for his very thorough work over the past 10 years on the review process. His reports have been a model of clarity and succinctness and a great aid towards everyone's understanding of what was at issue.

I am aware that a number of Members of this House and members of committees have said that they would have liked to have been able to see, at the time of the renewal of this order, the legislation that we are going to bring forward. I have to say that we will bring forward that legislation as soon as we can. We regard it as extremely important to get it right. We do not want to get ourselves into a position where subsequently we are reviewed and changed in our intentions through court action.

However, it is only right, as we have already done, to give the highlights of the provisions that we intend to bring forward, which mark real changes in the regime. It will provide, among other things, a two-year

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maximum time limit on the measures, which will clearly demonstrate that these are targeted and temporary. It will be possible to impose a further measure on an individual only if there is evidence of new terrorism-related activity after the original measure was imposed, which of course is different from the current situation. Measures will have to meet the evidential test of reasonable belief that a person is or has been involved in terrorist-related activity, and this of course is a higher threshold than the test of reasonable suspicion of such involvement, which of course exists under the current control order regime.

The police will be under a strengthened legal duty to inform the Home Secretary about their ongoing review of a person's conduct with a view to bringing a prosecution. A more flexible overnight residence requirement will replace the current curfew arrangements. Forcible relocation to other parts of the country will be ended. Geographical boundaries will be replaced with a power to impose much more tightly defined exclusion from particular places only. There will be no power to exclude someone, for instance, from the totality of, say, a London borough. Individuals will have greater freedom of communication, which will include access to a mobile phone and to a home computer with internet access, subject to certain conditions such as providing passwords. They will have greater freedom to associate. For example, there will be no blanket restrictions on visitors or meetings. They will be prohibited only from associating with people who may facilitate terrorism-related activity. And of course they will be free to work and to study, subject again to any restrictions necessary to protect the public.

These changes will allow individuals to continue to lead a normal life as far as possible, subject only to the restrictions necessary to prevent or disrupt involvement in terrorism-related activity. We are clear that the more limited restrictions that may be imposed may indeed facilitate further investigation as well as prevent terrorism-related activities. The new regime will be accompanied by an increase in funding for the police and the Security Service to enhance their investigative capabilities. That is an absolutely key part of the new measures. We intend to bring forward legislation to this effect shortly and, as I have said, it must be properly prepared so that it may be properly scrutinised by this House. We welcome the support given by the noble Lord, Lord Carlile, to these measures and, indeed, the comments that have been made by the Joint Committee on Human Rights in its recent reports. The committee has expressed some welcome, even if perhaps only cautious, to the new system. The Government will of course reply formally to the detailed recommendations that have been made in those reports.

In the mean time, the Government are clear that it would be irresponsible to allow the current regime to lapse in the absence of alternative measures and while the investigative capabilities of the law enforcement and security agencies remain to be developed. As I say, that is a key part of the new regime. It is therefore important to underline that, for the time being, control orders should remain legally viable. While they may be imperfect, they have had some success in protecting the public and they are fully compliant with the European Convention on Human Rights.

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It is sometimes asserted that controlled individuals do not know why they are subject to a control order. I remind the House that, as a result of the Law Lords judgment of June 2009 in AF and others, this is no longer the case. That judgment specified that controlled individuals must be given sufficient information about the case against them to enable them to give effective instructions to the special advocate.

Pending the introduction of the replacement to control orders, we believe that it is right, proper, proportionate and essential that these powers continue to be available in order to protect the public. As I have said, we are currently preparing the legislation to introduce the replacement system, which we will bring forward in the coming weeks. I have no doubt that noble Lords will want to give the new measures thorough scrutiny and we must have time to do that. While that process is under way, it would not be responsible for us to leave a gap in public protection. Therefore, we believe that it is right to ask the House to renew the powers for this temporary period, the alternative being a situation in which those who pose a threat to our safety could go about their activities with far too great freedom.

This is the last occasion on which the House will be asked to renew these powers. Before transition to the new regime is complete, the risk to the public would be grave indeed were the control order powers not to be renewed. I therefore ask the House to approve the renewal of the powers for the transitional period. I commend the order to the House.

Lord Lloyd of Berwick: My Lords, as all your Lordships know, control orders were introduced in March 2005 as an emergency measure. We in this House, after an all-night sitting which I shall never forget, insisted that the Government should have to come back after 12 months in order to justify the extraordinary powers which had been conferred on the then Home Secretary. They were indeed extraordinary powers, because they enabled him, on suspicion, to impose what amounted in effect to house arrest on an individual who had never been charged with any offence. Yet here we are, six years later, being asked to renew those very same powers yet again.

In a powerful briefing note which I am sure the Minister has read with care, Liberty describes the control order regime as being "completely discredited". It would be difficult indeed to disagree with that view. However, Liberty is equally critical of what is now proposed in place of the control order regime, the so-called terrorism prevention and investigation measures -TPIM for short. We do not, of course, know what the Bill will contain, and it is the greatest pity that we do not have a draft of the Bill before us today. When we do get it, I hope that it will be subject to pre-legislative review.

The present indications are that the Bill will contain many of the objectionable features of the existing control order regime. Indeed, Liberty describes the new regime in its briefing note as simply control orders under a different name. Whether or not that is right is not a question for discussion today; that will be a matter for great debate when we see the Bill. No doubt the Government will then argue-as the Minister

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has indicated already-that there is a real difference between the Home Secretary being required to believe that a person is a terrorist and the Home Secretary being required to suspect that he is. Similarly, the Government will no doubt argue that the overnight residence requirement is much less restrictive than the curfew, which is to be abolished, and no doubt they will argue that the TPIM will allow access to the internet and much greater freedom to communicate and associate with others.

7.45 pm

As I say, that is an argument for another day. For the purpose of today's discussion, I am prepared to assume that the Government are right about all that. We know that eight individuals are currently subject to control orders. One has been subject to a control order for more than four years; three have been subject to a control order for between two and three years; and four have been subject to a control order for between one and two years. No doubt they will all have been glad to hear that control orders are to be abolished at any rate by December. To extend the control orders beyond December-I understand the Minister to say that that will not happen-in the light of what may then be yet another emergency, would be the gravest injustice. Is there not something else that we could and should be doing now for those wretched individuals in anticipation of the regime? I have already mentioned that under the new regime the Home Secretary must believe that an individual is a terrorist; it is not enough that she should suspect. That being so, surely she should now review each of those eight cases and see whether they satisfy the stricter test which will be the order of the day from December onwards. If they do not in any case satisfy the stricter test, it is surely the duty of the Home Secretary now to quash those control orders rather than to wait and see what the new Bill says when it is ultimately in force.

Even if the Home Secretary decides in the case of all eight individuals that the control orders satisfy the stricter test, there is still much that could be done. There is a body of which the Minister will be aware called the control order review group. It is its duty to keep under continuous review the obligations to which each of those eight individuals is subject and to ensure that their current obligations are proportional to the risk that they currently pose. One of the eight individuals currently subject to a control order is subject to a 14-hour curfew. Happily, the curfew will be abolished in December, or at least not later, and replaced by what is called the overnight residence requirement. On no view would an overnight residence requirement extend to 14 hours. Surely it is therefore the duty of this body, CORG, and of the Secretary of State to consider that case and to see whether there is any ground for keeping the curfew as long as 14 hours. Surely it could be reduced now to eight hours, or whatever is thought to be a likely period of an overnight residence requirement.

It may be said that there is no harm in asking those individuals, who have waited so long without being charged, to wait at least until the new regime is in force. We are dealing here with human beings who

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have been subjected to the most unusual restrictions on their liberty for many years, under a system which is now discredited. In the cases that I mentioned, it has been in operation for more than two years, which will be the maximum under the new regime. Surely it is time to show these individuals a little humanity. It might even increase the chances of mounting a successful prosecution against one or more of them if we take the course which has been so strongly advocated by the noble Lord, Lord Macdonald-who I am glad to see in his place-in the report on the review.

I hope that the noble Baroness will take the points that I have made back to the Secretary of State and let us know in due course whether there is not something that can be done now in anticipation of what will be in the Bill.

Lord Judd: My Lords, we all recognise that this is an immensely difficult issue. Before I say anything about it, I take this opportunity to yet again express, without qualification, my admiration for Ministers, the security services and the police in the heavy responsibilities they carry on our behalf in protecting society. I hope that anything I say today will be seen in the context of that sincere recognition of what is being done on our behalf and will be constructive.

The Minister referred to the Joint Committee on Human Rights and I shall concentrate on its report. She said that there will be a government reply to the Joint Committee. However, the Joint Committee serves and reports to us and it is not satisfactory for us to consider the report in the absence of the detailed ministerial response to it, because we ought to be able to take that into account in evaluating the observations of the Joint Committee. I pay tribute to the hard work which is done consistently by the committee on these matters.

Without any observations of my own, I shall concentrate on highlighting what the Joint Committee has said. I thought the Minister was a little ungenerous in her comment on its comment. I read as quite positive its remark that,

Those are splendid words from a committee which is not renowned for making observations of that kind and I endorse them wholeheartedly.

The report then, of course, introduces the word "however" and questions,

In the committee's view,

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The Joint Committee then goes on to make some specific recommendations. The Government should explain to us-in this debate, presumably-

It also recommends that:

"The Director of Public Prosecutions should be asked to consider whether a criminal investigation is justified in relation to each of the eight individuals subject to existing control orders and whether, in each case, everything possible is being done to investigate and gather evidence with a view to such prosecution".

The committee then makes a very important point about which I am quite concerned. Until a few years ago I was a member of this committee and I remember coming up against it even then. It recommends that:

"The Minister should meet with representatives of the special advocates to discuss their continuing concerns about the fairness of the special advocates system".

This troubles me because, when I was on the committee, the special advocates shared their concerns with us. They said it was very stressful being expected to operate in a way which was quite alien to their professional training and the way in which they normally would expect to conduct themselves in court and in the fulfilment of their professional responsibilities.

This brings me to why these matters are so important not only in terms of abstract principle but in practical terms. First, we say that we are protecting society with all these measures, but what are we protecting? Our system of law is absolutely crucial to what makes Britain a society worth defending, and I am always anxious that, inadvertently, over a long period of time, we are eroding the quality of that law and undermining the professional commitment of the people within it by what they are expected to do with the special arrangements in place.

Secondly, we are, in a sense, in this dreadful ongoing challenge that confronts us, also involved in psychological warfare. In psychological warfare, highly manipulative extremists are always looking for opportunities to exploit doubts or misgivings. Therefore, our ability to demonstrate that we are doing things transparently and keeping within the law as it has always operated in this country is terribly important to winning the battle for the minds of people. This gives poignancy to the recommendations of the Joint Committee.

The Minister referred to her commitment to pre-legislative scrutiny before the new arrangements are brought into play. I am glad that she did so because there is evidently a misunderstanding. In its report, the Joint Committee draws attention to the fact that, in giving evidence, the Minister did not seem to suggest that pre-legislative scrutiny would be appropriate. To have that reassurance from her tonight-I would be grateful if she could underline it in anything she says later-is important.

Another point on the findings of the Joint Committee which should be emphasised is that it also recommends that,

I do not want us ever inadvertently to give a victory to the extremists and terrorists. If we are not to do so, a resolute commitment to transparent justice-to people knowing why they are being held and the reasons for it-is absolutely essential. If we are not doing that, then all kinds of genuinely concerned, not sceptical or cynical, young people-and not only young people-in society will be very anxious and will not be full-heartedly behind the Government in the responsibilities that they are trying to discharge on our behalf.

8 pm

Lord Macdonald of River Glaven: My Lords, I declare an interest as the independent overseer of the review of counterterrorism and security powers. Like the Joint Committee on Human Rights in its recently published report, I strongly welcome the Government's conclusion that the current control order regime can and should be repealed, consistent with public safety. It is obviously essential that it is replaced with something that is very different in character and not simply a pale imitation. We shall have to look closely at the legislation that comes forward to ensure that that is not what the Government have in mind. The review has clearly shown that the present regime is inefficient, grants excessive power to the Government, and undermines traditional British norms and respect for the rule of law. This may not be surprising. It was introduced by accident, following a series of court judgments adverse to the last Government. It has been a bad mistake.

I also strongly welcome the Government's renewed and strengthened commitment, expressed in their response to the review, to the absolute priority of criminal prosecution. Where people are involved in terrorism they must be detected with all the considerable power at the disposal of the state, then prosecuted and locked up. It is not just public confidence that demands this but also our traditional common-law attachment to the supremacy of due process in criminal justice and our courts. The fact is that the evidence gathered by the review has made it clear that the present control order regime acts as a fundamental impediment to prosecution. This is because the restrictions placed upon controlees forbid the very contact and activity that, under proper surveillance and investigation, lead to evidence fit for prosecution. It is also because far too many controlees are simply warehoused under the supervision of the security services, beyond the scrutiny of criminal investigation, and therefore beyond any real possibility of prosecution.

For good reasons, the instincts of the security services are protective rather than prosecutorial in nature but this practice, and the Security Service's primacy within it, means that some serious terrorist activity remains completely unpunished by criminal law. This is a serious and continuing failure of public policy. Any new scheme introduced by the Government must not replicate this failure. To give reality to the primacy of prosecution, which is the Government's stated aim, it should clearly become an intrinsic part of any new regime that restrictions placed upon individuals should be linked

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to a continuing criminal investigation. After all, if the Home Secretary, under the new regime, is to go to the High Court to assert her belief that an individual is involved in acts of terrorism so that she may obtain an order placing restrictions upon that person, it would be quite absurd for there to be no active criminal investigation into the individual in question attendant upon the Home Secretary's application. Yet that is the position that we are in at the moment.

Of course, if there were always such an investigation in progress, court-approved restrictions mandated for the duration of that investigation, up to a maximum period of two years, would become much more constitutionally acceptable-a form of pre-charge bail. I have no doubt that such a reform would garner broad support for the Government's new regime, including among those most bitterly critical of the current arrangements. This reform would encourage evidence gathering and therefore increase the likelihood of prosecution. It would bring the new regime much closer to criminal justice, which is an obvious good in itself with all the protections that criminal justice implies for suspects. The Government should urgently reconsider their preliminary view on this issue which, frankly, has been hostile.

Again frankly, any Security Service opposition to intense police activity around controlees should not be a trump card. The public interest is wider than the instincts of the Security Service. In fact, the trump card should always be found in locking up those people who want to wreak violence upon our communities and putting them in prison cells for long, long years. This is the true deterrent and it is also the process that truly protects the public in a way that control orders never have.

There is a separate issue. A further conclusion of the review was that relocation-the practice under which people were forced to move to other parts of the country away from home, family and friends-should be abolished, and that long curfews should go. These were among the most bitterly resented aspects of the old regime and for good reason. They were also the most offensive to our traditional norms, imposed as they were without prosecution let alone conviction, and without the controlees being told any more than the mere gist of the allegations against them. Whoever would have thought that in Britain we would have a form of internal exile without prosecution or conviction?

The Government have now agreed that these provisions are excessive, disproportionate and, unnecessary-and I would add offensive. We do not need them, as the Government have now determined. They intend to abolish relocation and long curfews under their new regime. In those circumstances, they should do so now. How can it be right for this House to be invited to extend powers that the Government themselves have conceded are wrong in principle and excessive in practice, particularly when those powers impact so vividly upon civil liberties? I invite my noble friend to consider a way to proceed that does not include renewal of these quite excessive and, as we now know, unnecessary intrusions. Those subjected to them should not have to labour under these oppressive measures any longer.

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There can be no conceivable public interest in obliging them to do so when the measures themselves are serving no useful purpose.

Finally, it will be critical for this House and the other place to examine with great care the legislative proposals that come forward. It is always tempting for the bad old stuff to slip back into a piece of draft legislation. We must not end up in the position of approving a system later this year or early next year which is a form, as some people have put it, of "control order light". We need real reform in this area. If there are to be restrictions, they must be coterminous with criminal investigation. There must be no restrictions which destroy the ability of the state to obtain evidence against people who might have been involved in terrorism, which is precisely the effect of the present regime. It has failed and must stop.

Baroness Kennedy of The Shaws: My Lords, I will be brief. First, I suspect I am one of few people in the House who has been involved in some of these cases in the courts. I have seen them at close quarters.

Many noble Lords will also remember that I was one of those on the Labour Benches who strongly opposed the Labour Government introducing control orders. I opposed them then and ever since. I welcomed the fact that noble Lords on the other side of the House, whose faces are familiar, all went through the Lobbies with me opposing control orders. Now they are sitting in government and I want to remind them of the principled stand that they all took on control orders. It is easy, once in government, to hear poured into their ears the position taken by the security services that somehow this is the only way forward. With regard to the issue of dealing with persons suspected of links with terrorism where it would be difficult to bring them to trial, I have always advocated that surveillance, the use of intercept and so on can be done, but without interfering with liberty in the excessive way that control orders have meant. I am saddened and disappointed that the siren voices of the security services have persuaded the Government that something not very different from control orders should be the way forward. I am sure that I will be one of the people who take part in the debates when the legislation is presented to this House, and I will rigorously test some of the suggestions that have been made.

I strongly support what has been said by the noble and learned Lord, Lord Lloyd, and indeed the noble Lord, Lord Macdonald: given the principled position that the Government are going to do away with control orders, and even if the position is that something else will come in of a lesser order but somewhat similar, it is quite wrong at this moment to keep the thing that they have criticised for so long with regard to the eight people currently subject to the level of suspicion that we have heard about. It cannot be right to continue that until the end of this year. At the very least, the Government should be reducing the constraints upon liberty to the standard that they are intending to introduce, and then that can be revisited in December. However, it cannot be right for them to continue with control orders when they so bitterly opposed their existence once they had been introduced by new Labour in government. I ask that, in the spirit not just of

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decency but of appropriateness, the cases that we have spoken about and the noble and learned Lord, Lord Lloyd, mentioned be revisited.

I reiterate what my noble friend Lord Judd has said: one of the jewels in our crown, one of the great limbs of our democracy, is the way in which we interpret the rule of law. I am a proud champion of the common law. We have always believed that due process was vital before we in any way encroached upon the liberty of human beings. That is a proud tradition here and it is a sort of ceding to the terrorists if you abandon those values, which are so precious in our society. I strongly urge that we do not go down the road of introducing something similar, because it is a poison in the system. It is a way of saying that it was not just a temporary measure; somehow we have bought into this idea, and an alternative to the things that we have always believed in can now be introduced. I urge that we think again about that.

I was interested to hear that the noble Lord, Lord Macdonald, said that there are alternatives, and I hope that in the months to come the Government will look again at what they are intending to do.

Baroness Afshar: My Lords, I add my thanks for the decision by the Minister to abandon forced relocation. However, I have been given to understand by Liberty that this weekend a young man with a young family was forcibly sent off. I want to highlight the law of unintended consequences: a young family is left behind that will be deprived of rights that this very same young man is going to have in the very near future. That means that a child will be raised apart from the care of the father of the household, but that child has committed no crime. My understanding was that the House has always agreed that the interests of children should be put first. It surprises me that at this stage we still are forcibly sending off young people who may or may not be guilty and punishing their family in the process.

8.15 pm

Lord Ahmad of Wimbledon: My Lords, I thank my noble friend for her earlier statement. I join her in thanking the noble Lord, Lord Carlile, for his stewardship of what has been a very sensitive area.

I am reminded of when control orders came about, how they were introduced and the sense of the terrorism that gripped our very shores. I remember 7/7 vividly for various reasons: first, as someone who was travelling at that time; secondly, as someone who would have been impacted directly through both friends and family; and, thirdly, because of what happened in the aftermath when it was perceived that a particular faith or a particular community had indulged in, or been involved in, those acts. For all those reasons, a chill went down my back. It was important at that time that action was taken.

Britain, as many noble Lords have said, is a place of great liberty and freedoms, and that is right. However, the people who enact these crimes or even conceive of them do not respect that. They do not respect these laws, freedoms and liberties. Somewhat ironically, it is

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the very freedoms that are provided by our country that allow them, not to act, but to conceive of acting in that way.

We have heard from many noble Lords that control orders are not the perceived way forward. The Government accept that; indeed, my right honourable friend the Home Secretary has said that quite clearly. However, I am concerned. Until the revisions are introduced, what is the option? What do we do in the interim? The threat of terrorism is alive today. If we cast our mind across the world to Pakistan, in Faisalabad today there has been yet another terrorist attack. As the Minister has said, this is not a threat just to the UK; it is a threat internationally, and we must react to it. Britain is a great place for civil liberties and freedoms, but equally the first responsibility of the Government must be to the citizens and residents in this great country-to protect their freedoms and their rights, yes, but also their safety and security.

While the extension of control orders is not perceived in this House as welcome, until we fill that vacuum there is an absolute need to ensure that our citizens are protected. I am sure that as the new legislation comes forward there will, with the wisdom possessed by this House, be robust debate. For tonight, though, I support the Minister in ensuring that control orders are extended to protect that majority. It is the exception who fall victim to control orders, but the majority must be protected. I lend my support to the extension of these orders, with the hope that the new legislation that we will see will be right for Britain and will continue to protect the residents and citizens of our country.

Lord Bew: My Lords, I would like to thank the noble Baroness, Lady Neville-Jones, for introducing this statutory instrument, which has of course a narrow, technical and short-term focus. In doing so, she displayed her customary vigilance in these matters. I am happy to support the instrument and, indeed, the Government's plans for liberalisation in this area. Like other noble Lords, I particularly welcome the decision to increase access to internet and mobile phones under certain conditions for those affected by these orders, and I am glad, too, that the ability to relocate terrorist suspects in new areas will in all likelihood go. These are necessary, explicable and entirely defensible liberalisations.

We have heard much tonight about the case made by Liberty in a very fine document sent to many noble Lords, but I simply want to make one point on the other side of the argument regarding the extent to which all of this is shrouded in mystery. I simply think that it is possible for all of us to read some of the open-source evidence, including the High Court documentation, on these matters. If one does so, it is much more difficult for one to say that what is at stake here is a mystery of some sort. In fact, there is a significant amount of evidence in the public domain. Perhaps this bears on the argument about the role of the security forces in making a case behind the scenes-no doubt that goes on in all Governments-but, even without access to that sort of information and discussion, which most of us do not have, there is none the less a lot of material in the public domain that the Government have to take seriously. That is a balancing point that is worth making.

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I am happy to support this temporary instrument as a necessary measure for public protection.

Baroness Hamwee: My Lords, the Minister started by giving the context for this order; my personal context falls into two parts. Like the noble Lord, Lord Ahmad of Wimbledon, the events of 7 July 2005 had an enormous impact on me personally, as much as on anyone who was not actually on one of the tube trains or on the bus. In addition, I am hugely aware of the capacity for restrictive measures to act as a recruiting sergeant for actions that seek to achieve destabilisation and that rack up calls for more measures that are contrary to our democratic principles. I have said that because I do not want what I will go on to say to be thought of as being a sort of hearts-and-flowers approach.

The points made in the report done by my noble friend Lord Macdonald of River Glaven and in the recent report by the Joint Committee on Human Rights are issues that I hope the Government take on board in the next stage of dealing with these matters. I hope that both reports will feed into the final design of the measures. Like others, I will not attempt to cover all the ground tonight, but I will make a number of points on which I personally feel particularly strongly.

Respecting the principles of the rule of law and, to the greatest extent possible, applying the normal principles and processes of the criminal law and the criminal justice system are to me, as to other noble Lords, fundamental and indeed essential. I mention simply these requirements: due process within the criminal justice system; judicial, not executive, action; special advocates-the noble Lord, Lord Judd, talked of how what they are required to do is alien to their professional training, but I suspect that it is alien to their instincts as well; the role of the DPP; and that the new measures should be a point on a road to prosecution rather than an end in themselves, which the Minister this evening has confirmed is the objective.

On the issue of curfew, as my noble friend's report recommends-I will put it more crudely than he did-giving those who are suspected of terrorist activity enough rope to hang themselves is in itself very persuasive, quite apart from the other issues. On the objections to curfews, both in principle and in practice, I have to say that I have never been persuaded that ordering someone to stay at home for up to 16 hours a day would deter him if he was determined to commit terrorist actions. Like others, I am pleased to hear that relocations are to cease. Can the Minister tell us any more about that? A residence requirement, which I hope will mean a requirement just to have a normal residential address, is not a curfew and I hope that such a requirement will not come anywhere near being a curfew.

It is important that, as far as possible, the new measures allow the person subject to them, and, importantly, his family, to get on with life. I have read comments by someone who was subject to a control order saying that the arrangements for signing in at a police station could not have precluded work or study more, and that they made normal life completely impossible. Points have been made around the House about the Government reviewing the current orders now and relaxing the regime to one that they have

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already decided is appropriate. The noble Baroness, Lady Afshar, asked the Minister whether it is the case that a young man and his family have been relocated in only the past few days.

In evidence to the JCHR the Minister argued that, despite there being lower numbers of controlees compared with the past, resources for surveillance are not currently adequate to reduce numbers to the level that several noble Lords have described. That may be something that the independent reviewer will be able to consider. No doubt there will be a review before we get to the end of this process. Like others, I hope that there is wide consultation on the legislation and the draft emergency legislation, which the Government propose to create and keep on the stocks in case it is needed. Confining consultation on that to the Opposition on Privy Council terms would not garner the expertise that is available to the Government.

Lord Judd: On one point that the noble Baroness has made, would she not agree with me that the special emergency measures are absolutely a priority for scrutiny because of their very nature? The way that they will be used in an emergency means that it is terribly important that Parliament should look at them thoroughly and think through in advance what their implications will be.

Baroness Hamwee: I almost always agree with the noble Lord; I certainly do on this point. If they are to be introduced as a matter of urgency-no doubt in a climate in which calm judgment will be difficult-that in itself argues for calmer judgment at an earlier point.

The current system is hardly perfect. I recently met someone who had been controlled, although the control order had been quashed. He said that all he understood of the reasons for the order was that he had been assessed as having been trained in countersurveillance. What techniques did he have? He was on the top deck of a bus with his son and turned his back on the CCTV camera. The Minister has anticipated this, but I have recounted the tale because it is part of what we are considering. It indicates how we need to move forward. The controlee does not want his name to be mentioned. I found his story and the comments of Dr Michael Korzinski-the psychologist and clinical director of the Helen Bamber Foundation, whose client he was-profoundly affecting. He talked about the practical, legal, health, emotional and relationship issues and the impact on his family. Dr Korzinski talked about how social isolation, ostracism and stigma affect the brain, saying that his client "was essentially driven mad". I understand from him that there has been no mechanism for oversight or review of the impact of the orders on the mental and physical health of the individuals and their families. People who have been seen at the Helen Bamber Foundation have developed serious mental health problems as a direct consequence of control orders.

It occurs to me that the role of the independent reviewer, with access to an expert panel of mental health and other relevant professionals, could be extended to ensure proper monitoring and review in this regard as well as others. We must be very careful how we treat

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individuals and how-here I think that I echo the noble Lord, Lord Judd, almost word for word-we protect our society from becoming a society which we as citizens would not in our turn wish to support.

8.30 pm

Baroness O'Loan: My Lords, I will be extremely brief on this issue. It is very clear that everyone in this House is opposed to terrorism but the question we must ask is how effective the control orders have been. The noble Baroness, Lady Afshar, asked what their impact had been on those who have been affected by them, not simply those who are subject to the orders but their families and those who suffer the effects of these exclusion orders. The noble Baroness, Lady Kennedy, and the noble Lord, Lord Macdonald, referred to alternative forms of investigation and surveillance.

One of the consequences of not using powers of surveillance and investigation in Northern Ireland to the extent that they led to prosecution was that we saw a development in criminal activity. I am not suggesting that the control orders would lead to that but one of the consequences of repressive anti-terrorist legislation is that it grows the terrorism which it seeks to defeat by virtue of the impact it has on the communities on whom it is imposed and on which it impacts. The evidence is very clear that legislation which is neither proportionate nor necessary has the effect of growing resentment in those communities, and that that resentment can lead ultimately to people becoming involved in, or possibly supporting in some very minor way, the very terrorism which it seeks to defeat. Is it not possible for the control order to slip into oblivion, for the new measures to be introduced in December, and in the mean time to make use of the very extensive powers of investigation and surveillance available under the Regulation of Investigatory Powers Act and other legislation?

Lord Hunt of Kings Heath: My Lords, I am most grateful to the noble Baroness, Lady Neville-Jones, for introducing the order. I echo my noble friend Lord Judd in thanking our security services and police for their co-ordinated work in keeping us safe. We know that plots have been foiled recently. It is clearly our duty to provide the police and security services with the tools and procedures that they need to do their job effectively. As we have heard today and in previous debates, that sometimes means walking a very difficult line in balancing individual freedom with collective safety-the noble Lord, Lord Ahmad, put that very well-with the rights of the wider community sometimes outweighing the rights of the individual. Control orders have been the tool for that and I thought that the Minister said that they had had some success. In an ideal world we would not wish to use control orders. It would be greatly preferable if our criminal justice system could deal with terrorists who wished to cause us harm but the view was taken by the previous Government and previous Home Secretaries that control orders were a necessary evil.

The order before us provides for the continuation of the power to make a control order against an individual when the Secretary of State has reasonable grounds for suspecting that the individual is, or has been,

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involved in terrorism-related activity. I echo the noble Baroness's tribute to the noble Lord, Lord Carlile, for the work that he has done. We know that eight people are subject to control orders at the moment. My understanding-perhaps the noble Baroness will confirm this-is that some of these orders have been made since the coalition Government came to power. The implication of what the Minister has said is that the Government recognise that a number of people pose a real threat to our security who cannot be prosecuted or deported. Therefore, the Government have come face to face with reality in recognising the need for a mechanism to protect the public from the threat that such individuals pose. The Sixth Report of the Independent Reviewer states clearly:

"The control orders system, or an alternative system providing equivalent and proportionate public protection, remains necessary, but only for a small number of cases where robust information is available to the effect that the individual in question presents a considerable risk to national security, and conventional prosecution is not realistic".

It looks like the Government have gone through a steep learning curve in the past few months, but one of the results is an absurd situation whereby the order on 28-day detention was allowed to lapse without the draft emergency legislation being in place. Legislation has now been published but, as yet, we do not know when Parliament will discuss it.

A number of noble Lords referred to the report of the Joint Committee on Human Rights that examines whether Parliament should be given the opportunity to conduct pre-legislative scrutiny of the proposed emergency legislation. The noble Baroness will know that the Select Committee said that it does not accept the Government's reasoning for not providing this opportunity and recommends that the legislation should be published and made available to Parliament for pre-legislative scrutiny. I invite the noble Baroness to comment on that specific recommendation. I also echo the point raised by my noble friend Lord Judd, who referred to the recommendation in the committee's report that the Government should publish a summary of the views of a number of the agencies involved in counterterrorism in order to facilitate parliamentary scrutiny of the review. I accept that the report was published only a few days ago and I would not expect the Government already to be able to come to your Lordships' House with a full response. That would be unreasonable. However, the noble Baroness should be able to say broadly whether she accepts those recommendations and can respond to them.

It is noticeable that the proposed new control order regime pays particular attention to surveillance. We are told that sufficient finance will be available to the police and security services for that resource-intensive proposal. Will new money be made available? The noble Baroness owes it to the House to inform us as to how continuation of the current control order regime will be dealt with, given the financial cuts that the police and the security services are facing. I pray in aid to the noble Baroness the report published today that details some of those cuts.

Will the noble Baroness inform the House about the impact on the capability of our counterterrorism work of the changes proposed in the Police Reform

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Bill that is now in the other place? That is highly relevant to this order and to what is likely to take place over the next few months. I have great reservations about the proposal to impose elected police commissioners on our police forces. I have no doubt whatever that it risks politicisation of our forces and inevitably corruption. That is a debate for another day, but I am concerned about the impact on national strategic policing issues, which are relevant to this debate.

There can be little doubt that police commissioners will be elected on manifestos that are bound to focus on local policing issues. I suspect that it will be a question of which candidate proposes more bobbies on the beat. That is fair enough, but what if these elected police commissioners neglect their national responsibilities? What if they do not make appropriate resources available for counterterrorism work? The noble Baroness speaks with great authority on this issue. Is she convinced that there will be sufficient intervention powers at a national level to ensure that elected police commissioners do not inhibit national security work in which the police have a major role to play? I assure her that we will come back to that issue.

These are not easy issues. As every noble Lord who spoke today said, we in this country have a long tradition of individual rights and freedoms. We are all very proud of that. As the noble Lord, Lord Ahmad, said, we have responsibilities for the safety and security of the public in very challenging times. It is a very difficult balance to achieve. The Official Opposition support the extension of the order this evening. We look forward to the new legislation on how we can scrutinise what happens. I hope that we will be able to reach consensus that meets the requirements of individual freedoms while keeping the safety of our country to the fore.

Baroness Neville-Jones: My Lords, I thank the House for the thoughtful tone of the debate that followed my opening remarks. It demonstrated, not surprisingly, that there is a range of views on these issues. There are strong principles involved and I do not resile in any way from the principled stand that I took in opposition. However, I always said-and it is still the case-that one has to measure what one does against the security needs of the country, and what one does must be consistent with those needs. It is a matter of regret that we came to the conclusion that we cannot simply revert to a situation in which we can rely on open and normal prosecution through the courts. It is much to be desired that that is where we will come to. However, after detailed examination-this was a very thorough process-we came to the reluctant conclusion that we could not dispense entirely with the measures that lie alongside the normal judicial system.

I am grateful to noble Lords for many of their remarks. Perhaps I might have wished that more recognition had been given to the differences that exist between the measures that we are proposing and those that exist at the moment. We had regard to what was said, in particular about the psychological effects of relocation; we took a view on the necessity of a very long curfew; and we did our best to create a situation in which normal life will be open to those who are

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under restrictions and they will be able to work. Many of them do not, but we would like those who have work to be able to do it. We are trying extremely hard not to distort the lives of those individuals who are under restrictions any more than is necessary.

There will be an opportunity for scrutiny of this legislation. That is one reason for wanting to have in place a temporary regime. I was asked about pre-legislative scrutiny. The Government have no problem with this. It is partly a question of the amount of time available to do various things. I am sure that the House will attach importance to us not continuing the existing control order regime longer than we need to. We must allow enough time for scrutiny on the Floor of the House, not only of the TPIMs but also, as the noble Lord, Lord Judd, remarked, of the emergency provisions. I take his point and put it to noble Lords that we need to be practical about how we go about giving the scrutiny that this House and the other place will want to give to this legislation. I am not saying that the Government see an obstacle to it in principle; it is simply that we have doubts about the practicality.

I was asked whether there will be new money for the extra surveillance. The answer is yes, and I shall come back to that in a moment. I was also asked whether we will give information about, or publish, the evidence given by some of the services in the process of the review. I am not going to promise that. I think it will be perfectly understandable to Members of this House why it is necessary to keep the confidence of the security services, in particular, but also the police in this matter. We will do our best to-

8.45 pm

Lord Hunt of Kings Heath: The Select Committee's report came out only a few days ago. Is that a considered response in the light of the report? I entirely understand the point that she is making but I wonder whether the Government need to give a little more time to that.

Baroness Neville-Jones: As I said, I am not going to make that promise. I was about to add a sentence when the noble Lord rose. We will take this under advisement and see whether we can give some kind of summary, but if the noble Lord does not mind, I do not want to give a totally definitive answer to that point this evening.

I was asked a number of detailed points and I shall try, without detaining the House for too long, to go through some of them. Right at the beginning, the noble and learned Lord, Lord Lloyd, asked a number of questions which I think bear on points made subsequently in debate. The implication of his remarks was: would we honour seriously what we have said about the importance of continuing to seek prosecutions? I have three things to say about that. One is that the CORG which he mentioned will conduct serious work. I think that it has always been a serious body but the Government are going to make absolutely certain that the conduct of the CORG-the review body that keeps these cases under continuous and pretty close scrutiny-is serious. We have, I hope, created a situation in which there will be greater possibilities for prosecution. I stress to the House that I think it is only fair to say

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that the primary purpose of these measures is still protective. Nevertheless, within the scope that is offered, we will certainly be looking at the possibility of continuing and bringing prosecutions. Indeed, the operation of the TPIMs themselves may allow that to happen.

I was also asked why, if we believe that the control orders are imperfect-as, indeed, I said myself-we do not abolish them straightaway. I was asked whether it would not be right to do just that. I remind the House of the condition which is very important to our ability to move to a looser regime, and that is the surveillance that needs to be put in place in order to provide the public with the necessary security. That surveillance does not exist at the moment. Individuals have to be recruited; people have to be trained; and we have to have extra capacity and capability in that area, which we do not have at the moment. I do not think it is reasonable to say that you should be able to abolish the existing regime for the individuals who are currently under control orders in the absence of the necessary conditions for a new regime. Having said that, clearly the current control orders come up for regular review. We shall be reviewing them and of course we will be looking at individuals' cases in the light of their situations. As I have said, there is clearly a transition to be undertaken. I do not think that I can go further than that at the moment. I understand perfectly well the point that has been made but I hope that noble Lords will also understand the constraints that we are under in moving quickly from one regime to another.

Baroness Kennedy of The Shaws: My Lords, perhaps I can deal with the issue of moving people to places like Leicester or up to Norfolk and so on. We have decided that that is abhorrent and that it will not be sought by the Home Secretary. Therefore, can we not now bring back from exile the people who have been put on those orders?

Baroness Neville-Jones: When the circumstances are in place and we have the necessary surveillance and protection for the public, we will be able to do so. First we must put in place the conditions that will enable us to operate the new regime.

The noble Lord, Lord Judd, is absolutely right to say, as I should have said, that the Government are extremely pleased that the Joint Committee on Human Rights has welcomed the change. He will also have observed that I did not miss the fact that there were some qualifications in the views expressed by the committee. We shall certainly take those seriously. In particular, he mentioned the unhappiness about the conditions under which special advocates have to operate. In the report there are one or two instances of the

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special advocates' conditions of work being eased. It is a big issue and it goes wider than control orders. That will be taken up and examined, and part of the Green Paper that the Government are to bring forward will be devoted to the use of special advocates and the conditions under which they should be able to work for their clients.

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