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The other two amendments in this group deal with the related subjects of data protection, freedom of information and privacy. We have tabled Amendment 102 to ensure that where public functions of bodies listed in Schedule 5 are transferred to another body, the public will continue to have assurances that the performance of these functions is transparent. They will be audited, the responsible body will report to Parliament on the exercise and expenditure of these functions and the freedom of information and data protection provisions will still apply to the organisation to which the function is transferred.

Then we come on to Amendments 175A and 175B. They are in the name of my noble friend Lord Knight of Weymouth but unfortunately he is unable to be here. His amendments effectively prevent a Minister making an order to share personal data. He was using these amendments to emphasise the complexity of these subjects and his doubt whether it is wise simply to include them in a statutory instrument. If he were here, he would speak of his own experience with data protection in the context of the Education and Skills Bill, which required further amendment through the Apprenticeships, Skills, Children and Learning Bill. The point that he wanted to make is that these are complex and sensitive issues and that, in relation to parliamentary scrutiny, it may be that secondary legislation is not really the most suitable vehicle. As we have

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learnt in the past, if you get this wrong you have to come back and try to put it right at a later date. I beg to move.

6.15 pm

Baroness Thomas of Winchester: My Lords, I speak at this point wearing my hat as chair of the Delegated Powers and Regulatory Reform Committee. As the noble Lord, Lord Hunt, has said, Clause 5 contains perhaps the widest power in the Bill now that we no longer have Clause 11 and Schedule 7. Schedule 5 includes bodies exercising a very wide range of statutory functions. The abolition or transfer of some of those functions could completely alter the character of the primary legislation that set up the bodies in the first place-added to which, any Minister in future could add new functions or alter existing ones considerably. Nothing in any amendments that the Government have so far proposed changes that fact.

That is why the committee of which I am chair has reiterated, in each of its three reports on the Bill so far, the inescapable fact that the powers in Clauses 1 to 5 and 13 are inappropriate delegations of powers. What we are looking for-and I hope that it may still not be too late-is that the Minister should consider amending the Bill to say briefly how these delegated powers should be exercised in relation to each body. The detail could then safely be left to delegated legislation.

Baroness Andrews: My Lords, it is a pleasure to follow the chair of the Delegated Powers and Regulatory Reform Committee, and I reinforce what she said. I declare an interest as the chair of English Heritage and as a member of that committee.

I will address the stand part debate regarding Clause 5, but it is difficult to do that without referring to Clause 11, Schedule 7 and indeed to Clause 8, which we will come on to later. I think that I am the first Member of this House-in this debate anyway-to congratulate the noble Lord on his success in getting rid of Clause 11 and Schedule 7. I know that as we proceed through the Bill today, he will be inundated with congratulations on what he has achieved regarding those clauses; it will be like his birthday. My thanks are very much a foretaste of joy to come.

I have always seen this Bill as more the product of William McGonagall than of Machiavelli in terms of how it had been put together and what it represented. Even for a Government who are fast establishing a reputation for recklessness, the Bill was a step too far. As I recall, the kindest thing that was said in our earlier debates about Schedule 7 was that it was "Kafkaesque"; it certainly created a feeling of victimisation without any sense of the crime that had been committed or indeed the sentence and the punishment that might follow.

I could end there, with unqualified praise, but I must pick up on the points that the noble Baroness, Lady Thomas, made. We are not yet done with this Bill-there are more changes that we have to press the Government to deliver. The problem that was widely recognised in this House, certainly at Second Reading and earlier in Committee, is that the whole Bill, frankly, is misconceived. It is an object lesson in making policy

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by prejudice. It demonstrates a failure to understand the nature, the role and the effectiveness of public bodies. It is an object lesson in how not to make legislation that will provide the substance of many a PhD thesis in future.

In recent days, the Committee has done its work very well by taking individual bodies and holding the implications of the Bill up to the light, defending their future and fate. The stand part debate allows us to say again to the Minister that it is not too late to recognise the fundamental problem that has been established in Clauses 1 to 5: that the powers in these clauses are far too wide. I echo what the noble Baroness, Lady Thomas, has said: Clause 5 is the widest power of all. We know where we are with Clauses 1 to 4; we know what "abolition" and "merger" mean. However, we do not know what Clause 5 implies and those bodies listed in the schedule certainly do not. It is very different in scope. It modifies or transfers functions, purposes and objectives, and could change the rationale for an entire organisation at a stroke-all by ministerial edict. Given the importance of the bodies that are listed in Schedule 5, this is a very serious predicament in which to put them.

It is no wonder, therefore, that the Delegated Powers and Regulatory Reform Committee reiterated in its 11th report on Monday that our original concerns were unmet. In our original report we were concerned about the inappropriate delegation of powers in Clauses 1 to 5. "Inappropriate" is a word that we have returned to time and again on this Bill. We are still concerned about those powers, which are still inappropriate. We said that the delegation of powers in Clauses 1 to 5 was "inappropriately broad in scope" and that there should be appropriate parliamentary scrutiny. That is still the view of the committee. We suggested in our earlier report that if Clause 11 were to be removed, it might make it easier for the powers in Clauses 1 to 5 to be better calibrated to matters that are appropriately left to delegated powers.

Clause 11 will, I am pleased to say, be removed. However, the powers in Clauses 1 to 5 are as yet unchanged. I say "as yet" because the Minister has said that he is considering these concerns. I certainly welcome that. I hope he will be as successful in dealing with that as he was in dealing with Clause 11 and Schedule 7. A crucial concern that we want him to consider before Report stage is spelling out more specifically the purposes for which the powers may be exercised. In Clause 8, the existing references are to matters to which the Minister may simply have regard. That is not strong enough. They do not deal with the fundamental problem of the Bill's silence on the general purposes for which Parliament expects the powers to be used. They need to be so specified. It is extremely important that the Minister should address that point, at the end of either this debate or the debate on Clause 8.

Lord Mayhew of Twysden: My Lords, I, too, am a member of the Delegated Powers and Regulatory Reform Committee. I support everything that my noble friend Lady Thomas has said and much of what the noble Baroness, Lady Andrews, has said. She will not expect me, as a loyal supporter of the coalition Government, to endorse every epithet that she used-

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certainly not the word "reckless", for which I might substitute the word "courageous"- but I warmly endorse the grateful compliment that she paid to my noble friend Lord Taylor for the changes that he has been more than instrumental in securing. As somebody who contributed to a rather torrid debate at Second Reading, when tremendous dissatisfaction with the Bill was expressed, I am extremely grateful that the answers that my noble friend returned with have turned away wrath for the time being. However, as the noble Baroness, Lady Andrews, has just said, that wrath has not gone away. It may have been turned away but it has not gone away entirely. I am afraid there is still more to come, particularly on expressing in the Bill the purposes for which these powers are to be used.

I take it to be a principle of the rule of law that an executive power may be exercised only for one of the purposes for which it was conferred. A ground that appears frequently in court judgments on judicial review proceedings is that a power has been purported to have been used in a way that was not authorised by the legislation giving rise to it. There is a good way to go yet, but I am heartened by the letter that my noble friend Lord Taylor sent to the committee-in appendix 2 to the report-in which he says that he is grateful to the committee for its report and goes on to say that the Government,

I hope that his efforts in that regard will be just as successful as they have been in relation to the appalling Schedule 7 and the equally alarming provisions affecting forestry. I hope he will be able to tell us that there is work still to be done and that he is looking forward to doing it.

Lord Walton of Detchant: My Lords, I feel just a little guilty in speaking to this amendment. On several occasions over the past few years, in debates in your Lordships' House on the health service, I have said openly that I was deeply concerned about the National Health Service and health bodies being subject to control by "an intolerable quangocracy". Hence, when I learnt that the Government were planning a bonfire of the quangos, I felt a minor sense of relief. However, having seen the detail, particularly the provision in Clause 5 that the Minister may modify by order the functions of a body or the holder of an office specified in Schedule 5, I am afraid I still have considerable concerns.

I was greatly relieved when the Minister agreed to remove Schedule 7 a few days ago. Looking at two organisations with which I have a special concern and interest-namely, the Human Fertilisation and Embryology Authority and the Human Tissue Authority-I am deeply concerned. I know full well that these bodies will be the subject of individual amendments, which will be discussed a little later in our debates. However, the principle embodied in Clause 5 is one that causes me considerable anxiety. The Government's proposal that these two bodies should be merged with the Care Quality Commission, for example, carries all kinds of serious concerns and hazards. We may come to that later.

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Lord Taylor of Holbeach: Perhaps I can start by reassuring the noble Lord that we will be able to debate both the Human Fertilisation and Embryology Authority and the Human Tissue Authority later this evening. I thank noble Lords for their contributions to the debate, and the noble Lord, Lord Hunt, for probing several issues through the procedure of whether the clause should stand part. It gives me an opportunity to address those issues, for which I am very grateful. This group of amendments deals with powers in the Bill to transfer functions and the question of public accountability, particularly in relation to data and freedom of information. I accept that it is important to provide reassurance on these issues and thank noble Lords for the opportunity to do so through these amendments.

Clause 5 gives Ministers the power to make provision, by order, to transfer or modify the functions of any body or office listed in Schedule 5. This includes the conferral of new functions, the abolition of functions or changes to the conditions or purpose under which functions are exercised. When we talked about Clauses 3 and 4, I gave examples of such changes, so perhaps I could give the example of the body that we will debate next. The Government intend to use the Bill to transfer the functions of the British Waterways Board to a new mutual body, removing powers from Ministers and giving the users of waterways a far stronger voice in the management and development of the system.

6.30 pm

The Government envisage that the powers contained in Clause 5 will be used to ensure that the right functions are carried out by the right body, creating a more efficient and effective landscape of government. The noble Lord, Lord Hunt, asked what post-legislative scrutiny-if I may use that phrase-of these changes might be carried out. All public bodies will continue to be subject to ongoing regular review. These reviews will be published. I reassure the noble Lord that copies of the reviews will be placed in the Library of the House. Ministers will be accountable to Parliament for government action following reviews and, indeed, for how public bodies conduct their public duties.

The noble Lord will recall that in Monday's Committee sitting I set out the safeguards that would apply to orders made under Clauses 3 and 4, and the important limitation on the scope of these powers which has resulted from the removal of Schedule 7. I assure him that the safeguards in the Bill will apply to orders made under Clause 5. I hope that this provides the reassurance that he seeks. Amendment 118-we will have the opportunity to discuss this at length-provides for consultation and sets out a procedure for enhanced scrutiny of statutory instruments. Perhaps most importantly of all, it provides that a Minister may lay before Parliament an explanatory document in which he is obliged to explain the reasoning behind the changes that he is seeking to effect and to explain why they satisfy certain conditions in the Bill. Transparency is being built into the process to enable proper scrutiny of the Government's proposals.

Amendment 102 is concerned with accountability mechanisms where functions are transferred following an order made under the Bill. The Government's

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public bodies programme is underpinned by the notion that Ministers should be accountable for public functions. For this reason the Government intend to abolish 192 public bodies and in many cases transfer their functions back into sponsor departments. As noble Lords will be aware, government departments and agencies are subject to regular audit through the National Audit Office and are already subject to the requirements of Amendment 102. This Government have also committed to increased transparency in their actions, as evidenced by the publication of detailed Treasury data on public expenditure and by the new departmental structural reform plans. Where public bodies have been retained, and where functions have been transferred from them to other bodies, I can assure the House that they will continue to be subject to the existing requirements on accounting and reporting as well as data protection and freedom of information law. Non-departmental public bodies are required to have in place robust governance and accountability arrangements, and both the Cabinet Office and the Treasury provide detailed guidance on the matter.

I reassure the House that where bodies already subject to the FOI Act are merged to form new bodies established by, and at least partly constituted by, appointments made by government, steps will be taken to ensure that they fall within its scope. Where bodies' functions are transferred to a party already subject to the Act, this will not change. The Government are committed to extending the scope of the Freedom of Information Act to provide greater transparency and have announced their intention to extend it to a range of bodies carrying out functions of a public nature. However, I should point out that amendments to the Freedom of Information (Scotland) Act may be made only by the Scottish Parliament or with the consent of Scottish Ministers. There may be instances where public functions are transferred to an eligible person not subject to an FOI Act, such as a company limited by guarantee or community interest company. In such cases, it will be the responsibility of Ministers to make sure the appropriate safeguards are in place to ensure that the body is properly accountable for its delivery of public functions, and, indeed, the Minister would be accountable for those functions.

All organisations processing personal data are subject to the Data Protection Act 1998. The use of powers under the Bill would not alter this requirement. As regards Amendments 175A and 175B, in the name of the noble Lord, Lord Knight of Weymouth-I am very grateful to him for speaking to these important amendments-I emphasise that the Public Bodies Bill is primarily about the rationalisation of existing public functions, not the creation of new bodies. I appreciate the spirit of the noble Lord's amendments and agree that a power to share personal data should be used with caution.

In limited circumstances there might be legitimate reasons for Ministers to wish to make an explicit power to share personal data in the context of this Bill. To give an example that relates to a public function, Her Majesty's Courts Service has a statutory data-sharing arrangement with the Driver and Vehicle Licensing Agency to facilitate the sharing of personal data where individuals convicted of a motoring offence opt for

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driver training instead of disqualification, and that information is transferred from one body to another. Such powers, which of course would be subject to Parliament's approval, and to the considerations in Clause 8 regarding individual freedoms, are sometimes necessary and can give public bodies and individuals a helpful degree of certainty about how personal data may be shared.

Occasionally, bodies also need to be able to share data in one-off situations. In such circumstances there is normally no explicit provision. I trust the noble Lord will understand that the Government would not be able to accept an amendment that might call into question the ability of bodies to co-operate on important issues relating to security or criminality, for example.

Clause 7 gives Ministers the power to make consequential, supplementary, incidental or transitional changes to public bodies as part of an order under Clauses 1 to 6. I should point out that the Government have no intention whatever of forcing arrangements on voluntary or charitable bodies, which may be partners in these transfers of functions. I think I made that clear in the debate we had the other evening. These are not wide-ranging powers; they exist simply to make the headline legislative reforms-your Lordships' House have debated those reforms and will do so again-work in practice.

For example, the statutory merger of the Pensions Ombudsman and the Ombudsman for the Board of the Pension Protection Fund simply formalises the current arrangements that exist between the two bodies. However, to make this merger work it is essential that existing statutory references to the two bodies are amended to reflect the name of the new merged body. By removing Clause 7, and with it the ability to make this sort of consequential and supplementary provision, the reforms taken forward by orders under Clauses 1 to 6 would be left incomplete. In effect, the legislation would be rendered unusable. In the context of the significant protections and limitations which apply to these powers, I do not believe that the removal of this clause from the Bill, or the addition of the amendments discussed in this group, would be-if I might use the word-a proportionate move. I think that we will come across "proportionate" in later discussions.

However, I might use this opportunity to anticipate the debates on Clause 8, because I have been invited to do so by the noble Baroness, Lady Andrews, my noble and learned friend Lord Mayhew and my noble friend Lady Thomas of Winchester, who is the chairman of the Delegated Powers Committee. I said in my letter-I thank my noble and learned friend Lord Mayhew for mentioning its penultimate paragraph-that we are considering ways in which we may use Clause 8 to define the purposes more tightly in these clauses. I hope that noble Lords will understand that this is work in progress and I would not want to prejudice that by saying anything further at the moment. However, I have used until now my best endeavours to meet the opinions of this Committee, and I hope that I can continue to do that.

I hope that I have been able to provide the assurances that noble Lords seek and I ask that Clause 5 stand part and that the subsequent amendments in the group are not moved.

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Baroness Andrews: My Lords, perhaps I may press the noble Lord on one point. I am very appreciative of what he said in his response about Clause 8, but the example he gave of what the powers would be used for was interesting. The example related to the British Waterways Board's transfer from the public sector to the charitable sector. The list of 14 bodies in Schedule 5 involves very specific uses of powers. Given the mystery-and, frankly, slightly sinister nature-of Clause 5, which we have addressed in different ways, can the Minister publish some sort of schedule that identifies the powers to be used in relation to those bodies? I do not think that that would be onerous, although it would certainly have been onerous if Clause 11 and Schedule 7 had survived. That would go a long way to meeting our concerns. I do not speak on the committee's behalf, but I suspect that such a schedule would help the committee and those who will read and use the legislation-as well as the public bodies listed in the Bill.

Lord Taylor of Holbeach: I thank the noble Baroness for her intervention, because it reflects outside conversations and my discussions with the chairman of the Delegated Powers Committee on this matter. I should emphasise that we have found it possible-and I hope noble Lords will agree that it has been helpful-to produce the A4 briefing sheets that more or less provide a background for the changes we have been discussing. Those briefings have been explicit in describing the framework of the changes-not the detail, only the framework. To include such details in the legislation, given the large number of bodies involved, would lead to an extremely large Bill and would not necessarily be the way to deal with this matter.

We are discussing these bodies in principle in primary legislation because of the way that the debates and this Committee have taken the Bill. We know, because of the exclusion of Schedule 7, that there can no longer be the "stroke of the pen" that the noble Baroness, Lady Andrews, eloquently described when she expressed her anxiety about these issues. We know that that cannot happen and we know what the nature of the changes that will occur under the Bill will be. It is important to emphasise that no Minister can act under the Bill without a period of consultation or without explaining in detail the reasons for the change, its nature and consequences, in the explanatory document that will be provided alongside the statutory instrument that will effect change under any of these schedules. That is an effective way to ensure that Ministers do not act precipitately. If we are to try to meet the concerns of the Delegated Powers and Regulatory Reform Committee, we need to focus less on that than on the wording of Clause 8.

However, I make no promises-and I do not want to make promises-on this matter because it may be that I have stretched my run of good luck too far already. However, I believe that an explanatory document is a much more effective way of answering the Committee's concerns and those of the noble Baroness.

6.45 pm

Lord Goodhart: I should like to add a few words in my capacity as the previous chairman, and a member for several years before that, of the Delegated Powers

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Committee. A strong case has been presented for further action on this matter. The final sentences in paragraph 20 of the committee's latest report state:

"Especially in the absence of a convincing explanation, it is not appropriate for an existing power to make subordinate legislation to be transferable to another, unidentified, body. This renders the powers in clause 5 in relation to these bodies especially inappropriate. The Committee draws the attention of the House to amendment 99A".

Schedule 5 lists a group of bodies that are among the most important to be covered by the Bill. They include the British Waterways Board, the Equality and Human Rights Commission, the Competition Commission, the Human Fertilisation and Embryology Authority, the Human Tissue Authority, the national parks authorities, Ofcom and the Office of Fair Trading. All are organisations of considerable importance. There is a very strong case for the arguments presented by my noble friend Lady Thomas of Winchester, the noble and learned Lord, Lord Mayhew, and the noble Baroness, Lady Andrews. This matter needs further consideration and I hope that my noble friend the Minister will use the period before Report to have a serious look at it.

Lord Hunt of Kings Heath: My Lords, first, I echo my noble friend Lady Andrews in paying tribute to the stewardship of the noble Lord, Lord Taylor. Clearly, he has listened to the House and we have made a great advance. We very much appreciate the briefing sheets from his hard-working officials.

It is good that the noble Lord, Lord Goodhart, has joined in our debates. I do not know whether the Government think the same, but the point that he raised underpins the remarks of his noble friend Lady Thomas, the noble and learned Lord, Lord Mayhew, and my noble friend Lady Andrews. They made pertinent remarks about how the powers in the Bill should be exercised. The noble Lord, Lord Taylor, and his noble friend Lord Henley have given us eminently reasonable explanations as to how Ministers intend to use the powers. The problem is that future Ministers may take a different approach. The noble Lord, Lord Walton, put forward the good example of the HFEA and the HTA.

We are looking for ways to build further reassurances into the Bill. We will have a later debate on what the noble Lord calls the enhanced scrutiny of orders and on my amendment proposing a super-affirmative procedure. That is one approach, but we should also pursue the suggestion of both the noble Baroness, Lady Thomas, and the noble and learned Lord, Lord Mayhew. I am glad to hear that work is in progress on Clause 8. The noble Lord said that he could not give any guarantees, but I encourage him in that direction.

I am glad that the noble Lord also said that reviews of these bodies will take place in future. We on the opposition Benches support that. It is right that these bodies and their functions should be kept under regular review. I was also glad to hear that accountability, reporting and FOI responsibilities will continue if the functions are transferred. However, does that apply only if they are transferred to a public body? What would happen in the case of Consumer Focus, whose functions will be transferred to Citizens Advice? What about the British Waterways Board when it transforms

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itself into a charity? What will happen to the accountability, reporting and FOI requirements?

I take the noble Lord's point about the sparing use of data sharing that is likely to occur under any order arising from the Bill. However, I issue a caution that past experience suggests that this issue is very complex and will demand the careful use of orders. The noble Lord may want to write to me on the issue of non-public bodies in relation to FOI and accountability functions. In the mean time, I am glad that work is in progress.

Clause 5, as amended, agreed.

Schedule 5 : Power to modify or transfer functions: bodies and offices

Amendment 85B not moved.

Amendment 86

Moved by Lord Bradshaw

86: Schedule 5, page 19, line 13, leave out "British Waterways Board."

Lord Bradshaw: My Lords, I move the amendment on behalf of my noble friend Lord Greaves, who is ill. We will wait for the Government's proposals on the British Waterways Board. However, we are particularly concerned about whether a trust such as the National Trust would be able to shoulder the many burdens that will fall on it. Noble Lords who are members of the National Trust will know of the increasing number of appeals that it makes for extra funds to keep its portfolio of properties in good repair. They will also know that the National Trust is being offered more properties that owners cannot maintain. One of our major concerns about the British Waterways Board is that it carries a large burden of maintenance-maintenance of waterways not just as a recreation facility but as a facility for drainage and the conduct of water across parts of the country. There are also a number of public duties that the British Waterways Board undertakes and for which it gets government money. It is difficult to see how a charitable trust will carry out those duties.

I am particularly concerned to bring to your Lordships' notice the fact that a number of waterways administered by the board carry considerable quantities of freight. Obviously, the board does not administer tidal waters, but it looks after the Aire and Calder Navigation, the South Yorkshire Navigation, the River Ouse to Selby and York, the Trent to Newark and Nottingham, the Severn, the Weaver in Chester and the Union Canal and River Lea in London. It has a big portfolio of interests in the freight business. I am not sure whether the charitable trust that the Government have in mind will take over these freight interests. If the trust is concerned mainly with amenity waterways, it will have only a passing and diminished interest in freight. That is important because these waterways convey very heavy freight which, if transferred to the roads, would add greatly to congestion and road damage, visiting more expense on the Government.

When the proposals come forward for the board, we will expect plenty of attention to be given to the financial burdens that it will take over and a reasonable estimate of the amount of money that it will be able to

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raise as a charity from walkers, fishermen, boat users, birdwatchers and whoever else uses the canals. We will also want to know in particular how the Government intend to shoulder the huge burden, which has been underfunded in recent years, of keeping the waterways in good repair. I beg to move.

Baroness Quin: My Lords, I am glad that the noble Lord, Lord Bradshaw, was able to move the amendment in the absence of the noble Lord, Lord Greaves, who takes a great interest in these issues. I welcome the fact that the amendment allows us to ascertain in more detail the Government's intentions on this issue.

The future of British Waterways is very important. In many ways, the idea of a national trust for the waterways is exciting. The previous Government's plans for the future of the waterways were not dissimilar. However, the noble Lord, Lord Bradshaw, was right to raise a number of detailed issues and to seek necessary reassurances about how the system will operate in future and how the wide and varied responsibilities of British Waterways can be assured to a high and satisfactory standard in the interests of us all.

I note that the provisions in the Bill deal with England and Wales. Will there be any alteration, given the recent transfers of responsibility and strengthening of responsibility within the devolution system in Wales? Have there been any discussions with the Welsh Assembly Government on that? I note also that Scotland has opted not to go down the same route as the Government have proposed for England and Wales. Again, given the fact that waterways are an asset to all of us in the UK, I would like to know what discussions there have been with the Scottish Government on this and whether any practical problems were identified in those discussions. The co-operation arrangements between a new English and Welsh organisation and the devolved Administrations are an important aspect, which must be given proper consideration.

A consultation on these arrangements is about to take place, although the Government have already made quite clear their preference for the future of British Waterways. Therefore, what is the main purpose of the consultation? Will it be simply about how the new arrangements will work? If the consultation came up with different proposals for the future of British Waterways, would they be taken into consideration? Our waterways are obviously very important to many of our citizens and to a variety of users, whether they are people involved in boating or whether they are anglers, walkers and cyclists or those who simply enjoy the peace and quiet of many areas administered by British Waterways. I agree with the Government when they talk about the need for local involvement in the way in which the waterways are operated. However, the waterways are also an important national asset and it may be necessary to strike a balance there in the future.

7 pm

I understand that the Government have decided to leave the Environment Agency's navigation responsibilities with that agency rather than transfer them to British Waterways or its successor body. I understand the reasons for that, which I think make sense. At the

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same time, I understand that navigation responsibilities were originally supposed to be part of the consultation process, which has not yet concluded. Therefore, I ask the Minister for clarification on navigation responsibilities and whether the Government are adhering to the decision to keep them with the Environment Agency, at least for the foreseeable future.

I should also like to pick up on the interesting point mentioned by my noble friend Lord Hunt. He asked what will happen to reporting and freedom of information requirements if the organisation becomes a charity. I understand that the noble Lord, Lord Taylor, is considering these issues, so the Minister who is replying to this debate may not be able to give us a reply here and now. However, it would be interesting to have such a reply before Report so that we are able to decide how to pursue this matter in the future.

Our waterways are involved in very varied and responsible work. They need to be kept safe and accessible, in good condition and maintained sustainably. Of course, they are subject to a variety of government legislation on accounting, employment, environmental planning, safety and so on. Those are all important issues to be taken into account and for that reason I very much welcome the chance that the noble Lord, Lord Bradshaw, has given us to debate these issues today.

Lord Greenway: My Lords, I very much echo what the noble Lord, Lord Bradshaw, said in relation to freight carried on some of these inland waterways, as I do the concerns that he mentioned. How exactly will freight fit into a charitable organisation? I am sure that the Government have given this some thought, but we would be grateful if the Minister could give us an indication of how they intend to deal with that.

The Minister will be pleased to hear that the British Marine Federation, which is the representative body of the leisure marine industry, is broadly supportive of the Government's move to transfer the British Waterways Board into the charitable sector. It sees it as a great opportunity to place the running of canals and certain parts of navigable rivers on to a sustainable footing for years to come and to create the right conditions for the continuation of what is a thriving inland marine economy.

The federation's own members-boat operators and marinas-generate some £144 million a year and employ 2,500 people. However, many other businesses, such as pubs, hotels and boatyards, also depend on waterways for their livelihood. It is estimated that for every person directly employed in the inland marina sector an additional 10 jobs are generated from associated services. The overall related tourism spend on inland waterways is estimated to be in excess of the not inconsiderable sum of £1 billion a year. However, there are caveats, one of which is that the BMF thinks that the new body must be a completely new organisation, with a new board representative of those whose interests are concerned, and not simply a rebranding exercise. Navigation must be retained as its primary role.

We have heard concerns regarding funding, which I certainly share. Funding should not simply be sourced from boating and fishing licences. Other stakeholders who derive benefit from these national assets should

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also play their part, possibly even local authorities. I believe that the Government should provide some sort of contract or guarantee to ensure that the waterways are not prejudiced by commercial failure, which of course can happen to a charity. I hope that the Government are looking at that very seriously.

Lord Henley: My Lords, like the noble Lord, Lord Bradshaw, I regret that we have been deprived of the pleasure of having my noble friend Lord Greaves move this amendment this afternoon, but I am very grateful that his noble friend was able to step in and move it, because it is important that the Government set out their case in relation to the waterways.

As the Committee will be aware, the British Waterways Board was originally established under the Transport Act 1962 to operate and maintain much of Britain's waterways network. In passing, I shall mention that we are dealing with England and Wales here; Scotland is another matter. I am not sure that any waterways go across the border, so there are not going to be any concerns there. However, I remember that with the passage of the Scotland Act we had problems with some of the rivers-

Lord Hunt of Kings Heath: Because the boundary moves.

Lord Henley: Indeed, because the boundary moves. If the noble Lord remembers correctly, that legislation allowed the Scottish Government to have an interest in English matters relating to some rivers' tributaries and vice versa. With England and Wales, the case is different. I do not know the answer to the noble Baroness's question about the powers of the Welsh Assembly Government but I shall certainly write to her in due course.

In the intervening years since 1962, the British Waterways Board has done an excellent job in transforming what was a very run-down industrial transportation network, with its roots in the industrial revolution, into a hugely valuable environmental, heritage and leisure asset, but it is one which still-again, I am grateful to the noble Lords, Lord Bradshaw and Lord Greenway, for stressing this-also carries some freight, so it continues to have a commercial operation. Its network consists of some 2,200 miles of historic canals, rivers and docks, and it is visited by some 13 million people a year. Again, as I think noble Lords have made clear, it provides benefits that range from not just freight, which has been mentioned, but flood relief and sanctuary for wildlife, as well as its users, through to employment and recreational facilities for walkers and others.

The intention behind setting up a new waterways charity-and I am grateful to the noble Baroness, Lady Quin, for stressing that the previous Government were thinking of something along very similar lines-is to give waterways users and the communities alongside them greater involvement in how waterways are managed, thus contributing to their sustainability in the longer term. Moving the powers, functions and assets of British Waterways to civil society through the creation of what we would like to think of as a sort of national trust-a phrase used by the noble Lord, Lord

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Bradshaw-for the waterways will allow key stakeholders the opportunity to play a role in their governance and allow them to bring their expertise and passion to the organisation. Providing greater engagement by local communities will, we believe, lead to a range of enhanced public benefits, including green travel to work, health and well-being, support for inner cities and rural regeneration.

As I have mentioned governance, it is worth stressing that the consultation includes proposals for governance on the charitable company model. Subject to the passage of this Bill through Parliament, there will be further consultation on the draft order or orders-I cannot remember whether there is one or more than one-required to transfer the duties and functions of British Waterways to that organisation. However, in relation to the questions that the noble Baroness asked, following on from the speech of her noble friend Lord Hunt in relation to Clause 5, I hope she will await a response from my noble friend which, I am assured by him, will come before we get to Report stage.

There are obvious concerns over funding, particularly in the light of what has been, as we know, a very tight spending review settlement-and I will not say again why it has been so. British Waterways' funding has seen a reduction in line with other bodies that are attached to Defra and to other parts of government. It is no greater because British Waterways is becoming a charity. We recognise, however, that the move to a charity will require a long-term contract for continued government support, and we have given a commitment to maintain levels in line with the spending review until 2022-23. That will obviously be subject to-

Lord Phillips of Sudbury: I am most grateful to my noble friend for giving way. Is the Minister quite sure that the ambition that the Government will have for this new charity can be assumed by it under charity law? Charity law is singularly unsympathetic to external control and direction.

Lord Henley: The noble Lord is somewhat more experienced in charity law than me, and I am going to be very careful when responding so as not to put my foot in it.

We believe that the charitable model-and this is, again, one of the reasons we will be consulting on governance-will be suitable and will operate in the right way. The Government are giving an assurance that they will continue to meet until 2022-23 the funding commitment I was stressing when my noble friend interrupted, and that is a commitment we can make. I very much hope that the charitable body that is created, after the appropriate decisions have been made and after the consultation, will meet the requirements that the noble Lord is addressing.

I hope I have given appropriate assurance to my noble friend. If I have not, I will write in greater detail in due course. I want to emphasise, however, that that spending review commitment is until 2022-23, which I understand is a pretty long time for any Government to commit to, but obviously it is subject to negotiation with the incoming trustees of the body when it is created.

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In order to create a successful new waterways charity for the future, most of British Waterways's existing statutory functions will need to be transferred to that new charity. For example, we would want British Waterways' duty to keep the waterways in good repair to be transferred. That is why we had to list it in Schedule 5. It is a matter I imagine my noble friend will be able to deal with in the letter he has promised.

Having dealt with most of the concerns that have been put by noble Lords, may I just say a little about Amendment 99A that will be formally moved later on? This amendment disapplies the provision in Clause 21(2) to enable the transfer of the statutory functions of British Waterways and the Environment Agency to this new waterways charity.

Clause 21(2) provides an important legislative safeguard to prevent the transfer of functions to commercial companies or privatisation by the back door. This important safeguard, however, also prevents the transfer of the British Waterways and Environment Agency statutory functions and assets to civil society and, hence, the creation of a new waterways charity. This amendment will, therefore, enable the new waterways charity to receive important statutory regulatory functions, such as the power of entry on land to enable the carrying out of works on inland waterways for repair, maintenance, alteration, renewal or protection, that will be required for the safe and effective operation of the waterways. It will also enable the Government to deliver their vision for that national trust from 2015, with the transfer of the Environment Agency's navigation functions into the new waterways charity after the next spending review.

The Government will fully consult on their proposals for the new waterways charity, as I have assured the Committee, over the next few weeks. That consultation will be supported by considerable stakeholder engagement. The Inland Waterways Advisory Council has indicated that it will respond to the consultation before it is wound down.

Finally, could I stress that it is a matter for the Scottish Government that they wish to maintain British Waterways across the border in its current form. One of the advantages of devolution is that different parts of the kingdom can behave differently; that is a matter for them. I reassure the noble Baroness that I will write to her about the Welsh Assembly Government and her concern whether they should or should not have these powers. I do not know whether they were a matter for the referendum that was completed some time ago.

I hope, with those assurances, the noble Lord, Lord Bradshaw, will feel able to withdraw his amendments.

7.15 pm

Lord Bradshaw: My Lords, I thank my noble friend for that comment, and the other noble Lords who have contributed.

I would ask that in the forthcoming consultation paper there is a specific section on freight. The freight business is entirely industrial and heavy; the amount of freight carried on the rest of the waterways is infinitesimal by comparison. The big industrial interests

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using the freight facilities have reservations which they look forward to seeing answered in the consultation document.

Will the Minister also give his attention to the freight facilities grant, applicable both to waterways and railways, which has been discontinued by the Government due to spending constraints but reinstated by the Scottish Government, and give some indication of when this facilities grant may be reinstated?

With that, I have pleasure in withdrawing the amendment.

Amendment 86 withdrawn.

Amendments 87 to 88A not moved.

Amendment 89

Moved by Lord Dubs

89: Schedule 5, page 19, line 16, leave out "Competition Commission."

Lord Dubs: My Lords, the amendments in this group are to do with the Competition Commission and the Office of Fair Trading. These are among the most significant bodies covered in this particular Bill. They are fundamental to both competition policy and to consumer protection.

In passing, perhaps I may say that I regret that the BSkyB matter was not referred to the Competition Commission, but I appreciate that the topic is not one covered directly by this Bill.

I understand the Government want to merge most of the functions of the Competition Commission and the OFT, leaving some to go elsewhere. Clearly, these are matters of enormous concern but I am quite sympathetic to the idea of merging the two bodies. I have always felt there was surplus capacity in the two bodies, and they were not as sharply focused as they might have been in that one referred issues to the other.

It would be interesting to know, however, which of the functions of the two bodies will not be part of the new body. In other words, some of them are going elsewhere. I understand Trading Standards will have to take on some of the responsibilities. It would be useful to know what is in the Government's mind as regards what the new Competition Commission will consist of, and what functions will go elsewhere and why.

This not an occasion on which to go into the details of how the Competition Commission-or, indeed, the OFT-operates, but it is complicated, because the Competition Commission takes references from other bodies, such as the OFT and sectoral regulators. It takes appeals against decisions by sectoral regulators, and matters of public concern may be referred to it by the Minister. So it is a complicated issue and I would like to know what will be the basis for references to the new Competition Commission. Will they be similar to the old ones? They cannot all be the same because the OFT itself refers issues to the Competition Commission. Can the Minister throw more light on that?

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Even if we are to go down the path of merging the two bodies, surely significant lessons must have been learnt from how they operate. We can do things better, a bit differently and more economically, and we should take experience to heart. I think that the Government are going to consult on this, and I would very much like to know the nature of the consultation, how full it will be, how long it will take and what opportunity there will be to make full representations to the Government on what they have in mind.

Having said that, the Competition Commission and the OFT were, I understand, both set up by primary legislation and subject to extensive debate in both Houses. They are significant bodies. I wonder what it is about them that makes them susceptible to the rather truncated procedure under the Bill. I know that that argument has been used about other bodies in the various schedules, but surely it applies with enormous force in the case of the Competition Commission and the OFT. Parliament-I am sure, most Members of this House-would like an opportunity to debate that in full and to be able to move amendments on the proposed new body: to consider the implications, for example, of transferring some functions to local authority trading standards authorities, when they are under severe financial pressure because of the cuts. What will be left of trading standards authorities after the cuts have taken place in local authorities? Will there be sufficient to take on the functions that have come from these two bodies into a local area?

This is an unhappy way to proceed. Even if everybody agrees that the two bodies should be merged-and I would guess that a lot of people would-there is still a need to consider how it will work out in detail. I am unhappy that we are doing something so significant on what is, more or less, the back of an envelope. I beg to move.

Baroness Hayter of Kentish Town: I will raise a couple of issues on the consumer aspects-although there may be no other issues, as that is the purpose of these two bodies. I have three questions on which I seek information from the Minister. First, in transferring enforcement of consumer law to local trading standards bodies, how can trading standards enforce significant breaches of consumer law at national level, such as bank charges or airline practices? My second question regards supercomplaints. Is the Minister satisfied that taking supercomplaints about competition direct to the new merged body-without, therefore, the two-stage process of checking on a case-has been carefully considered before the merger was proposed?

My third question is in respect of those supercomplaints which deal with consumer detriment which arises from particular features of a market. I have in mind for example, the current supercomplaint by Which? on payment method surcharging. It is not clear to me where those sorts of supercomplaints, which come under general consumer protection regulations rather than breaches of law on competition, would be taken under the new architecture.

Lord Young of Norwood Green: I have sympathy with the amendment; I think that it is a probing amendment. I certainly welcome the framework

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document, because I think that it is an attempt to explain what is going on, even if it does not deal with every detail.

The Government state in that document that the challenge in creating a single competition authority will be to help create a framework which is genuinely greater than the sum of its parts-for example, by streamlining procedures and processes to the benefit of those who use or are affected by them. There is doubt about whether that can be achieved. My noble friend Lord Dubs was right when he said that both authorities when they were initiated were the subject of large debate and primary legislation. Is this the right way to deal with them in future? That is a major decision.

I certainly concur with some of the concerns expressed by my noble friend Lady Hayter. Indeed, I was going to ask about the consumer functions that are being transferred. The Government state that the focus is to create a single strong point of information on education and advocacy and that citizens advice services will also take on responsibility for the Consumer Direct helpline. Strong concern has been expressed in the Chamber about the idea that Consumer Focus will be merged with the citizens advice bureaux-mainly because there have been examples around the country of local authorities cutting those services. There is genuine concern about that aspect of the Office of Fair Trading's activities being transferred to the citizens advice bureaux.

The document also mentions consumer credit functions being subject to a separate consultation as part of the HMT proposals for a new consumer protection and markets authority and that any subsequent transfer will be dealt with primarily through separate financial services legislation. It also talks about the possibility of the consumer functions being transferred in advance of the wider merger proposal. That only stresses our anxiety about whether there will be the ability at local authority level to deal with those aspects of consumer protection.

Those are our concerns about the proposals. I hope that the Minister will tackle the questions raised in his response.

Lord Newton of Braintree: My Lords, before my noble friend replies with his characteristic clarity, perhaps I may be a seeker after truth. There has been reference to consultation. I am now left totally confused. I read the briefing note that I took off the e-mail only yesterday in respect of today's proceedings, which contains the following line:

"The Government will consult on its detailed proposals in the new year".

I am aware of the elasticity of seasons in respect of Her Majesty's Government, whoever forms it, but this seems to be getting ridiculous. Are we consulting or are we waiting?

Lord Myners: Will the Minister assure the House that nothing in the proposals made by the Government in respect of these bodies will in any way inhibit the freedom of recommendation of the Independent Commission on Banking? It is widely recognised that one of the key issues in banking is inadequate competition. That is evident in returns on capital and operating margins which most business sectors would die for.

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Banking is characterised by poor customer service, low standards of innovation and very little customer movement from one bank to another-although, on the whole, customers express themselves to be very dissatisfied with the service they receive from their current bank. To put it simply, they do not particularly like their own bank, but they have no confidence that any other bank is any better.

I fully commend the Government's proposals to establish the independent commissioner on banking. Together with the establishment of the Office of Budget Responsibility, they represent novel and important proposals from the Government which should enjoy the full support of the whole House. However, we cannot see the freedom of recommendation in some way enfeebled by the Government denuding the effectiveness of some of the responses which Sir John Vickers and the commissioners might recommend in terms of the process, should they also be seized by the inadequacies of competition in banking for individuals and small businesses in the United Kingdom.

7.30 pm

Lord Taylor of Holbeach: My Lords, the noble Lord, Lord Young of Norwood Green, described the amendment as a probing amendment. In fact, I am in a position to accept one of the amendments so it is rather different from how the noble Lord might have perceived it. This is a concession on the hoof, so to speak. I am grateful to the noble Lord, Lord Myners, for his intervention. I am not an expert on banking. My noble friend Lord De Mauley is and has apparently just written a letter on this very subject which he is going to bring to me so that I can give some authority to the answer. Otherwise I think I would be waffling when I came to tackle the answer-waffling more than usual.

As the Explanatory Notes state, the Government are proposing to merge the competition functions of the Office of Fair Trading and the Competition Commission and are minded to transfer most of the consumer enforcement functions and resources of the Office of Fair Trading to trading standards, and advice, information and education functions and resources to Citizens Advice. Merging the bodies will eliminate duplication of effort in the competition regime, while transferring the consumer functions will improve consumer empowerment and protection by simplifying the bewildering array of overlapping bodies faced by consumers when they have a problem. I can assure the House that our proposals would remove no substantive consumer protections.

A merger between the Office of Fair Trading and the Competition Commission would create a single, powerful competition and markets authority with a dynamic competition culture and more flexible use of competition tools. It would eliminate unnecessary duplication of effort for business, as well as for the authority. It would be able to attract the best competition skills and would create a powerful and unified advocate for competition in the UK and internationally.

Competition enforcement is an important element in the growth and productivity of the economy. While the UK's competition regime already has many strengths,

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the Government believe that it is only right to consider where it can be further strengthened and rationalised in some way.

On the consumer proposals themselves, the transfer of most consumer enforcement functions will target resource where it is most needed-to support trading standards services, which the Government believe are best able to ensure robust enforcement against rogue traders, scams and businesses which abuse the law and their relationship with consumers. The resources that were available to the OFT would be transferred to trading standards. I assure the House that our proposals, on which we will consult, will include a range of options for keeping flexible powers for the new competition and markets authority to use consumer enforcement tools where they are the most appropriate remedy to cure a competition problem.

The transfer of the OFT's advice, education and information functions, including the Consumer Direct helpline, to Citizens Advice and Citizens Advice Scotland, along with the functions of Consumer Focus, would place all these functions in a single organisation well-equipped to represent the consumer. The appropriate resources would accompany this transfer of functions.

The Government believe that trading standards and Citizens Advice provide a first-class service and operate much closer to the public. Transferring functions to them would be wholly consistent with this Government's support for action and decision-making at local level. In particular, devolving key elements of consumer enforcement to a local level would target resource where it is most needed. It would reduce the potential for gaps and empower local authorities to find ways to address all threats which have a combined local and national dimension. Trading standards services already have experience of handling complex cross-authority cases successfully. We need to build on that and develop a body with the right capabilities, resources and prioritisation mechanisms.

Perhaps I may address this whole business of consultation. I think my noble friend Lord Newton of Braintree might have had an outdated briefing because the information on the local briefing makes clear that we are commencing a consultation process fairly soon. In fact, the consultation document may be available shortly, in the next 10 days or so, which means it will probably be available by the time we reach Report. The idea is that the consultation period should be completed within this year. The whole point of consultation is to address the detail of these proposals because it is in the mechanics of making this work that it happens.

We will consult on a model that ensures that money is targeted onwards towards national enforcement priorities, set and co-ordinated by a trading standards policy board made up of chief trading standards officers for England and Wales, with similar arrangements for Scotland. National threats could be addressed on the ground through one or more dedicated expert teams, either following the existing Scambusters model or through lead individual local authorities. The Government's consultation will also address the most economically complex consumer enforcement cases

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and will consider the case for the newly merged competition authority to retain some consumer law powers to supplement its competition work.

Given that the Government's proposal is to merge these bodies, noble Lords may query why they are listed in Schedule 5 to the Bill. I am happy to clarify the matter. At the time of the Bill's introduction, there was a proposal to use Schedule 5 to transfer some functions from these bodies and consequently to use Schedule 7 to move the bodies into Schedule 2, facilitating the proposed merger. Given the removal of Schedule 7, this is no longer possible. I therefore confirm that the Government intend to bring forward an amendment at a later stage of the Bill's passage to move these bodies into Schedule 2 to facilitate the merger.

The Office of Fair Trading will need to remain in Schedule 5, in order to facilitate the transfer of its consumer functions prior to the expected order to merge. Therefore, I cannot accept Amendment 97. However, the Government have concluded that it is no longer necessary to list the Competition Commission in Schedule 5, and on that basis, I am pleased accept Amendment 89 moved by the noble Lord, Lord Dubs.

I have received quite a lot of briefing on a number of issues raised by noble Lords and I will try to go through them. As we approach the dinner hour, I hope that the House will forgive me for doing so, but this is an opportunity to clear up some of these questions. The noble Lord, Lord Dubs, asked about consumer credit. It is subject to a separate consultation. In December, the Treasury and BIS issued a joint consultation on transferring the regulation of consumer credit from the OFT to the new Financial Conduct Authority. He also asked about trading standards resources, which of course will be addressed at the local authority level. But we are aware of the pressures on all services, including local authority trading standards. How local authorities allocate resources according to local priorities is a matter for them, but it is essential that any new money must be targeted on broader projects that respond to a national threat. It must complement work that is already being done rather than be seen as new funding for current projects. Nevertheless, there may be some positive benefits in the form of greater co-ordination and capacity building that would arise from these changes. Specifically as regards the future of the Local Government Group, it is our view that a board of chief trading standards officers, either as a successor to Local Government Regulation's Trading Standards Policy Forum or the Association of Chief Trading Standards Officers, would in practice lead on the co-ordination work.

The noble Baroness, Lady Hayter, asked about economically complex cases. As I mentioned in my main text, trading standards departments have demonstrated their ability and professionalism over many years, and I hope that I have indicated, by the construction of national co-ordination within the trading standards world, that we are looking to build them up in order to be able to tackle the more complex activities that not only have local impacts but are of national significance. It is important that any changes can be addressed. In the same way, the noble Baroness asked about super-complaints. Competition elements

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would be part of the new Competition and Markets Authority, but the consumer, being sure of the issue, would go to the new authority for mixed market analysis. Where it is solely a matter of consumer interests, it would need to be part and parcel of the new co-ordination body within trading standards, as has been suggested.

The Government intend to consult and the proposed consultation will begin soon. No date has been set for the consultation to be concluded, but it is expected to be finished during the course of the year. In reply to the noble Lord, Lord Myners, I am pleased to be able to say that as a result of the question that my noble friend had to answer, the Government's wider financial services agenda, the Independent Commission on Banking, chaired by Sir John Vickers, has been asked to look at the structure of banking in the UK and will consider how to promote financial stability and competition in the industry. This will include examining the complex question of separating investments from other matters. As regards the ICB, the Chancellor of the Exchequer said in the House of Commons on 9 February and my noble friend Lord Sassoon said in this House that the Government will not interfere with its independent remit.

I hope that I have managed to tackle the questions raised in the debate. I am grateful to noble Lords for bringing these issues to the attention of the Committee and I am happy to support Amendment 89, moved by the noble Lord, Lord Dubs.

7.45 pm

Lord Dubs: My Lords, I am grateful to the Minister and I am delighted that he has accepted one of the amendments, although I am not sure that it is because he has accepted the full thrust of the argument. I think that he has done so for a slightly more technical reason, but nevertheless one should take one's victories where one can get them. I am also grateful to my noble friends for the contributions they have made to this debate.

The Minister said that at a later stage the Government would be coming forward with further amendments. I hope that they will be tabled in this House. It would mean that I could say much less now than I would otherwise say if the amendments were not going to be introduced here. Does he know whether they will be brought forward in this House or in the other place?

Lord Taylor of Holbeach: There have been early discussions on this matter and I should like to be able to bring the amendments forward at the Report stage in this House.

Lord Dubs: I am most grateful for that helpful response. There is only one issue that I am not clear about. The present process for referrals to the Competition Commission is quite complicated, and as I indicated, referrals can come from a variety of sources. Will the new Competition and Markets Authority be able to investigate issues on its own initiative or will it depend upon referrals? Will those referrals come from the existing arrangements or will they come from elsewhere? I am not totally clear about this.

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Lord Taylor of Holbeach: I think that I can reassure the noble Lord. The authority will not be entirely dependent on referrals. It will have the capacity, as does the current Competition Commission, to initiate investigations. This will be part and parcel of the consultation, which I hope will make the position clear for the noble Lord.

Lord Dubs: In which case, all I would say is that I still think it is too complicated an issue to be dealt with in this way. I understand that it is not of the Minister's own choosing, but if we had been having a Second Reading debate today on a proposal to merge the two bodies and deal with other consumer protection and competition matters, it would have been much easier for us to handle it. It is not for us to change the Government's approach, but I do regret it. However, I am grateful to the Minister for his response and I commend Amendment 89 to the Committee.

Amendment 89 agreed.

House resumed. Committee to begin again not before 8.48 pm.

Drug Use and Possession: Royal Commission

Question for Short Debate

7.48 pm

Asked by Lord Norton of Louth

Lord Norton of Louth: My Lords, this is an especially appropriate time, or at least an appropriate year, in which to ask this Question. It is 40 years since the UN Single Convention on Narcotic Drugs was promulgated and the Misuse of Drugs Act was passed. Whether I am the most appropriate person to raise the issue is another matter. Other noble Lords taking part in this short debate are far more qualified than I am to speak; I approach as someone totally detached from the subject. I am conscious that, as an academic, this is not my subject, and hence I tread with some trepidation.

However, my background is relevant in two respects. First, as I have said in the House before, I believe strongly that we should have evidence-based policy. I am often appalled at how much legislation is brought forward more on the basis of hope than of evidence. Secondly, I recognise that the best way to affect attitudes and behaviour is through education-I do not just mean formal education-and persuasion. The law alone cannot achieve change, and indeed it can be dangerous to rest on the law in place of education. As a Conservative, I do not believe that the purpose of the law is to send signals. Perhaps it is because I come from a detached position that I am struck by the problems and the contradictions that we now find in our attempts to address the problems generated by drug use. We prohibit

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certain drugs, but we allow people to purchase and consume substances that may be far more dangerous and account for far more deaths each year.

There are two dimensions to the issue: drug use and drug prohibition. There are clearly appalling costs associated with drug use, not only to those who become addicted and their families but to the community. However, there are clear problems with prohibition. If drugs are illegal, the supply is therefore driven underground and supply becomes in the grip of organised and violent crime. What happened with prohibition in the United States, we see now repeated in respect of drugs and on a massive global scale. This has appalling consequences in some countries in terms of loss of life. The Government's Drug Strategy 2010 concedes:

"The UK demand for illicit drugs is contributing directly to bloodshed, corruption and instability in source and transit countries, which we have a shared international responsibility to tackle".

In this country, the problem manifests itself in the crime figures and the sheer amount of police time occupied by combating drug use and supply. The exercise is highly inefficient in that only between 1 per cent and 10 per cent of drugs are believed to be stopped from reaching their target market. Nearly half of all crime is related in some way to drug use and abuse. Heroin and cocaine users are responsible for most burglaries, shoplifting and street prostitution. The economic and social costs are staggering. In the UK, as the Government concede, these costs in respect of class A drugs alone are estimated at more than £15 billion a year. More than half of prison inmates are believed to have serious drugs problems. I am all for incarcerating those who engage in serious crime, but locking up drug addicts generates a vicious, and costly, cycle. To feed their habits, drug users steal, rob and then get locked up, costing the public even more, with recidivism a marked feature once they are released.

My starting point is that there is a demonstrable problem. What, then, do we do about it? A great deal has been written on the subject, though at times we appear to get much more heat than light and a tendency on the part of politicians to wish the problem away. That in itself then becomes part of the problem.

When I knew that I had secured this debate, I invited comments from readers of Lords of the Blog, a collaborative exercise by several Members of your Lordships' House. I received a good number of informed, and sometimes anguished, responses. One comment came from a father who had lost his son to a heroin overdose. He wrote in support of maintaining the present law. His son had been cautioned for cannabis possession, but he and his wife were unaware of this and felt that if their son had been charged then they would have known about it and may have been able to do something to save him. That is a tragic case, but it is clear that the law did not prevent the son taking drugs in the first place.

That is the problem with which we have to wrestle. The law as it stands is not having the intended effect. It may deter some, but it is clearly not preventing a great many people taking drugs, with all the attendant and consequent costs that I have mentioned. The Science and Technology Committee in the other place, in its 2006 report, Drug Classification: Making a Hash of It?,

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found no solid evidence to support the existence of a deterrent effect. I gather also that there is no evidence that the level of classification within the 1971 Act has any effect on consumption.

One solution may be to move towards decriminalisation. The chairman of the Bar Council, Nicholas Green QC, has said that there is a growing body of comparative evidence that decriminalising personal use can have positive consequences. He said:

"It can free up huge amounts of police resources, reduce crime and recidivism and improve public health. All of this can be achieved without any overall increase in drug use".

This year is also the 10th anniversary of the passage of the law in Portugal to depenalise drugs. Drug deaths there decreased as did the prison population, and seizures of large quantities of drugs have increased. Even if we do not go down the road of decriminalisation generally, there may be a case for at least permitting the use of cannabis where there are medical grounds.

That may be the way to go; it may not be. It may be that we should strengthen the existing law or devote more resources to enforcement and to education. Police resources are stretched. Drugs education can and does have an impact but most schools, I understand, choose to provide drugs education once a year or less and all too often develop their own curricula rather than using evidence-based programmes.

My case is that we need to explore whether the present law is necessary and sufficient, whether it is necessary but not sufficient, or whether it is neither necessary nor sufficient. The Government's Drugs Strategy 2010 is silent on the issue. Implicitly, it takes the first of these three positions. There is no critical reflection. Can we improve on the existing law? What are the alternatives? If we are to stick with the existing law, we need to know why and not simply take it as given.

It is these points which motivate this Question. I have put it in terms of a royal commission. Royal commissions have somewhat gone out of fashion, in part because they are seen as time-consuming, cumbersome bodies. They need not be, as the royal commission under my noble friend Lord Wakeham demonstrated. They can enable salient evidence to be placed before an authoritative public tribunal on a transparent basis and the evidence to be weighed.

However, I am not wedded to a royal commission. Another form of inquiry may be equally appropriate or possibly even more so. At the very least, we need to undertake an impact assessment of the 1971 Act. We need a structured means for weighing evidence, not proceeding on the basis of prejudice, with people simply speaking past one another. I would not be averse to a broad-ranging inquiry; drug use, as the Government recognise, can encompass alcohol consumption. There is a case for a holistic examination.

I am delighted that my noble friend Lady Neville-Jones is to reply. She is too intelligent to fall back on crass or knee-jerk responses that we cannot change because it would send out the wrong signals, or that it is an international problem which means that we cannot do much on our own. Such responses would not in any case be relevant, because I am not making the case for change. I am making the case for a proper, thorough and detached review of the evidence.

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7.57 pm

Baroness Walmsley: My Lords, I support the call of the noble Lord, Lord Norton of Louth, for a royal commission on the laws relating to drugs. I would like its remit to be as wide as possible. I agree with him that policy should be evidence-based, as existing drugs policy is an expensive failure and based on ignorance and prejudice. All evidence points to drugs being a health issue. Only bad policy has turned it into a criminal justice issue, a public safety issue and an economic issue.

As a Liberal, I believe that what an intelligent adult chooses to put into his own body should be up to him. However, I cannot imagine why people use drugs when they know the harm that they cause and, of course, we have a duty of care to the young and vulnerable. The matter is therefore no business of government unless, first, users commit crimes in order to feed their habit; secondly, they do harm to other people; thirdly, the market that they create leads to organised crime and violence; and, fourthly, their habit costs the taxpayer money. All those four things are clearly the Government's business. We should address the matter by way of vigorous fact-finding and taking of independent professional advice.

I shall take the above four points in turn. First, I do not believe that possession for personal use should be a crime. However, stealing is, and should remain, a crime. Addicts steal to buy drugs because illegal drugs are expensive. It is a seller's market because many drugs are illegal. If addicts could get legal, safe supplies, their habit would be cheaper and safer for them. Most drug deaths occur because the drugs are cut with other substances or their strength is unknown. There is an incentive for dealers to cut the drugs and make more profit. This is the wrong incentive to have in the system.

Secondly, addicts harm other people as well as themselves. Many of those who abuse alcohol get violent. They get into fights on the street and, when they get home, they abuse their wives and children. Their children are not properly cared for because of the money that the addict spends on alcohol. The same applies to the children of drug addicts. I can also imagine the money spent on cigarettes being better spent on food and clothes for children. Perhaps I may ask the Minister whether the remit for the royal commission could include a section on the effect of drugs of all kinds on the lives of the children of addicts. It always amazes me that when drunks and addicts come into contact with medical services no one thinks to ask whether they have children at home so as to get the social services to look into the effects on them.

Thirdly, the market for drugs is primarily responsible for the gun and knife crime on our streets and the enormous amounts of money that attract organised crime. That is very big business but it filters right down into the heart of our communities, including our schools. Children know where to get drugs, guns and knives. Many of those who carry knives say that they do it to protect themselves. They do not realise that carrying a knife makes them even more likely to suffer injury from one. In order to stop our children wasting

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their lives, we must set up a study to look dispassionately at the facts and international experience and to act on recommendations.

Finally, the cost to the taxpayer of the current bad policy is enormous. At a time when we are trying to pay down the deficit, we must look seriously at this cost and consider how we could get better outcomes for less money. There are wide implications for public policy suitable for consideration by a royal commission. My Government, who were elected with 60 per cent of the vote, should have the confidence to defy the tabloid newspapers. They should get the facts and act on them. We should not be afraid of ignorant, misleading and downright evil tabloid headlines. It is the right thing to do. Please let us do it.

8.01 pm

Baroness Finlay of Llandaff: My Lords, I am grateful to the noble Lord, Lord Norton of Louth, for introducing this important debate. There are two areas of real concern about our current drug laws: first, their enforceability; and, secondly, whether they are capable of achieving the desired goal.

The Misuse of Drugs Act, 40 years old in May, controls more than 600 substances, with more being added at an alarming frequency. Enforcement is becoming increasingly difficult as the remit of this Act expands. Officers are expected to identify controlled substances from a vast and expanding list. Tests are expensive and time-consuming. As the law becomes harder to enforce in full, it risks being brought into disrepute. Control of different psychoactive substances appears increasingly inconsistent. There is increasing public awareness of the harms associated with alcohol and tobacco, resulting in some action now in law, yet the law currently suggests that they are of less concern than the 600-plus substances already controlled under the Misuse of Drugs Act-a list to which about 40 substances a year will probably be added. The law is sometimes said to give a message but, unfortunately, in this area, even if it does give a message, it does not get to those who are at risk and can have the opposite effect to that intended.

The temporary one-year banning powers proposed in the Police Reform and Social Responsibility Bill will come under pressure in response to all newly emerging substances which are seen to have, or are just believed to have, potential harm. With about 40 new psychoactive substances a year, this will not be cost-free. Police time costs money.

Illicit substances have a perverse appeal to young people and fuel criminal trafficking of active and contaminated substances. When a substance becomes illegal, it is cut and diluted and the concentration of the contents is unknown. For example, despite the ban, mephedrone users are still obtaining the drug but with greater risk of overdose and poisoning from contaminants, adding to the NHS costs. Newer, more harmful substances may be replacing mephedrone, so the impact of bans such as that applied to mephedrone needs evaluating. The evidence has to be looked at.

Annually, more than 41,000 people are sentenced for drug possession, of whom 1,200 enter immediate custody, so alternative civil powers, such as trading standards or medicines regulation, warrant consideration.

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These may be just as effective at protecting young people, while avoiding some of the harms associated with a ban under the Misuse of Drugs Act, including stigmatisation impeding recovery programmes.

The UK Drug Policy Commission, of which I declare an interest as a commissioner, will shortly publish a report looking at the issues around the control of new substances. This will highlight the need for a more open debate about drug control and a complete review of our approach towards all psychoactive substances. The debate today is a welcome start to such a process.

8.05 pm

The Earl of Onslow: My Lords, about 10 and a half years ago, two rather interesting things happened to me. First, I was elected a Member of this House. Secondly, on the same day, I went on "Have I Got News for You". The first question that Angus Deayton asked me was, "Oh, Lord Onslow, are you in favour of the legalisation of drugs?". I said, "Yes I am and I will answer this question seriously and not flippantly". I said that drugs seem to me to be the greatest threat to social cohesion that there is. They produce crime and getting out of the vicious circle is impossible. Therefore, we must have a much more sensible policy than the one that we have. All the evidence shows that the present policy fails.

I was delighted when my noble friend Lord Norton stressed the importance of evidence. I continued on the programme by saying that, if the evidence shows that we are failing, why do we go on and on? I continued in that vein for some time. The interesting thing was that the audience-they were not way-out hippies but a respectable cross-section of society who had gone to listen to a flippant and funny programme-all clapped at the end. I think that we overestimate the attitude of what could be classed as the red-top newspapers.

The late Lord Colville, who was such a distinguished Member of this House, said that he reckoned that 75 per cent of the people whom he sentenced to get a slight suntan were involved one way or another with drugs as well as crime, including robbery or whatever. It is easier to get drugs in prison than out of prison. I wonder why.

It is not so much the respectable people who suffer from drugs, even though there are to my certain knowledge Members of your Lordships' House with children who have had drug problems. We have even had-I am not breaking a secret-a distinguished Member of your Lordships' House who was a mainline heroin addict and has admitted to it; he has gone on to make a major contribution to the proceedings of this House. It is obviously possible to get out of the problem into which we are looking. It could be made more difficult: the supplier has an incentive if drugs are illegal, whereas if they are not illegal there is no incentive to push.

I am obviously privileged beyond anything to live in a civilised and pleasant place. I do not live in a tower block where needles are lying about the place. For those people the policy of criminalisation makes their lives so much worse. It is for that that I support the noble Lord, Lord Norton.

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Before I stop speaking, I should like to say one further thing. I have not been well recently and I should like to thank every single Member of your Lordships' House who has come to me with really nice things to say. It has moved me beyond peradventure and I should like to put that on the record.

8.10 pm

Lord Rea: My Lords, the noble Lord, Lord Norton, has chosen a relevant and important topic. We should thank him for securing this short debate. He and all other noble Lords who have spoken are right to point out that the current legal framework controlling drug abuse has been remarkably ineffective and very expensive. Recently, there has been a slight reduction in drug use by young people, but there has been a parallel increase in binge-drinking, with an alarming increase in death from liver disease.

Fashions change in the popularity of mood-altering substances but it has always been a characteristic of human societies to use one or other of them for enjoyment or relaxation. Prohibition merely drives trade in these substances underground and into the hands of criminals. The main problem with current drug legislation has been what was described recently by Antonio Costa, former chief executive of the UN Office on Drugs and Crime, as a raft of "unintended negative consequences". These include a huge criminal market, policy displacement from healthcare to enforcement and geographical displacement-the "balloon effect" of enforcement activity in one area displacing the problem to another. We have a serious drug problem in the UK, but its extent stretches far wider. Illicit drug profits are fuelling crime, corruption and conflict across the globe. The recent spate of violence in Mexico is but one example.

I have been interested in the problem of drug abuse since my days in an inner-city general practice. The social and physical problems caused by excessive consumption of alcohol-a legal substance-were greater than those caused by drugs that are illegal. My strong impression was, as the noble Baroness, Lady Walmsley, has pointed out, that the health problems stemmed more from the fact that the street drugs that were used were adulterated rather than from the effect of the drugs themselves. The four deaths that occurred among my patients were all due to overdose from batches of street drugs that were unexpectedly potent. At the other end of the scale, I had several heroin-dependent patients who received pure pharmaceutical heroin from one of the few doctors still permitted to prescribe it. They were able to carry on responsible jobs and maintain normal households. They were eventually able to end their drug use while receiving careful counselling and medical supervision, but only when they felt ready to do so-a similar approach to that used in the most successful treatment units today.

The purpose of these remarks is to emphasise that most of the substances now listed in Schedule 2 to the 1971 Act, if used in moderate amounts in pure form, while not totally harmless are no more harmful than alcohol and tobacco. Tobacco actually raises mortality even when smoked as intended. The relative harm caused by different agents has of course been the

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subject of recent controversy and a bad-tempered spat between the Home Secretary and Professor David Nutt, the former chairman of the ACMD, resulting in his dismissal. He made the mistake of using a light touch in comparing the dangers of ecstasy with those of horse riding, for which he coined the term "equasy".

To conclude, is a royal commission the right body to review our health policy? It would certainly bring clarity to a controversial area, but the Government would not necessarily be bound to follow its recommendations, resulting in the issue being in effect kicked into touch. I recommend the use, as the noble Lord mentioned, of impact assessments, as recommended by the committee of the noble Baroness, Lady Finlay, the UK Drug Policy Commission. The advantage of this method is not only that the Government are more likely to follow and take seriously the recommendations, being part of the process, but that it has flexibility, enabling it to be applied internationally as well as nationally.

8.15 pm

Baroness Meacher: My Lords, I applaud the noble Lord, Lord Norton, for initiating this debate. The case for a review of the Misuse of Drugs Act 1971 is of course overwhelming. No one today would seriously argue that the possession of cannabis should be punished with a maximum penalty of two years or an unlimited fine, as in the Act. Likewise, surely no one would argue that seven years in prison should be on the statute book at all as a possible response to the possession of a few ecstasy tablets.

It is important for us to be clear about the meaning of success in the drugs field these days. The big change in the last 40 years has been the universal recognition that the call for a drug-free world was nothing but a pipe dream. The key question is what policies will minimise the level of drug addiction and of personal and societal harm. I applaud the Government's emphasis on recovery, but that policy would be vastly more effective if it were introduced alongside the decriminalisation of drug users.

Many countries have introduced health-oriented approaches alongside decriminalisation, with positive results. The Portuguese policy, as already mentioned, of decriminalising the possession of up to 10 days' supply of all drugs, linked to active treatment, has astonished the faint-hearted. Far from leading to a drugs tourist industry-which was well predicted-and soaring levels of drug addiction, the policy is recognised internationally to have been a resounding success. In many ways, the most important finding is that for young people-13 to 15 year-olds and 16 to 18 year-olds-the prevalence rates have declined in Portugal for virtually every substance since decriminalisation. This is the more remarkable because it goes against the trend of the surrounding countries that still have tough criminalising drug laws.

Of course, Portugal is not the only country that has moved away from criminalisation. Spain, Switzerland, the Netherlands, the Czech Republic, 13 states in the US and many other countries have liberalised drug policies in a range of ways. In no case have these liberal policies led to a general increase in drug use,

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more crime or more harm to individuals-quite the opposite. As the noble Lord, Lord Norton, said, we need evidence. Actually, we have it and lots of it. The Czech Republic is particularly interesting. It introduced criminalisation in 1999, undertook a detailed scientific study which showed that criminalisation had been a disaster, and in 2010 reversed the policy and decriminalised drug use. Even the United Nations Office on Drugs and Crime concluded in a recent document that,

Surely our Government needs to take account of the UNODC.

We do not impose criminal penalties on patients suffering with cancer or heart disease. Of course, it is self-evident that such a response would be not only unethical but also counterproductive. Exactly the same arguments apply to drug addiction-punishment is unethical and counterproductive. The new All-Party Parliamentary Group on Drug Policy Reform, which I chair, together with the Beckley Foundation, supports further research on drug policies and the drafting of a new UN convention permitting-not asking-countries to introduce more liberal drug policies.

We are now 50 years on from the single convention of 1961, when it was hoped that drugs could be eliminated through tough, criminalising policies. These policies have failed. A royal commission lasting I hope no more than 12 months would be sufficient to pull together the evidence. If this were followed by sensible drug policy reform, it would do more to generate a safer world, reduce conflict and weaken al-Qaeda and criminal gangs across the world than any other initiative I can think of. The case for change has been made. I hope the Minister will be able to respond positively.

8.19 pm

Lord Taverne: My Lords, all the speeches so far have made an overwhelming case for a really authoritative, weighty inquiry into the whole question of drug use. The first question is: should possession of drugs be a crime? When I was a Minister in the Home Office in that glorious period between 1966 and 1968, when Roy Jenkins was Home Secretary, possession of drugs was not actually a crime. Heroin addicts could get a GP's prescription for uncontaminated heroin and they were much more likely to go for treatment. Of course, circumstances were very different, but it is notable that at that stage drug addiction was much less of a problem than it is now.

Is the criminal law the right instrument for dealing with drug abuse? The experience of Portugal, the Netherlands and a number of other places shows that education and rehabilitation are a far more profitable route. Why do the Government not recognise the reality that the war on drugs is not being won and never will be won? If you are losing a war-or certainly not winning it-at enormous cost, is it not time to look at the whole question again?

There is the further question of the reclassification of drugs. As the noble Baroness, Lady Meacher, has just said, it is absurd to have ecstasy put in the same category as hard drugs of other kinds, and the reclassification of cannabis has no scientific evidence behind it.

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When it comes to alcohol, it is high time for us to consider what could be a much more effective approach. The recent inquiry by the independent committee on drug use showed, in a very systematic analysis, that alcohol was by miles the most harmful drug being sold at present. At the moment it is less directly harmful to the individual, but even that may change. On present trends, many people forecast that liver disease will soon be a bigger killer than heart disease.

The present policy is not based on scientific evidence. It is true that scientific evidence is not necessarily conclusive. However, if the policy is not based on scientific evidence, reasons should be given why it is not and it should be based on some other evidence. All these are eminently matters for a royal commission. The Government should recognise, if they make any pretence of having policy based on evidence, that the present way in which they approach drugs is not.

8.22 pm

Lord Cobbold: My Lords, I rise to support the question proposed by the noble Lord, Lord Norton. It is high time that the drugs problem was subjected to an unbiased investigation. Prohibition has manifestly failed, a fact that even the United Nations ODC has recently acknowledged. To me it seems illogical to treat drugs differently from alcohol. It amazes me that democratic Governments can tolerate the global drugs market being totally in the hands of criminals.

Drug usage should be a health issue, not a criminal justice issue. Our prisons are overcrowded. Drug prisoners are frequent reoffenders because many of them have nowhere else to go and they are well looked after in prison. The drugs trade costs our country an enormous amount of money-unlike alcohol, which is licensed and taxed. The savings could finance further treatment and rehabilitation centres, as well as help to reduce the national deficit.

I strongly support the efforts being made by the noble Baroness, Lady Meacher, to bring together people from other countries that have taken a more sensible attitude towards drug laws to try to see whether a common process can be developed. This is a significant problem and it is extremely important that something should be done in the not-too-distant future.

8.24 pm

Baroness Murphy: My Lords, I am tempted to say that I agree with everybody else and just sit down, but I have four minutes and I am going to make the best of them.

I add my thanks to the noble Lord, Lord Norton of Louth, for this opportunity to press for a serious review of drug misuse policy. I am not usually supportive of royal commissions because they tend to kick matters into the long grass. However, we are already in the long grass on this matter. We are saddled with a policy that we all agree has largely failed. Small bits of it may have been successful, but it has largely failed. We are rather frightened to focus on the alternative harm reduction policies for reasons that we have amply aired.

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On the question of evidence-based policy and the research to support it, although we have plenty of evidence about the failure of current policies, I fear that we have surprisingly little evidence on which a royal commission could base its positive recommendations for future policies. As an academic, I am always pressing people to say, "Stop calling for more research and just get on with what we know". However, there is an extraordinary lack of social research. After all, drug use is a social activity with social impacts.

To my mind, it is strange what large and fundamental gaps remain in our understanding. For example, we have not tackled the dramatic changes in cannabis use that have occurred over the past 20 years and we know very little about enforcement of the drug laws. Following the second reclassification of cannabis back to a class B drug, there is a pressing need to evaluate how this change is impacting on policing, for example. We lack a good understanding of the routes both into and out of problematic drug use and the long-term impact of drug use on families. For example, social workers are making difficult decisions every day about the placement of children and are placing them back with families in which there is profound drug addiction, yet the evidence that they have on which to make those decisions is very poor indeed. I could mention many other pressing topics. This is merely a short list of examples of the gaps in research.

Until recently, neither the Economic and Social Research Council nor the Medical Research Council had funded major programmes of work in this area, although in the charitable sector the Joseph Rowntree Foundation has published some admirable research with modest funding. The majority of government money devoted to drug research has been spent on usage surveys, monitoring and evaluation-quite properly, since that is the Government's job-rather than on exploratory research designed to fill the gaps.

There have been positive developments. Early in 2009, the MRC launched its addiction and substance misuse research strategy and it has now launched a new programme. However, the ESRC seems to have spent a total of just £3,000 in the last year and has given no grants either in programme grants or responsive mode funding. I think that that is extraordinary for one of the major problems that society has developed over the last 40 years.

The major research centres are mostly focused in clinical or epidemiological centres. Senior academics are from medical disciplines. I do not want to detract from the importance of this work, but I think that we have to get the balance of government research funding right. It is not heartening for researchers to know that, if they get good evidence, it will not be implemented. We have already had some evidence of that.

Finally, drugs are a highly emotive topic, which generates hyperbole, controversy and political vacillation, but it is crucial that we invest in proper social research to advise any independent inquiry on the way forward. Will the Minister say what plans the Government have to invest in the social scientific research that we need to take forward evidence-based policies?

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8.28 pm

Lord Stevenson of Balmacara: My Lords, I congratulate the noble Lord, Lord Norton of Louth, on securing this excellent debate. When he introduced it, he said that he was not an expert. I am left with the feeling that I would hate to hear him on his own topics, but of course we hear him on them regularly and we are all the better for that. It was also interesting to hear his blog responses, which informed what he said. I think that they added a touch of absolute certainty about what is happening out there in the real world, which was very useful to hear.

I am sure that I speak for the whole House when I say how pleased we are to see the noble Earl, Lord Onslow, in his place. I thank him for his interesting anecdote about "Have I Got News For You". I must watch that. I had not realised that the noble Earl had been a star of the small screen. It also shows, from what he said, that the public are well ahead of us in some of the things that we think about in this debate.

As the noble Baroness, Lady Finlay, reminded us, the Misuse of Drugs Act 1971 now controls over 600 or so so-called psychoactive substances, of which there seem to be about 40 discovered each year. We have too many regimes and approaches. Alcohol and tobacco are regulated separately, largely through trading standards legislation, while solvents and solvent abuse are regulated through the Intoxicating Substances (Supply) Act 1985. As a number of noble Lords have said, there is no evidence that the level of classification within the Act has any effect on consumption. When cannabis was reclassified downward to class C and then back up again to class B, there was no discernible change in the already downward trend in use.

Penalties for drug possession have a considerable impact on the criminal justice system. Two years ago, over 41,000 people were sentenced for drug possession offences, including over 1,200 people sentenced to immediate custody. Drug use and its associated problems have real and considerable implications for the justice, prison, education, health and mental health systems and, of course, for victims and families and generally for society.

As the noble Lord, Lord Cobbold, said, there is a good case for drugs policy being transferred to health and taken away from the Home Office. The Misuse of Drugs Act is now 40 years old and, arguably, ripe for review. The noble Lord, Lord Taverne, gave us an interesting insight into policy as it must have been around the time when the Act was passed. That gives us a chance to argue that a review is required. If the Act is going to be reviewed, there is a list of issues that need to be addressed, including enforceability, which is becoming more and more difficult and bringing the law into disrepute; inconsistency in our approach to controlling illicit and licit psychoactive substances; technology and the fact that new drugs are being developed all the time; criminality, with the huge and growing criminal black market and the associated violence that it brings; and collateral damage, in the sense that drugs and drug use have a significant and growing impact on our education, health and prison systems.

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As the noble Baroness, Lady Finlay, said-and it was a good phrase-we have also to think about the perverse appeal that drugs have for young people. All our evidence is that the educational process at the moment is not effective. As the noble Lord, Lord Norton, said, we have a problem. The issue of decriminalisation has been raised. There is good evidence from other parts of the world that it can have an effect. As my noble friend Lord Rea said when he spoke about his experiences of general practice, there is in some sense a form of decriminalisation effected when people are able to prescribe directly and get around the laws. We obviously need to tackle that, as well.

As the noble Baroness, Lady Meacher, said, a balanced debate is needed-one that considers the impact of prohibition and the potential benefits as well as harms from use and abuse of psychoactive substances. We have to think about the costs involved in this process. This debate could then feed into a complete review of our approach to drug control, with the aim of producing a single, coherent, overarching framework for regulating all psychoactive substances.

If there is a case for a complete review, should it be done by a royal commission? There are those who feel that a royal commission just means a whole lot of people with letters after their names taking several years and spending a lot of public money just to tell us what we already know-so maybe not a royal commission. Should it be done by Parliament? One problem is that our political and legislative systems contain what has been described as a fundamental bias in favour of the prohibition of drugs. It has been persuasively argued that politicians find it very hard to deal with these social issues in any case. Even so, there is a case for this matter to be referred to Parliament, possibly through a Joint Committee of the two Houses and subsequent pre-legislative scrutiny. The Government are presumably nearing the end of their drug strategy consultation. Perhaps the Minister can shed some light on progress with this and, in so doing, indicate which of these options-royal commission or Parliament-she favours. As the noble Baroness, Lady Murphy, said, we are already in the long grass, so let us not leave ourselves there for much longer. Judging from the evidence that we have heard tonight, something clearly has to happen soon.

8.33 pm

The Minister of State, Home Office (Baroness Neville-Jones): My Lords, I thank my noble friend Lord Norton for the thoughtful way in which he introduced this debate on a subject of very considerable public import that, precisely because of the harms associated with it, excites very considerable strength of feeling and, I have to say, disagreement. There is a broad consensus on some of the damage that it does; where those who are informed as well as those who are uninformed part company with each other is on what we do about it.

I would like to respond to the points raised and set out the Government's thinking as it has developed on the drug strategy. Between us and those advocating decriminalisation, which I have to tell noble Lords the Government are not going to engage in, there is common

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ground on some of the things that we consider need to accompany a policy that continues to classify drugs and criminalise the taking of them. Do we believe in an evidence-based policy? Most certainly. Do we think that the law can do it all by itself? Certainly not. We certainly think that both education and treatment need to be integral parts of policy. Do drugs contribute to global crime at all levels, violent as well as organised? Yes, absolutely they do. Do we need therefore to take action? Clearly, we do.

The example of Portugal has been mentioned, and I shall come to that in a moment, because the conclusions that you draw from the evidence in front of you is going to influence what you say about what should happen next. The picture that emerges from Portugal is somewhat more complex than some noble Lords have allowed.

Let me say something about how the Government's thinking is developing and then I shall return in the light of that to some of the comments that have been made. As the House will be aware, in December last year the Government launched their new drugs strategy, whose component parts include: reducing demand; restricting supply; building recovery; and supporting people to live a drug-free life. The supporting part is very important.

The strategy has two high-level ambitions, one of which is to reduce illicit and other harmful drug use. I might say that we do take a dim view of alcohol abuse, which we also believe needs to be tackled. Some of the treatments that accompany that are much like those for the abuse of drugs. It is for the reason that alcohol abuse is certainly going up that we are clamping down on below-cost sales of alcohol and restricting their sale to young people, and so on. We do think that that needs tackling-so there is nothing between us on the subject of the evils of alcohol abuse. However, we do not believe that because alcohol abuse is going up, that is somehow reason for not being tough about drugs as well.

Our second ambition is to increase the number of individuals who are able to recover from their dependency on drugs or alcohol. In delivering these ambitions for the next four years, we are committed to an evidence-based approach, and we will undertake evaluation of the policy as we go along. We are not suggesting that we will pursue this policy irrespective of what the evidence shows that its results might be. I assure and promise noble Lords that constant evaluation will be an integral part of the approach that we pursue, and we will take into account the wider evidence available. I have to say to the noble Baroness, Lady Murphy, that I have asked whether we have any social research on the stocks at the moment. I fear that the answer is no, and I think that is something that we should take away.

High-quality advice on this complex field is obviously of the utmost importance. We value greatly the work of the Advisory Council on the Misuse of Drugs, and the proper consideration of its advice is at the heart of enabling us to deliver this strategy. We are developing with it an evaluation framework to assess the effectiveness and value for money of the drugs strategy. We will redo that on annual basis and from that annual review we will then develop further initiatives and actions as

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the programme develops. That I hope will give us the necessary flexibility to respond to changes in the drugs scene and the nature of the trade and based on the outcomes that we are managing to achieve.

The Government are also ensuring that our policies complement each other and build the necessary links between the strategy itself and sentencing, welfare and public health reforms so that we optimise the outcomes and the cost-effectiveness of individual policies.

A number of noble Lords have mentioned the whole question of impact assessment. I have some sympathy with this notion. It is very hard, however, to know what you are measuring. One reason is that it is extremely difficult to disaggregate the interaction of various phenomena. Two honest people can measure an impact and come out with a different answer. I hope the House would agree that we have to tackle the complexity of the interaction of various factors. I hope if we are able to do that it will give us a better clue as to how to proceed.

I suppose I need to say at this point that, although we are going to go through evaluation, we do not intend to go for a thoroughgoing review. We do not consider that that is warranted. What we want to do is to give the strategy that we are outlining, which contains new components of policy, a good try to see what it delivers. We are not a Government who will take no notice of the results of policy, but we certainly think that the case at the moment is made for proceeding with the policy on the basis of constant review.

As I said, we have decided that we are not going to decriminalise, but we are going to deal with a lot of the features of the scene. The four decades of the Misuse of Drugs Act have provided the UK with a coherent legislative framework. Although some noble Lords seemed to think that we could somehow duck our international obligations, we do not believe that is actually the case. We have to engage in policies which restrict the availability of drugs and their misuse and which protect public health and welfare. We will continue to try to do that.

We will engage in a number of positive features in our policy-I think it is important to do that-but before I come to that issue I want to say something about the relationship between the level of crime and drug use. The findings from the British Crime Survey 2009-10 show that drug use among young people in the 16 to 24 age group has fallen to 20 per cent, from 29.7 per cent when the survey began. That is quite a significant drop. The latest figures from the NHS Information Centre's annual survey of drug misuse in England, which was published earlier this year, confirmed the downward trend of the past few years. That is why I mentioned the complexity of interaction. That is an encouraging phenomenon and we would like to know exactly why that is happening.

We want to empower young people to steer clear from drugs rather than encourage their consumption. In due course we shall be debating the Government's proposals in the Police Reform and Social Responsibility Bill for the introduction of temporary banning measures, which was mentioned by a number of noble Lords. We believe that it is right and proper to have measures in place to be able to ban such substances. The experience

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of methadrone convinces us it is the right thing to have done. The ban had an impact on attitudes-consumption went down. We are certainly not of the view that it is wise to give the impression that, because a drug is legal, it is therefore safe. Indeed, some of those drugs are extremely damaging.

As part of reducing the demand strand of the drug strategy, we want to help people resist the pressures to take drugs and the encouragement that may come in their lifestyles and we want to make it easier for those who have taken drugs to stop. This is key to reducing the huge cost to society. We will focus in our strategy on early years prevention, particularly for families who have complex needs, and we will provide high-quality drug and alcohol education and information to young families and parents through schools, colleges, universities and the Frank service. Education was stressed by a number of noble Lords. We certainly intend to lay a lot of emphasis on that. We will provide intensive support to vulnerable young people to stop them becoming involved in drug and alcohol misuse.

We also wish to give discretion to the police on whether to prosecute in given circumstances and to the judiciary to take into account all the circumstances of an offence. In practice, the law enforcement element is one that we wish to see used judiciously. It is fair to say that some of the results in Portugal, where it has been said that legalisation has taken place, do the opposite in that they put people into treatment, which is what we want to see happen here. However, some of the picture in Portugal is not so good. It is the country in Europe, I think, that has the second highest level of HIV. There are relationships between these various phenomena.

Very few custodial sentences are imposed for simple possession offences and a fine is the most commonly imposed conviction.

Baroness Meacher: Before the Minister sits down, will she explain why she will not have a review of the Misuse of Drugs Act 1971? It has obviously now been in place for 40 years. Whatever may be said about Portugal, the reality is it had a very high level of HIV before decriminalisation and now has a very good record. Most importantly, young people there are now less and less likely to go into drug addiction. In view of this evidence, will the Minister explain to the House why the Government will not even look at and evaluate, whether through an impact assessment or a royal commission, their own policies? We have very high levels of drug use in this country, and we are not doing well.

Earl Attlee: My Lords, I am afraid that we are out of time.

Baroness Neville-Jones: The noble Baroness is doing us a slight injustice. I did not say that we would not look at anything; I said that we were going to base our current policy on constant evaluation. We understand that we need to look at how successful our policy is being. We do not believe, on the basis of the strategy that we wish to pursue, which has new elements to it, that the moment has come for a thoroughgoing review, but we are going to continue to evaluate the effects of our policy. I hope that that will convince noble Lords that we are not going into this absolutely blindly.

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I would like to say one or two other things, but I must conclude. The Government will put resources, energy and ambition into pursuing a policy that we are endeavouring to make broader in its scope and more effective in its outcomes.

Public Bodies Bill [HL]

Main Bill Page

Committee (9th Day) (Continued)

8.49 pm

Amendments 90 and 91 not moved.

Amendment 92

Moved by Baroness Thornton

92: Schedule 5, page 19, line 19, leave out "Human Fertilisation and Embryology Authority."

Baroness Thornton: My Lords, I shall speak also to Amendments 93, 150 and 151. On Second Reading, many noble Lords expressed their disquiet at the inclusion in the Bill of the HFEA and the HTA. At the time, I wondered if they were included because the Minister's department insisted that the Department of Health had to offer something up to the Bill, so the poor old HFEA and HTA were the sacrificial lambs. Indeed, in its own review of the arm's-length bodies, the Department of Health gives a much more measured suggestion of the deliberation and consultation before decisions were taken about the HFEA and HTA over a timescale that is the life of this Parliament. Unless something has changed about the expected length of this Parliament, it seems precipitate and unnecessary to include these bodies in the Bill.

In a meeting convened by the Minister-the noble Earl, Lord Howe-to discuss this important matter with interested parties, which I was pleased to attend, he was concerned to reassure us about the consultation and discussion to take place before decisions were reached. We can add to those reassurances the proposal, as I understand it, that in the next Session-in other words, after May 2012-primary legislation will be introduced to establish a new science regulator in the department. If that is the case, the passage of that legislation would allow proper consultation and scrutiny across the field including the work of the HFEA and the HTA, which is the way in which such reforms should be carried out. So I ask again: why is it necessary for these bodies to be included in the Bill?

The HFEA and the HTA almost symbolise the concerns that noble Lords have expressed in relation to the constitutional propriety of the Bill in giving Ministers powers to amend primary legislation. Both organisations would have their work and their regulation fragmented unnecessarily when they need to be left alone to get on with the jobs that they do very well-although there is always room for improvement-until a proper period of consultation and pre-legislative scrutiny, which I am sure the noble Earl would wish to have, can precede the introduction of the science regulator Bill or whatever it will be called. That is the way to proceed.

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What do these bodies do? The HTA licenses and inspects organisations that store and use human tissue for purposes such as research, patient treatment and post-mortem examination, teaching and public exhibitions. It also gives approval for organ and bone marrow donations from living people, including anatomy and stem cells and cord blood; public display-that is, the public display of any human body parts in various forms-post mortems; coroners; and transplants.

The advances made by science throw up new and sometimes complex ethical issues for the HTA to address. The cavalier use of body parts for research without the knowledge or consent of patients and their families was a huge scandal, leading to public indignation. Many in your Lordships' House will recall the time and the thought given to the creation of a regulatory framework that would command public confidence. I fail to see what has changed that can allow any slackening off of the responsibility that the HTA bears for the use of human tissue.

The HFEA is the UK's independent regulator of treatment using eggs and sperm and of treatment and research involving human embryos. It sets standards for and issues licences to centres and provides authoritative information for the public, particularly for people seeking treatment, donor-conceived people and donors. Very importantly, it also determined a policy framework for fertility issues which are sometimes ethically and clinically complex. The HFEA Act 2008 includes provisions for research on different types of embryos and changes the definition of legal parenthood for cases involving assisted reproduction. Therefore, the work of both bodies is of enormous scientific importance apart from anything else.

The arm's-length body review in July 2010 concluded that the HFEA carries out essential functions which satisfy,

The review states that the HFEA,

The HFEA is a world-respected model which has been used by other jurisdictions to deal with extremely technical and legally complex areas of practice. We have to ask what will happen to the high level of expertise and experience in both organisations and whether it will be in the public interest to transfer regulatory functions to other organisations where this knowledge may be lost to the detriment of patient safety.

I know that some noble Lords, particularly some of our very respected medics, for sometimes differing reasons have expressed the view that time has moved on since the original reason was established for setting up these bodies, human fertilisation is not the novelty that it once was, these medical procedures no longer need the attention of their own regulator and therefore change is necessary. That is a powerful argument but I disagree with it, or at least I have yet to be convinced. It seems to me that the powerful reasons that brought these two bodies into existence, and the reason we in Parliament paid such close attention to establishing their duties, responsibilities and independence, are still as potent today as they were when they were founded.

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These are not primarily medical or scientific reasons but concern the need to maintain public confidence in the uses to which human tissue is put, and sometimes in the very controversial issues arising out of human fertility and procreation.

Time and consideration need to be given to the contribution to scientific research made by the HTA and the HFEA, and, of course, they should carry out their respective functions in a cost-effective and efficient manner with appropriate public accountability. We may wish to see change in the way that the HTA and the HFEA functions are carried out but I believe many of the changes needed could be achieved without their inclusion in the Bill. Change should be helpful in achieving the broader stated aims of reducing bureaucracy and saving money rather than simply focusing on a reduction in the number of arm's-length bodies. By and large, by the way, I believe that both bodies have sought to make and have succeeded in making improvements in their work and functions in recent times. I believe that more now even than at Second Reading, given the Government's proposals on research. As the proposals for the reorganisation of the NHS are discussed it seems to me that the future of the HTA and the HFEA need more time and much more consideration. Apart from anything else, the CQC, which it is proposed should become the healthcare regulator for the HTA and fertility treatment, will have neither the time nor the expertise to carry out this function until it has swallowed the regulation of the whole of the rest of medical and social care. One might imagine that if a scandal arises in four or five years' time regarding either fertility regulation or the use of human tissues, the excuse will be given that the CQC was too preoccupied with the rest of its enormous brief to give these matters the important attention that they warrant. I beg to move.

Lord Warner: My Lords, I have added my name to Amendments 92 and 93 in part in a spirit of helpfulness-I hope that is the case-to the Minister as I have traversed the same ground as him on Department of Health arm's-length bodies. In 2003-04, I was the Minister who reviewed DH arm's-length bodies and halved their number. Therefore, I cannot claim to be against reducing the number of Department of Health arm's-length bodies. Indeed, my sins are fully catalogued by this Government in annexe B of their document on the arm's-length body review, which was published last year. Therefore, I own up fully to these past misdemeanours. However, as I have previously said about the Government's own arm's-length body review, although I do not necessarily agree with every aspect of it, it comprises a serious, comprehensive, clear and coherent set of proposals, unlike some of the things which emerged from other departments under this Bill. Therefore, I do not in any way wish to argue that it was not a thorough piece of work.

9 pm

I must confess also to proposing in my review a merger of the HFEA and the Human Tissue Authority into what we then called a regulatory authority for fertility and tissue. I still think that that has some

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attractions and do not necessarily think that we got that wrong. However, I recommended to John Reid-then Health Secretary and now the noble Lord, Lord Reid-that we abandon that merger idea because it seemed that the aggro involved in achieving it was disproportionate to the gains that we would achieve. This House was very active in persuading us to change our minds, and I recall that the Lord Speaker was a vigorous opponent of that change in her then role as chair of the HTA.

However, the coalition Government have been rather more ambitious and, if I may say so, a bit less savvy in suggesting a kind of dicing and slicing of the functions of the two bodies between the CQC, the MHRA, the NHS Information Centre and a new health research regulator. I admire the courage and ambition of the noble Earl on this issue, but I fear that he may have overreached himself. However, I totally support his and the Government's idea of a new health research regulator to bring some better order into ethical approvals, the EU clinical trials directive and data protection. Speeding up approvals of health research and clinical trials is important for patient benefit and UK plc. I spent a lot of my time as a Minister trying to speed up these systems, and the Government are to be congratulated on having another and probably more successful go.

Here I must declare another interest. The Government asked the Academy of Medical Sciences to look at the idea of a single health research regulator, and the academy's report in response is on its website. I was a member of the academy's external review group that commented on the draft report. If one looks at the final version of that report-I draw the Minister's and the House's attention to page 89 in particular-one will see no mention of bringing the functions of the HFEA or the HTA into the new health research agency recommended by the academy. My reading of the report is that the case for the new health research agency seems not to be dependent on taking into it functions from the HFEA and the HTA, as distinct from the other six or seven bodies mentioned by the academy in its report. The Minister may want to clarify that issue.

Finally, perhaps I may deal with the transfer of licensing functions from the HTA and the HFEA to the CQC, which my noble friend mentioned. The Government have proposed in their arm's-length body review document that this should happen. However, the role of the CQC will become even more onerous under its new remit arising from the Government's health and social care reforms. I make no criticism of that extended role, but the CQC will have a lot on its plate over the next few years. I ask the Government to consider whether it really makes a lot of sense to transfer even more functions to the CQC from two well established licensing systems run by the HFEA and the HTA. I do not doubt that there are efficiencies to be gained in both organisations. My advice to the Minister, for what it is worth, would be to require those two bodies to reduce their back-office costs by reducing their budgets and the sharing of back-office services, and have an independent look at their licensing processes to see if they can be streamlined.

However, the brands of these two bodies are very strong among the public and in a lot of other areas, and they have many powerful supporters. I can still

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remember the parents of Alder Hey children keeping a very beady eye on me as I took the Human Tissue Bill, which set up the HTA, through your Lordships' House in 2004. These two bodies handle very sensitive issues and they are not necessarily essential for setting up a new health research regulator. I would leave them alone, apart from securing some efficiency gains. That is why I support the amendment.

Lord Willis of Knaresborough: My Lords, I added my name to Amendments 92 and 93. I congratulate the noble Baroness, Lady Thornton, on presenting a reasoned case for both amendments. I also congratulate the noble Lord, Lord Warner, on being able as a Minister to say that we should get rid of the HFEA and the HTA and now arguing that we should retain them. That is quite a trick-I am sorry; I should not use "trick" in East Anglia references.

I support the amendments not because I believe that the Government have got it wrong, but because in presenting Schedules 5 and 7, and in the Explanatory Notes to the Bill, they have failed to present a convincing argument for changing from two well respected regulators to something that has not been explained well and clearly leaves a lot of questions to be answered. There is a need for an equivalent of the Human Tissue Authority. Sometimes we overplay the organ retention scandal. It happened in one hospital in one area. The practice was not rife through the whole research base; it is important to state that. Nevertheless, there is a need for a regulator. In the case of the Human Fertilisation and Embryology Authority, despite the fact that so much time has elapsed since the original regulator was put in place, science is changing dramatically and the research, particularly on cytoplasmic hybrid embryos-admixed embryos-was something that the HFEA rightly referred back to government to ask for a view, whereupon the legislation was updated.

I had the pleasure in 2007, when I was in the other place, of chairing a Joint Committee on the Human Tissue and Embryos Bill. When the noble Lord, Lord Warner, presented the idea of a regulatory authority for tissues and embryos, I was hugely in support. It made good sense to bring everything together; it was efficient; and the less unnecessary regulation we have, the better. However, while I was initially supportive, I was staggered by the response from a host of organisations that supported two regulatory bodies. I remember a consultative session one evening in Portcullis House when all the organisations that were opposed to any research on embryos, or any use of the embryo other than for its God-ordained purpose, came together and argued for the regulators to stay on the ground that this would protect the embryo. I left with a clear understanding that the principled, ethical and moral stance on the special relationship of the embryo taken by the noble Baroness, Lady Warnock, was something that the Human Fertilisation and Embryology Authority had taken to heart and incorporated into its regulatory function. To be fair, the Government listened to the Joint Committee and dropped their proposals, which is why we are where we are today. The Minister has made it clear in several forums that this is not a rerun of RATE, and I fully accept that. However, he must today make absolutely clear how tissue and embryos will be protected in the new regulatory and research

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environment. If you throw out the current organisations, it is clearly necessary for the Minister to clarify what will replace them.

The HFEA was far from perfect but it commands huge support from the research and clinical communities and, in particular, from the public. Ultimately, we regulate to protect the public and not simply to ensure efficient and effective clinical practice. However, the Government have now given us some clarification and we should at least examine the proposals that they are making.

In terms of research, I strongly support the report of the Academy of Medical Sciences. It makes good sense to establish a health research agency and to try to bring all medical research together under one body. Indeed, as the Health and Social Care Bill is almost totally devoid of any reference to medical research, at least there would be a regulatory body, run by clinicians and scientists, with some clear understanding about the way that medical research is carried out. Therefore, I believe that the proposal for bringing all medical research together is excellent. It certainly gives me confidence that, provided the Government accept the recommendation of the Academy of Medical Sciences for a new health research agency, their proposals will take us forward in a much more positive sense.

Will the Minister assure the Committee that regulation regarding research and research techniques will also reside with the health research agency? The idea of placing research under the new agency but putting the regulation of research techniques under a different agency is totally unacceptable. Will the Minister also confirm that the new health research agency does not require primary legislation and that it can be established relatively quickly without such legislation? If he is able to confirm that, can he assure the Committee that when the Bill goes to the other place there will be a clear timetable for setting up the agency? That will provide some clarity about the path ahead regarding research.

Where clinicians have a strong case is that there is a sense that techniques approved for clinical application should come within the regulatory framework of NICE or the CQC. I have some clear reservations about the CQC and I recognise that the Government will have to make the case. My qualification is that the CQC is untried, and there is a huge difference between inspecting care homes and inspecting clinics which use the most advanced techniques of assisted conception, PGD, the use of saviour siblings and so on.

In closing, will the Minister assure the Committee that the current team of specialists dealing with clinical application in the HFEA and the HTA will be transferred en bloc and kept together within the new organisation so that we do not lose impetus or, more worryingly, make mistakes? There is, I believe, a coming together in terms of what the Government want and preserving the best of what the HTA and the HFEA have to offer. I think that the Minister has to make the case but I believe that the Committee is listening.

Baroness Butler-Sloss: My Lords, I have been looking with interest at the very helpful parliamentary briefing, particularly on the HFEA and the statutory functions that fall into four main groups. I am very concerned

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about each area. If licensing is to go into the Care Quality Commission, as has already been mentioned, will that commission have the same level of expertise to deal with the really difficult cases that may come up? I speak as a former judge who had a case where semen was put into the wrong eggs. Two families found that the non-white semen had been put into white eggs, and the children born to the white family were not white. It was the most appalling story. It caused grief to two families and, of course, to the twin children. It became public knowledge. It was a case that I tried. What is needed is careful regulation of the clinics and expertise in what the clinics are doing.

Another matter I would like to raise in particular with the Minister, and one which has not yet been raised in this evening's debate, is the collection of data, the division of information, and the maintenance of a register. What is happening, according to the Government, is that the licensing and regulating will go to the Care Quality Commission but the provision of the information, the data collection, will go somewhere else.

What rather shocked me was the last paragraph of the helpful briefing saying that the arrangements for the transfer of the information-related functions will be based on assessments, and functions will be integrated into the most appropriate body. We do not know where the data functions will be going, which I find extremely disturbing. It leads me to the view that this plan to abolish both the HFEA and the HTA, whose functions are going to be divided, has not been given the sufficient thought or impact assessment one would have hoped for. We have not yet been given good reasons why these two functioning bodies should be got rid of.

I entirely support the wise words of the noble Lord, Lord Warner. It may very well be that each of these bodies could be streamlined, pared to the bone, have less back-up staff and cost less money. However, having asked in another debate on this Public Bodies Bill, "If something works, why break it?", I say that these two organisations appear to work and so it is premature, at least, to be abolishing them now.

Lord Walton of Detchant: My Lords, when I came into this House almost 22 years ago, my baptism of fire was the consideration of the Human Fertilisation and Embryology Bill. I spent a great deal of time considering its provisions, based upon that splendid report produced by the noble Baroness, Lady Warnock.

The purpose of the Act, as it became, was to license experiments on the human embryo up to 14 days after fertilisation, first, for improvement of the management of infertility and, secondly, to help in the prevention of the birth of children with fatal and seriously damaging disease.

Those objectives were, very largely, fulfilled. We got to a stage of being able, through licences from the HFEA, to embark upon a programme of pre-implantation diagnosis of some of the severest diseases like cystic fibrosis and muscular dystrophy. It did a wonderful job.

It became quite clear, however, that, because of the developments in human embryology and the enormous advances in research, it was necessary that the Act

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should be further amended, not only in order to prevent the birth of people with severe diseases but also to be able to use human embryo material and the stem cells derived from it for the treatment of human disease. That resulted in a number of other amendments and regulations being introduced.

We then went even further with additional developments. As many in this House will know, one of the great developments recently under a licence from the HFEA has been the ability to prevent the birth of children-not yet feasible but on the verge of becoming so-with a devastating form of mitochondrial disease. I will not go into the scientific detail because it is extremely complex.

I mention the word complexity because I cannot conceive that the role and responsibility of the HFEA-I entirely agree that it is not perfect; it may be slimmed down, streamlined or modified-could possibly be carried out by the Care Quality Commission, which is, under its major new responsibilities, required to inspect hospitals, care homes, general practices and all bodies concerned with the supervision of health work of all kinds. To try to carry out those responsibilities under the Care Quality Commission is simply not feasible.

Last week, as the noble Earl will remember, we debated a Question on the role of the Academy of Medical Science's report on the governance of medical research. I agree entirely with what the noble Lord, Lord Warner, said: this is a very exciting and important development, particularly in the conduct of clinical trials and the supervision of research in general. It certainly does not cover the responsibility which the HFEA is carrying out, and I therefore cannot accept the Government's proposals to put that body within the Care Quality Commission.

I move on to the HTA for a moment. When I was a medical student in the early 1940s, on the top floor of my medical school there was a museum which was full of organs held in formalin in plastic bottles. They were a wonderful teaching resource, because they were organs showing the signs of disease and, for the teaching of medical students, they fulfilled a major responsibility. No one had asked the patients involved before those organs were retained for teaching purposes.

The problem of the Alder Hey so-called scandal was that the permission of the individuals from whom the organs were removed had not been taken. What nobody recognised at the time was that if you were to carry out a post-mortem examination to try to determine the nature and causation of the disease from which the individual had died, there was no way in which the simple carrying out of the post mortem and visual inspection of the organs could give you the answer. The organs had to be removed; they had to be pickled in formalin; they had to be studied under the microscope, to give the answers which everyone wanted to know as the outcome of that post-mortem examination.

Where members of my profession were mistaken was that it became almost accepted by doctors, pathologists and clinicians that once permission for a post mortem had been given they could assume that permission had been granted to retain the organs for such an examination. They were wrong. Hence, the Human Tissue Authority was created to control that

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process. It has been very successful not only in that regard but also in issues related to the retention of tissues obtained for diagnostic purposes by biopsy. It has also been extremely successful in controlling the use of anatomical material for teaching purposes. It has fulfilled a whole series of other functions. My view is that it is so necessary that that function should be continued that I do not believe, for the same reasons, that the Care Quality Commission could feasibly absorb that task. It could do so only if it took on board the scientific experts on human fertilisation and embryology on the one hand, to deal with the responsibilities of the HFEA, and the scientific experts in pathology, anatomy, molecular biology and other branches of medicine, to look at the human tissue issues and also to be able to deal with issues relating to the donation of organs for transplantation. Those complex issues are so broad in their responsibility that I do not believe that the Care Quality Commission could conceivably handle them all. That is why I give warm support to the amendments.

Lord Newton of Braintree: My Lords, my reason for not pressing my case earlier was that I knew I was going to be out-gunned by the noble Lord, Lord Walton. He has demonstrated that conclusively, and I am certainly not going to try to compete with him. I ought in passing to declare an interest I had at the time of the passage of the Human Tissue Act: I was then chairman of the Royal Brompton and Harefield, a major transplant centre which clearly had an interest in this matter.

I ought to confess, in what is going to be a brief intervention, that I am getting to be rather worried about the number of occasions on which I find myself in some sympathy with the noble Lord, Lord Warner. He indicated earlier that he had hopes of enticing me to a different part of the Chamber, if I understood his remarks correctly-but his hopes will be frustrated. I want to make some simple remarks from what I call the coal face, as I am chair of another health trust in the mental health field, on the issue of the CQC. The CQC was asked to do a huge new task by the previous Government, and is doing it valiantly, not least in the mental health area that I know. However, it is struggling to fulfil in the originally intended timescale the jobs that were put upon it. I wonder whether the CQC actually wants yet more tasks, whatever the argument might be in an intellectual sense. Even if we agree in the end to go down this path, and that is some way ahead yet, I hope it will not be too quick and that the CQC will be in a position to digest the meals it is being asked to take in before being asked to consume them. As a specific question: does the CQC actually want this work?

Baroness Deech: I support this amendment, and I declare an interest as a former chair of the HFEA. In other words, I was a gamekeeper, and there were poachers on the other side, if I may use that term in respect of some very eminent clinicians and embryologists in this country. They may tell you that IVF reproductive work embryology is now routine. Yet at the same time, they will say-or at least not deny-that the work they are doing is ground-breaking. So it remains: every day brings something new.

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I have spoken about this topic many times in this Chamber and elsewhere, and I will not repeat myself, save to say that my admiration for the Minister is such that I share his pain on each occasion when I feel that he is trying to defend the indefensible. He would be grateful, I think, if we could somehow get him off the hook. One of the ways of doing that is cost. The principle underlying the abolition and retention of various quangos in this Bill is, of course, streamlining, efficiency and cost. The HFEA currently costs £7 million, of which all but £2 million comes from the patients. No one who cares about the patients could possibly imagine that they will be charged any less-or not charged at all-if these functions are absorbed into an existing or new body. The poachers, who are very keen to get rid of the HFEA, seem to think, when you listen to them, that there will be no regulation, that there will be a free-for-all. They are under the misapprehension that if this amendment fails, which I hope very much it will not, a merger of the HFEA will mean no regulation; as I say, a free-for-all. But that is not so. Primary legislation remains and no one has suggested that we would cease to have regulation for which this country is world renowned, having followed the lead of the noble Baroness, Lady Warnock, in her esteemed report written more than 20 years ago, which remains to this day the very best report on the issue.

Those who really dislike the whole concept of embryology and in vitro fertilisation because of their religious beliefs have, as others have said, still shown respect for the HFEA because they regard it as something of a shield against the wholesale misuse of embryos, as has happened in some other countries. Before it had regulation, Italy was the place everyone went to if they could not get what they wanted elsewhere. It was where you would go if you were white and wanted a black baby or vice versa, or if you were 64 or 70 and wanted a baby. Italy now has regulation, albeit in my view too strict. America has a patchwork of regulation, but has seen more scandals than we have. As my noble and learned friend Lady Butler-Sloss said, things go wrong sometimes as a result of simple human error, which in the end is probably not preventable. But at least we do not have the birth of octuplets, as has happened in the United States. We do not have those websites which noble Lords may enjoy googling one evening. They can look up "California Cryobank" and see lists of apparently brilliant Californian PhD students, all of them six foot six and sporty with IQs to match, offering their sperm for sale, and indeed the female equivalents their eggs. This is not the route that we wish to go down. We wish to retain regulation.

If we are going to keep regulation, there is absolutely no reason for dismembering the HFEA and putting functions that are plainly closely linked together and of utmost importance to parents, babies and sick people into different bodies, some of which are untried. Again, I echo my noble and learned friend Lady Butler-Sloss in saying, "If it ain't broke, don't fix it".

9.30 pm

Lord Mackay of Clashfern: My Lords, I declare an interest as an honorary fellow of the Royal College of Obstetricians and Gynaecologists and as the person who had the privilege of introducing to this House the

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Bill that ultimately became the Act which has been referred to more than once. As a parent of such a body, it would be strange if I wanted to see it dissolved altogether. On the other hand, a parent who is interested in his child is glad to see him or her develop and possibly make unions with others who seem to be suitable for them. I had the honour of serving on the Joint Committee looking at the recent Bill in this area under the distinguished chairmanship of the noble Lord, Lord Willis of Knaresborough. I strongly supported the decision taken by that committee to recommend against the proposed union between the Human Fertilisation and Embryology Authority and the Human Tissue Authority. I think I am right in saying that the noble Lord, Lord Willis, may have done a slight injustice to the noble Lord, Lord Warner, because I think the noble Lord, Lord Warner, said that he had recommended against it to the Minister. I do not know whether the Minister accepted it immediately, but eventually it was accepted by the corresponding Minister.

The matters that were the subject of the Bill which I had the privilege of introducing are certainly among the most important areas of modern scientific and medical work. But science and medicine have moved on very fast and far since that Bill was introduced and the developments dealt with in the most recent Act show that. That Act moves out of pure human embryology to the transition towards hybrids and, at the extreme end, towards the animal end of embryology. It shows that science has developed in such a way that the distinct field carved out in the original Bill has been altered by progress, if you like to think of it in that way, and I hope that that is what it is. There is a great deal to be said for the view that modern scientific and medical research is very difficult to split up. The embryo is important, but there are other important aspects of that research. I can therefore see a very strong argument for having a research body which has overall responsibility in this area.

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