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With that explanation, I hope the noble Lord, Lord Wigley, will feel able to withdraw his amendment. I think the noble Lord, Lord Greaves, was very much heading to get the sort of answers that I have now given, so I hope he will feel able to withdraw his amendment on the basis that I have given sufficient information.

Lord Greaves: My Lords, I am grateful to the Minister for that. I will read it carefully, and I will take advice from people in our group who are more Welsh than I am and see whether they agree with it too. On first hearing, it does sound a fairly straightforward explanation of where we stand in the Bill, which was the purpose of putting down the amendment.

The noble Lord, Lord Wigley, asked me whether I wanted to re-reserve powers. I do not, in any circumstances -this was merely a useful peg to pin a couple of questions on, which have been answered fairly satisfactorily.

The only question that comes to mind listening to the Minister, which she may not be able to answer, is how widely the Welsh Ministers consulted local authorities in Wales on whether they wanted the general power of competence. She may not have that information, but it is an open question that someone might have the answer to.

The noble Lord, Lord Wigley, suggested that the devolution settlement in Scotland was simple. It may be more straightforward than in Wales, but one of the last big Bills in which I was involved was the Marine and Coastal Access Bill in the previous Parliament. The whole relationship with Scotland was an absolute nightmare. It was all down to the details of the way in which the devolution settlement for Scotland affected a whole series of matters in that Bill. However, Scotland is not much affected by this Bill, and perhaps we should be grateful for that.

The Minister's first remarks on the way in which the Government are thinking about releasing some of the controls on Wales were welcome. If that comes about, I think we would be very much in favour of it. On that basis, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Schedule 1 agreed.

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Clause 2 : Boundaries of the general power

Amendment 6

Moved by Lord Tope

6: Clause 2, page 2, line 13, leave out subsections (1) and (2)

Lord Tope: My Lords, I shall speak also to Amendments 7, 8 and 9. In common with the rest of local government, for many years we have pressed to have a general power of competence. I should make clear at the start that we are wholeheartedly in support of this, although I increasingly wonder exactly how much extra difference it will make. I nevertheless welcome it without reservation.

I have no intention of pressing these probing amendments to the vote but want to give the Government an opportunity to place on record a little more clearly the limitations being imposed on that general power; certainly I am not clear on them. Amendments 6 and 9 probe the nature of overlap and the boundaries imposed on the general power by pre-commencement and post-commencement limitations and, in particular, the intentions of the Government in relation to post-commencement limitations. Amendment 8 probes why local authorities should not be able to change their governance arrangements at least to a degree under the general power. These are questions to which we would really like some answers. If Parliament graciously is granting the general power, the fewer limitations the better. We wonder, as we will in later stages of the Bill, why it is necessary to say what local authorities may or may not do once they have that general power. With that, I look forward to hearing the clarification and expansion from the Minister, and I beg to move.

Baroness Hanham: My Lords, I thank my noble friend for his question. The general power is drafted on the basis that local authorities will be able to do anything that an individual might do, other than that which is specifically prohibited. In practice, this means that local authorities will be required to act in accordance with statutory limitations or restrictions. This is not surprising as we would not want local authorities to be completely outside the law.

Clause 2(2) sets out that limitations in legislation apply to the general power but draws a distinction between pre- and post-commencement limitations. Restrictions in post-commencement legislation will apply to the general power only where the drafting of the new legislation is clear that this is the policy intention. Amendment 6 would remove the requirement that local authorities exercising the new power act in accordance with any restrictions. Amendment 9 removes the definitions of post- and pre-commencement limitation from the clause.

Some restrictions on the activities of local authorities are obviously needed-for instance, a council should not have free rein to override the rights of others and these should be set out in the clearest terms-to ensure clarity for local authorities and avoid the uncertainty that has led to legal challenges to local authority powers in the past. That is what these subsections seek to achieve. We cannot require pre-existing limitations

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to expressly refer to the general power but, where these are found unnecessarily to restrict the general power, they can of course be removed following consultation. Amendment 7 would allow local authorities to decide their own governance arrangements and Amendment 8 will allow local authorities to use the general power to further contract out its functions.

We believe that it would be inappropriate that local authorities should be entirely free to change their governance arrangements. The Government set the overall governing structures of local authorities while still providing them with sufficient flexibility to decide on the most appropriate arrangement for their individual circumstances. This ensures democratic accountability and that transparent and workable arrangements are put in place. Arrangements for discharge of functions remain subject to existing legislation. Contracting out of functions will continue to be permitted in specific cases. The noble Lord asked specifically why local government should not be able just to make its own decisions about its governance. The answer is that the Government are right to be able to set the overall governing structures of each local authority.

Baroness Hamwee: I am puzzled by the answer about contracting out. Is not what is important that a local authority ensures that a particular service is delivered, rather than how it delivers it?

Baroness Hanham: My Lords, contracting out is clearly one of the ways in which a local authority can carry out its services but it will still be subject to the Deregulation and Contracting Out Act 1994. Those provisions are not being repealed, so they will continue to be part of the legislative control that will be maintained on the general power.

Lord Tope: I am grateful to the Minister for her reply, which I will read with great interest tomorrow. I am still a little puzzled about the restrictions on the governance, to which we will come at a later stage. If I understood the Minister correctly, she said that the Government felt that it was right to have some restrictions on what local authorities could do in their governance arrangements. I wish that I had the quote with me but I recall that, in the August edition of Total Politics, the Secretary of State said that he did not care what system of governance local councils have. He even said that they could have a choral system and sing sea shanties for all he cared, provided only that the system of government was efficient, transparent and accountable-three criteria to which every one of us would agree. Therefore, I am still a little puzzled as to why the Government feel that it is necessary to restrict a general power of competence in this area. Nevertheless, we will no doubt get to this in the later stages of this Bill. In the mean time, I beg leave to withdraw Amendment 6.

Amendment 6 withdrawn.

Amendments 7 to 9 not moved.

Clause 2 agreed.

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Clause 3 : Limits on charging in exercise of general power

Amendment 10

Moved by Lord Tope

10: Clause 3, page 3, line 13, leave out ", or could be done,"

Lord Tope: My Lords, Amendment 10 stands in my name and that of the noble Lord, Lord Greaves, as does Amendment 11 where our names are reversed but we are as one, as always. These probing amendments are simply to ask the Government to explain more fully-for instance, as regards Amendment 10-the meaning of "or could be done", so that we can understand better what this overlap of power means and what power the local authority is using that is not the general power.

Amendment 11 causes me a little more concern, not least because among my responsibilities on my council is that for the provision of leisure services, and therefore I particularly want to understand a little better than I do at the moment what exactly the Government mean in suggesting that no local authority should ever make a year-on-year surplus. If some parts of our leisure services were not able to make a profit, that would have quite a serious effect on my local authority and, I suspect, on some others. Perhaps I do not fully understand the provision, so I look forward to an explanation from the Minister of exactly what is meant by it. I beg to move.

6 pm

Lord Beecham: My Lords, I endorse the amendments and the questions that the noble Lord, Lord Tope, has asked because it is far from clear what the import of these provisions will be, particularly in relation to charging. Do the costs of provision allow for just the basic costs or would they include the cost of replacement, renewal, training and reinvestment? The definition in the Bill seems very narrow. Perhaps the Minister would agree to take it away and look at it. I do not think that there is a lot between us on this. We on this side are not seeking, and nor do I think is the noble Lord, to encourage a position where the provision of a service is translated into a commercial enterprise, but the boundaries are perhaps less obvious than they might first appear. I should have thought it would be possible to reach an accommodation that gives sufficient tolerance to allow a surplus to be reinvested into the service as opposed to something that might be distributed elsewhere.

Baroness Hamwee: My Lords, "the costs of provision", the term used in Clause 3(3), could mean only the direct costs of provision or it might mean the indirect, back office costs and so on. Can the Minister help me on the exact import of the term? My second question concerns how this provision fits with Clause 4, which deals with doing things for a commercial purpose. Is there some sort of provision that falls short of doing things for a commercial purpose but which is outlawed by Clause 3(3)?

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Baroness Hanham: My Lords, the answer to that will have to come in a note, I am afraid, because I am not clear about the relationship between the two. I will make sure that my noble friend has a reply to her questions so that she may return to the point on Report if she so wishes.

With regard to the provision of leisure services, which was the specific area raised by the noble Lord, Lord Tope, those services are subject to separate powers to charge, so they are unaffected by the general power by virtue of Clause 3(2)(c). In other words, these services once again come under previous legislation and therefore cannot be subject to this legislation. I think that this is going to be the answer that we will give to a number of these issues, where the general power of competence is restricted by previous legislation which is not being amended or annulled. I hope that that answers the question.

Lord Tope: My Lords, I am grateful to the Minister for her answer, but I am bound to say that I am not any wiser than before. I have used leisure services as an example since it happens to be one for which I am responsible, but perhaps it was the wrong example, which is one of the troubles with using examples. Frankly, I am no clearer about the meaning of this provision and what restrictions it would bring about.

I can see from my raised position that the noble Lord, Lord Beecham, wishes to speak.

Lord Beecham: Perhaps the noble Lord could offer the Minister the example of a meals on wheels service that an authority might provide instead of, say, leisure services.

Lord Tope: Indeed, I am happy to offer the Minister the example of a meals on wheels service, which has just come to mind as possibly a more appropriate example. I would be grateful if she could elucidate a little more because I see that I am not the only noble Lord in the Committee who has failed wholly to understand it. If it is not possible for her to do so today, I am sure that she will write to us, but if she is able to be a little clearer about what is covered rather than what is not covered by this provision, I would be grateful.

Baroness Hanham: My Lords, I will try to be a little more helpful. Part of the answer is that the Government believe that a local authority service should not make a surplus year on year. I think that that was one of the points raised earlier. By providing a power to charge for discretionary services, the Government's aim is to encourage authorities to provide the sort of services that they would otherwise decide not to provide or improve at all because they cannot justify or afford providing them for free or improving them. I do not think that that actually answers the question, so I am going to write to the noble Lord before the next stage.

Lord Greaves: Before my noble friend responds, the crucial question that comes to mind is this: if the provision as it is in the Bill is passed, does it change the existing situation?

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Baroness Hanham: The existing situation is that current legislation limits what can be done, and this continues to limit it. Under the general power, if it is not restricted by current legislation, then it is permissive.

Lord Tope: I am grateful to the Minister for her offer to write, which it is hoped will clarify the situation. I might suggest that if we are all struggling a bit with what is in the Bill, perhaps the drafting is not as clear as it should be, and that is something on which we shall all have to reflect. In the mean time, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Amendment 11 not moved.

Clause 3 agreed.

Clause 4 : Limits on doing things for commercial purpose in exercise of general power

Debate on whether Clause 4 should stand part of the Bill.

Lord Jenkin of Roding: I did not give notice of my intention to ask a question about Clause 4, but I have listened to the discussion on the previous group of amendments with some interest. Clause 4(1) gives me a certain amount of anxiety. The provision describes,

Does that really just mean that if it is illegal to do it otherwise, they may not do it for a commercial purpose, or is there some inwardness here which perhaps I have not appreciated? It sounds almost tautologous. If a local authority cannot do something, presumably it cannot do it whether for a commercial purpose or otherwise, in which case why put it in the Bill? If there are differences or some distinction is being drawn here, I would be most grateful if my noble friend could explain it to me.

Baroness Scott of Needham Market: My Lords, I want to join this brief exchange because I am developing an increasing sense of Alice in Wonderland. It feels as though we are operating in two worlds: the old world in which local authorities were only allowed to do things that were in statute, and the new world in which they are free to do anything unless they are barred. It is beginning to feel, in the context of this debate and future debates, that there is a real problem about being caught in the middle where local authorities will be stopped from doing a lot of the things that previous legislation allowed them to do. I am sorry, but I find it difficult to express the point, but I am sure that noble Lords are beginning to get a sense of what I mean. The question of how significant the general power really is, if local authorities are continually hampered by previous legislation, will become very important. It is an issue to which we will keep coming back.

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Baroness Hanham: My Lords, Clause 4(1) provides that an authority may,

that is, to trade under the general power, while subsection (2) provides that if an authority is doing something for a commercial purpose, it must be carried out "through a company". If an authority wishes to trade, under subsection (1) it can do so, but if it wants to do something else for a commercial purpose, it must be carried out through a company. It is not trading, rather it is presumably providing a service of some sort, and that must be done through a company.

Baroness Farrington of Ribbleton: I, too, am slightly confused. I remember sitting in the Minister's seat when we were discussing the Greater London Authority Bill-I can see smiles of remembrance in turning to the Box. When asked a direct question by the noble Baroness, Lady Hamwee, I remember seeing one person in the Box nod and another shake their head. I should like a little more clarity than that. Examples of trading would be interesting. If a parks department was selling surplus plants, would that be trading? It is that sort of thing that I would like to know in a written response from the Minister. I hope that she will accept, given my earlier example, that it is not a criticism of her reply.

Baroness Hanham: My Lords, I think that it would help everybody if I replied in writing.

Clause 4 agreed.

Clause 5 : Powers to make supplemental provision

Amendment 12

Moved by Lord Beecham

12: Clause 5, page 4, line 10, leave out subsection (3)

Lord Beecham: My Lords, this is an important clause. It is almost a case of the Secretary of State giveth and the Secretary of State may take away, and there are some significant concerns about it.

The clause begins with what I think is intended to be a helpful provision, Clause 5(1), where if the Secretary of State thinks that a statutory provision may prevent or restrict an authority exercising the general power, he may by order amend, repeal, revoke or disapply it. Following debate in another place, some limitations on the exercise of that power under subsection (1) are set out in Clause 6. However, there remains real concern about much of the legislation that might be disapplied. That is certainly one key provision to which I will return.

There are problems also in other parts of the clause. Subsection (2) deals with the position where if the Secretary of State "thinks"-it is odd that that word is used in legislation, but so be it-that the general power is overlapped by another power then he may by order amend, repeal, revoke or disapply any statutory provision, whenever passed or made. In respect of that

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provision, the Delegated Powers Committee has expressed significant reservations. I refer to paragraph 17 of its report on this part of the Bill, which states:

"Where this power is exercised in the same instrument as the power in clause 5(1), the procedures applicable to orders under clause 5(1) apply. But where the power is exercised separately, the order is, despite being the exercise of a Henry VIII power, subject only to negative procedure".

The committee was not persuaded by the memorandum that the case had been made for a departure from the normal presumption that the power should be subject to affirmative procedure. It did not think that it should be displaced and recommended that,

I would be grateful if the Minister could indicate whether the Government are prepared to accept that recommendation, or, if a conclusion on that has not been reached, whether she would in due course provide a view.

6.15 pm

The next two subsections also provide very wide powers for the Secretary of State. Subsection (4) states that he may,

In other words, the general power of competence may be qualified significantly simply by order. Subsection (3) states that the Secretary of State may prevent local authorities doing anything which is specified, or is of a description specified, in the order.

Those are two substantial qualifications. The Secretary of State can, effectively at a stroke, by order cut down the power of general competence, disapply it completely in relation to activities which he considers should not be carried out or make them subject to conditions. On that point the Delegated Powers Committee commented:

"We do not consider that this is justified. We recommend that orders under clause 5(3) amending earlier orders so as to extend the earlier order to other authorities should be subject to the affirmative procedure. This applies equally to orders under clause 5(4)".

Again, I would ask the Minister to indicate the Government's response-if she can, today-to the committee's view.

Reverting to the dispensing power with which Clause 5(1) provides the Secretary of State and acknowledging that the Government sought to clarify the position in what is now Clause 6, I nevertheless point out, as does Amendment 14, that there are many Acts of Parliament which could under the Bill as it stands see their impact significantly diluted by a dispensation on authorities no longer to have to comply with duties that are imposed on them. I shall not, of course, read out the long list, but matters affected could include those relating to equalities-about which the Equality and Human Rights Commission has expressed clear views-the Chronically Sick and Disabled Persons Act, the Public Health Act, environmental legislation and much else besides. As indicated, all that would be required in terms of process for this dispensing

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power to be exercised would be an order, which your Lordships might think is not satisfactory in the context of the conflict that would then arise with the very principle of the power of general competence which, like the noble Lord, Lord Tope, I welcome. I share with him the qualification that one does not quite know how far it extends present powers, but it is nevertheless a welcome indication of the Government's overall approach.

In addition to those significant reservations, there are questions arising under other amendments that I propose in relation to consultation. Amendment 15 suggests that all local authorities which may be affected by an order that might be contemplated under previous provisions should be consulted, not merely those which the Secretary of State may select. In addition, two further groups should be consulted: persons or organisations representing local government, including organisations representing members of staff of local authorities, who would clearly have an interest in this matter, as well as such other persons as the Secretary of State considers appropriate. These would be, I suggest, fairly straightforward matters, and I would hope that the Minister felt able to accept those suggestions.

In addition, Amendments 22 and 23 are based on, or certainly reflect, submissions made by a number of bodies, including the Equality and Diversity Forum. The amendments seek to insert some safeguards. Amendment 22 provides that,

So there would be a greater onus on the Secretary of State to satisfy that condition. Amendment 23 seeks to add that,

Both proposals are made by the Equality and Diversity Forum, which represents a wide range of national and non-governmental organisations. In its briefing material it welcomes the Government's proposals for the creation of the big society and the decentralisation of power, as it puts it, but states that it is very concerned about the far-reaching powers set out in Clause 5 that,

In its view,

It continues:

Perhaps when she replies the Minister will tell us how that consultation exercise is going and what the weight of demand is for change to the statutory requirements that have been, as it were, put up for review or possible abolition.

In welcoming new Clause 6, the Equality and Diversity Forum, as I say, finds that it does not go far enough.

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Taking the Government at their word, one anticipates that they would wish to see the general power as unfettered as possible. These provisions in the Bill, unless amended, would leave too much power in the hands of the Secretary of State of the day effectively to curtail the general power of competence on the basis of little protection in the way of scrutiny by Parliament. At the very least, as the Delegated Powers Committee suggests, there should be an affirmative procedure for any order to be made. This ought to follow, as these amendments suggest, a proper and thorough consultation process before any disapplying orders are made and before conditions are laid down, let alone the hugely overriding provision in Clause 5(3) which would prevent local authorities doing anything described or specified in the order.

It is a wide-ranging power effectively to cripple the exercise of the power of general competence. I cannot believe that that is intended, but that is what the drafting suggests. Again, I hope that the Minister will take this away and enter into further discussions about this strange contradiction to the thrust of the part of the Bill we are now discussing.

Lord Greaves: My Lords, I have Amendments 16 and 17 in this group and, because of the usual vagaries of grouping, I have two amendments in the next group which are either identical or of identical import to Amendments 22 and 23 in this group: Amendment 22 is effectively the same as my Amendment 21 in the next group and Amendment 23 is effectively my Amendment 25 in the next group. I shall therefore speak to the two amendments in this group and not to those two of my amendments when we get to the next group.

Amendments 16 and 17 relate to the process of consultation. Amendment 16 seeks to add a further category to the three categories already in the Bill, which at Clause 5(7) states:

"Before making an order under subsection (1), (2), (3) or (4) the Secretary of State must consult-such local authorities ... such representatives of local government, and ... such other persons (if any), as the Secretary of State considers appropriate".

I seek to add to that the words,

Clause 5(7) currently requires the Secretary of State to consult local authorities, representatives of local government and such other persons, if any, as he considers appropriate. Amendment 16 would require the Secretary of State to consult the additional category I have stated.

It is important that the Secretary of State should be required to consult with those who could potentially lose the benefit of statutory protection, whatever it may be, before the provision in question is repealed or amended. The amendment closely reflects the consultation requirements in Section 13(1)(a) of the Legislative and Regulatory Reform Act 2006, on which it is based, and also Clause 10(1)(b) of the Public Bodies Bill of blessed memory. In both cases the requirement to consult representatives of those substantially affected is additional to the duty to consult such other persons as the Secretary of State considers appropriate. My

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question is: why the change in this Bill compared with, particularly, the Legislative and Regulatory Reform Act 2006?

Amendment 17 seeks to remove the words "if any". Those words appear to have been added to this Bill when compared with the existing legislation on which it is based. In the spirit that the Bill is too long already, I offer to take out two little words. More seriously, what difference in meaning is created by the addition of these words when compared with the existing legislation? That is the kind of question you get from people like me who are suspicious that any change is for a reason and not on a whim.

The noble Lord, Lord Beecham, referred to his Amendments 22 and 23; as I have said, my Amendments 21 and 25 are of identical meaning. The noble Lord referred to the red tape challenge. The Government seem to have a knack for totally unnecessary major public relations disasters. It is a good idea to remove red tape when it is not necessary, but the huge scale and breadth of the Acts of Parliament and regulations which are being churned out, month by month, on the different areas of the red tape challenge are a recipe for many people becoming concerned, jumping up and down and mounting campaigns which one hopes will be largely unnecessary when the final result comes out.

Having made that comment, I shall devote attention to the amendments. Amendment 21 to Clause 6(2) sets out a number of conditions that have to be met before the Secretary of State can make an order under Clause 5(1). Amendment 22, as moved by the noble Lord, Lord Beecham, would add a further condition-

6.30 pm

Baroness Hanham: To be a little bit pedantic, I am perfectly happy to answer those questions, but I think we are on the seventh group of amendments, with Amendments 12 to 17 to Clause 5, and Amendments 22 and 23. The noble Lord has just referred to Amendments 20 and 21, which I think come in the next group. It may be more convenient if they could be considered there.

Lord Greaves: I apologise. I shall explain it all again, because there is a mess-up in the groupings and it is best to discuss the questions under the amendments tabled by the noble Lord, Lord Beecham, rather than under mine that come later. I keep referring to mine because my notes obviously refer to them.

Lord Jenkin of Roding: If my noble friend objected to the grouping and thought that the amendments should have been put together differently, he had plenty of opportunity over the weekend to put that to the Government Whips. As it is, surely to goodness he must debate those amendments in the group in which they are listed on the amendment paper-otherwise it becomes extremely confusing.

Lord Greaves: I agree entirely, except that I did make changes to the grouping. As a result of this, we are where we are. I attempted to make sense of it, but

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in the end it did not come out that way. Let me be absolutely clear: I am talking to the two amendments in the group that starts with Amendment 12 as moved by the noble Lord, Lord Beecham. I apologise for the confusion in the numbers, which is entirely in my head and in my notes. I shall attempt to be much clearer.

I am talking now about Amendment 22, which is in the group that we are debating. The amendment, which was tabled by the noble Lord, Lord Beecham, and which I entirely support, reflects the analogous condition in Section 3(2)(a) of the Legislative and Regulatory Reform Act 2006. This additional safeguard is needed and is not covered by the other conditions-for example, the requirement for proportionality. The reason is that Clause 6(2)(a) refers to the proportionality of the "effect of the provision", while Amendment 22 relates to the means of achieving that objective. The Secretary of State would have to be satisfied that the particular amendment or repeal proposed is the only way of satisfactorily securing the objective; it would require him to consider whether there were other possibilities-for example, by issuing guidance to local authorities or by amending or repealing a less significant provision. This is an extremely complicated matter. I do not know whether the Minister will be able to give us an answer that can satisfy us all, but again perhaps further discussion, either by letter or in person, can take place.

Amendment 23, which relates to the Human Rights Act and similar Acts, would add a further condition to Clause 6(2). Section 8 of the Legislative and Regulatory Reform Act 2006 makes a specific exception for the Human Rights Act. The Minister in the House of Commons stated that Clause 6(2)(e) would preclude the making of an order repealing the Human Rights Act or any part of it, but that paragraph relates to the provision-in other words, what the order proposes to do. This is different from whether the statutory provision itself, which is the subject of the order, is of "constitutional significance". The point is that the 2006 Act recognises that distinction. The Bill as it stands does not recognise it and the question is why not. Why the change? The amendment of the noble Lord, Lord Beecham, would restore the distinction, which would be a very sensible thing to do.

Lord Newton of Braintree: My Lords, having already declared my wife as an interest, I will not repeat that. However, in view of the contents of Amendment 14, I should mention that I am in possession of a disabled person's blue badge and that I chair a mental health trust.

I wanted to join in on this debate partly because of puzzlement and partly because I thought that the noble Lord, Lord Beecham, moved his amendments-in particular Amendment 14-with rather more diffidence than I had expected, and certainly with less vigour. By the time you have got through five of these clauses, your mind begins to glaze over, to be honest. However, as I read the provisions as a mere layman, what is being said here is that local authorities can do anything they like, subject to some broad qualifications, and the Secretary of State can allow them to do anything they like if he likes what they want to do; but if he does not like what they want to do, he can do whatever he likes

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to stop them-and all this with a limited piece of secondary legislation, possibly altering primary legislation, and on the basis of a negative resolution. I think that is it in plain English-I hope that it is, and I see some nods.

At the end of the Public Bodies Bill, I said that I thought that Henry VIII had suffered a major setback but not a terminal defeat and had gone off to regroup somewhere. Well, I now know where-it was in the Department for Communities and Local Government. Here is Henry VIII, on his charger, writ larger than ever before.

I have reservations about this, to put it mildly. The noble Lord, Lord Beecham, used a telling figure in the Second Reading debate, that there were over 1,200 pieces of legislation that could be amended by this Bill, using these powers. He has picked out some of them, and I think that he has done us a service, but I want to know the justification for this. If it is secondary legislation that is being changed, I can understand it, but if primary legislation, which has been duly and thoroughly debated and passed by Parliament, can be swept aside in this way, there is a real question about what we are all doing here. I note that safeguards have been written in, but I am not sure that they are on a parallel with the safeguards written into the Public Bodies Bill. At the very least, if the House is expected to acquiesce in these proposals, it needs at least a similar level of safeguard as we have in the Public Bodies Bill. I rest my case for the moment.

Lord Best: I have not spoken in the Committee stage, so I declare my interest as president of the Local Government Association. In that capacity, let me say that the earlier remarks from the Minister on shadow mayors and mayors acting as chief executives will be extremely well received at the LGA this evening.

I wanted to say one or two things in support of the remarks of the noble Lord, Lord Newton. The underlying intention is honourable-that if the general power of competence is inhibited by any other legislation, the Secretary of State has what could be rather draconian powers to overrule other legislation. But that clearly needs to be hedged around with some safeguards. A number of us have received representations from an alliance of disability groups, which are particularly concerned that some of the legislation that relates to their rights and entitlements might be diminished. That came to us from Age UK, Scope, which is involved with people with cerebral palsy, the National Autistic Society, the RNIB and Mencap. All these organisations are deeply concerned that some of the protective legislation that surrounds the world of disability might be done away with for the possibly good reason that it got in the way of the power of general competence -but that would seem a lesser priority. So we need reassurances here, and I support this bunch of amendments.

Lord Jenkin of Roding: My Lords, I wish to add something to what my noble friend Lord Newton of Braintree and the noble Lord, Lord Best, have said. The anxiety is not so much that any Government would be so stupid as to try to repeal essential provisions on welfare of the sort that have aroused some alarm

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but that this Government might be succeeded by another who are not so keen on the whole process of localism, devolution and subsidiarity and might therefore use the powers in a way that would restrict the general power, which might go contrary to the purposes of this legislation. I declare once again that I am joint president of the London Boroughs Association, which is certainly concerned about this possibility. The chances of any Government wanting to make material inroads into the welfare legislation to which reference has been made, and much of which is in the list in the amendment tabled by the noble Lord, Lord Beecham, are a little unreal. No doubt, however, reassurance will be necessary, and I hope that my noble friend on the Front Bench will be able to reassure those who have expressed anxieties that that is not the intention.

As I understand it, the purpose of this clause-the whole of the purpose of the power that is given-is simply to enable a local authority to exercise its general power of competence. If there are obstacles in previous legislation that prevent that, or if there is overlap, then to that extent the order may then remove the obstacle. It cannot just sweep away whole legislation; as I understand it, the provision in question has to be specifically related to the general power. I have had a lot of representations as well, and it is right that these fears should be aired on the Floor of the House so that reassurances can be given. However, the noble Lord, Lord Beecham, made the point that there is a distinction between the clauses as to whether the resolution is affirmative or negative.

I have two things to say. The first is that if the Joint Committee on Statutory Instruments makes a recommendation-I, too, read the wording that the committee recommends strongly that it should all be affirmative-it would be very unusual indeed for a Minister not to accept it. I have been through a number of Bills, most recently the Energy Bill, where that has been accepted. The whole range of recommendations was accepted, and government amendments were put down to achieve that. The second point is that if you have sufficient parliamentary supervision, that should be a sufficient assurance of protection. The power is necessary if you are going to make a reality of the general power of competence but it has to be defined, as I think it is intended to be, and it has to be subject to affirmative resolutions as recommended by the Joint Committee.

Lord Dixon-Smith: My Lords, I had not intended to intervene but I am tempted because I need to ask the Minister one question: could this subsection not be used by some other Secretary of State at some point in future to amend this legislation because it has a power in it to which he or she objects?

6.45 pm

Baroness Hanham: My Lords, in reply to that last question, the powers to amend legislation are relative to the use of the general power. Under Clause 1 the Secretary of State will be empowered to sweep away any legislation that is standing in the way of the power of competence-that is what that clause is about. The answer to my noble friend Lord Dixon-Smith is that I

20 Jun 2011 : Column 1096

do not think that that would be possible. The provision does not get rid of any legislation at all; it is only any legislation that stands in the way of the general power of competence.

I hear the concerns that have been raised regarding this clause and I hope that I will be able to reassure noble Lords on some of it. I say at the outset that the power is normally subject to the affirmative procedure, as set out in Clause 209. There are limited exceptions to that, but we are taking on board and considering the recommendations of the Delegated Powers Committee as we have on other matters. We will come on to that in due course, but noble Lords may feel reassured that the general view that the Delegated Powers Committee is not overridden will probably be maintained.

Unlike Clause 1, where the Secretary of State can take away legislation, Clause 5(3) and (4) provide reserve powers to allow the Secretary of State to restrict what a local authority may do under the general power or to set conditions around it. We believe that these powers are a necessary safeguard, given the breadth of the new power, to ensure, for example, that risks to both local government finances and the Exchequer are properly managed.

The powers will be of the most limited use. The Government have no plans to use the powers in subsections (3) and (4) and expect them to be used extremely rarely, if at all. However, they might be used to deal with, for instance, any risks that might arise from authorities' use of the new general power to engage in novel financial transactions. They are therefore a tug back if local authorities seem to be going well beyond their brief under the general powers.

On Amendment 14, the general power of competence is designed to give local authorities real freedom to innovate and act in the interests of their communities, although not to be too innovative in financial terms, as I have just said. However, there is continuing misunderstanding about the scope of Clause 5(1). This provides the Secretary of State with powers to remove or change statutory provisions that prevent or restrict use of the general power-that is, restrictions or limitations that bite on the general power by virtue of Clause 2, the clause where the Delegated Powers Committee considers that there should be an affirmative order. The whole clause is about removing barriers to the legal capacity of authorities to act, so that they may act innovatively and in the best interests of the community. It is not aimed at removing duties, nor is it a general purpose tool to remove any legislation that places burdens on local authorities.

Until now, there has been no comprehensive list of the legal duties placed on councils. To remedy this, the Government agreed with the Local Government Association that we should compile such a list-the noble Lord, Lord Beecham, referred to this-so that everyone is clear what legal obligations local councils have and to check whether the duties are relevant.

The review is ongoing. Once it is completed, it will be decided whether any changes are necessary to the statutory duties, but neither the review nor the barrier-buster power that is in Clause 5(1) is aimed at removing statutory duties protecting vital front-line services, so there is no link between these processes.

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The Clause 5(2) power can be used only to remove English authorities' powers that are obsolete because they are overlapped by the new power. Its purpose is to tidy up the statute book and simplify the law, but there will be no practical effect on the scope of local authority powers or duties.

Amendments 15, 16, and 17 are unnecessary; they attempt to gold-plate the consultation arrangements already in this clause. The existing wording in the clause does exactly what it says it does-it will ensure that anyone who needs to be consulted will be consulted-so no further elaboration is needed. The consultation must be carried out properly and in accordance with general public law principles. This means that the Secretary of State must act reasonably in deciding whom to consult and must act in accordance with equality duties, which were also mentioned, and he can be challenged if he does not.

We believe that the more specific a list becomes, the more likely it will inadvertently exclude people who need to be included. We have seen this many times in legislation. I well remember trying to get more and more people put on to the face of a Bill, but that is not always helpful. We believe that it is better that these matters are left to be judged in the particular circumstances, as quite often the consultation list will change, depending on what is being proposed. We believe that the consultation requirements are comprehensive and we do not think that these amendments are necessary.

On Amendment 22, the power is a power to remove statutory restrictions. If the same thing can be achieved in a different way, it is hard to see how they can be statutory restrictions in the first place. I am sure that, if an order is unnecessary, that will be brought to attention of the Secretary of State during consultation.

Amendment 23 raises a concern about the Human Rights Act. We want to make it very clear that an order under Clause 5(1) cannot be used to repeal the Human Rights Act. It is unlikely that the power is wide enough, as it is a power to remove restrictions and limitations that prevent a local authority from acting as a natural person and a natural person could not get rid of the Human Rights Act. It is not a general purpose tool to remove any obligation placed on local authorities. Furthermore, the third condition requires that the provision made by the order does not remove any necessary protection, which means protection afforded by measures such as the Human Rights Act. The fourth condition requires that the provision made by the order will not prevent any person from continuing to exercise any right or freedom that he might reasonably expect to continue to exercise. Any right conferred or protected by the European Convention on Human Rights is a right that a person must reasonably expect to keep. Finally, and most significantly, the fifth condition is that the provision made by the order is not constitutionally significant. I think that we can agree that repealing the Human Rights Act would be constitutionally significant. The DPRRC has signified that it is content with the safeguards on this power. In addition, we have provided for a stringent parliamentary procedure. Therefore, we do not think that anything further is necessary.

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The noble Lord, Lord Newton, and others have raised concerns about the conditions on the use of the power. It may be useful at this stage to say that Clause 6, which limits the power under Clause 5(1), was introduced in the other place as a result of the concerns expressed. We believe that a list would need constant updating. If something was inadvertently left off the list, that would not mean that it could be amended. We believe that Parliament, when considering orders made under these powers, will be able to judge whether the use of the power is appropriate.

I hope that I have covered all the amendments, although I think that one or two got muddled into the next group-certainly, Amendment 22 appears in my notes twice. I hope that I have responded to noble Lords' questions satisfactorily and that they will not press their amendments.

Lord Jenkin of Roding: Before my noble friend sits down, will she confirm that she has repeated the explanation that was given in the memorandum to the Joint Committee on Statutory Instruments about the difference between subsections (1) and (2), which the Joint Committee expressly and firmly said that it did not accept? Is she now firmly saying that she will nevertheless insist on the difference-an affirmative resolution for an order under subsection (1) but a negative resolution for an order under subsection (2)? If so, I would find that difficult to accept.

Baroness Hanham: My Lords, I hope that I said in my remarks that I understood what the recommendation was and that we would look at it further. It is almost inconceivable that a recommendation from that committee would be ignored.

Lord Greaves: My Lords, I shall comment briefly on the consultation amendments in my name, Amendments 16 and 17. The noble Baroness said that they would gold-plate the legislation. As I understand it, they would simply put this legislation on the same basis as the Legislative and Regulatory Reform Act and the Public Bodies Bill, which was in this House only recently. I am tempted to ask why those pieces of legislation were gold-plated. I hope that this might be looked at again.

The noble Baroness also said that adding a requirement for consultation with representatives of people who are likely to be affected could restrict the amount of consultation that took place, but as it would be an additional requirement-the requirements in the Bill would not be changed at all-and would include the words,

it is difficult to see how it would restrict anything. It would simply extend the amount of thought that the Secretary of State would have to give to exactly who is being consulted and provide a bit of guidance to him. The two arguments that the Minister has put forward seem a bit weak. When Hansard comes out tomorrow, I will read exactly what was said, but I think that it would be no skin off anybody's back to accept the amendments.

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Finally, I asked why the words "if any" had been added to the similar provisions in other legislation that this is based on. Perhaps the Minister will write to me and explain the significance of that.

7 pm

Lord Beecham: My Lords, I am sorry that I disappoint the noble Lord, Lord Newton, by my uncharacteristically diffident approach to this legislation. I shall try to repair that omission. I was trying to give the Government some credit for responding to concerns raised in another place about Clause 5(1) in particular. Incidentally, the long list of statutory provisions in Amendment 14 was derived from those tabled in another place. The noble Lord is right to say that there are many more statutory provisions that could be disapplied or to which the legislation might extend. I think that the number is 1,296, but there is a formidable list here.

However, that is not the only concern. In particular, Clause 5(3) does not relate to dispensing powers; it is a simple provision, which says:

"The Secretary of State may by order make provision preventing local authorities from doing, in exercise of the general power, anything which is specified, or is of a description specified, in the order".

In other words, the Secretary of State takes power to disapply the general power of competence on whatever topic and in whatever form he fancies. That is a very different proposition from one that seeks to allow a disapplying power to permit and facilitate the exercise of the general power of competence and it is completely unsatisfactory. It is a remarkable proposition: the Secretary of State seeks to give a power to do anything unless he objects. It is the political equivalent of Henry Ford's "You can have any colour as long as it's black". Of course, Henry Ford inspired Aldous Huxley's Brave New World-Fordism is the theme that runs through the book. The title of Brave New World, of course, is not inappropriately derived from "The Tempest". Noble Lords will recall Caliban's wandering gaze:

"O brave new world, That has such people in't!".

Well, it is not a brave new world that has such propositions in it. I hope, again, that the Government will look not only at Clause 5(1) and the matters deriving from that, but, in particular, at the sweeping powers under Clause 5(3) which can apply under subsection (5) to,

I suppose that means particular classes of local authority.

In replying and endeavouring to be helpful, as of course she does, the noble Baroness indicates that the Government will expect to use these discretionary powers only to deal with particular actions of local authorities which cannot at this point be identified. She referred to "novel financial transactions". Well, I suppose that a local authority could engage in a novel financial transaction now. It would have to ensure that it was legal, and if it was not legal it could be challenged. It is not at all appropriate to have as sweeping a power as this against unknown and unknowable possible future activities of local authorities. If the Government are particularly concerned about financial transactions, why do they not, for the avoidance of doubt, make that a category in the Bill? But they do not, because the power is simply unlimited.

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There are also some issues around the drafting. I appreciate that there are difficulties with the drafting, but when Clause 6 says,

what does that mean? What is a "necessary protection"? It is presumably necessary, or not, in the eyes of the Secretary of State. All of that confirms the undesirability of the procedure, about which the noble Lords, Lord Jenkin and Lord Newton, have been rightly exercised, being of a negative kind as opposed to an affirmative resolution.

Again, I hope that the Government will look at this matter. The noble Lord, Lord Newton, rightly referred to the Government's wise second thoughts on the Public Bodies Bill, and there are certain parallels here. I hope that the Government will take seriously the substantial objections, both to the process and also, in particular, to the thrust of Clause 5(3), which, as I said in moving the amendment, contradicts the whole spirit of a general power of competence that many of us applaud and would be glad to see in the Bill. If the Government want to achieve their reputation for promoting localism, they need to review and revise the procedures and principles set out in this clause. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendments 13 to 18 not moved.

Clause 5 agreed.

Earl Attlee: In moving that the House be resumed, perhaps I may suggest that the Committee stage begins again not before 8.04 pm. The Committee will be aware that the House will have to debate a Statement and a Question for Short Debate, so the Committee may possibly resume a little later than but no earlier than the time I stated.

House resumed. Committee to begin again not before 8.04 pm.

Greece: Default Contingency


7.05 pm

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, I shall now repeat a Statement that has been made in another place by my honourable friend the Financial Secretary to the Treasury. The Statement is as follows:

"Honourable Members will be aware of the recent developments in Greece. There has been considerable media speculation about what this means for the Greek adjustment programme and potential market reactions. I am not going to engage in speculation on what may or may not happen, but give the House an account of the facts as they currently stand.

Let me begin with some background on Greece and the financial assistance package. The international financial assistance package for Greece was agreed in May 2010. The package is composed of two elements:

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a loan of €30 billion from the International Monetary Fund, and €80 billion of bilateral loans from euro area member states. Although they were created at a similar time, neither the EFSM, which is backed by the EU budget, or the euro area-only EFSF contributed to the package for Greece. The adjustment package requires Greece to undertake significant adjustment efforts.

There are some very difficult questions that Greece has to address now, because of the assumption when the package was put into place that Greece would be able to access market funding again in 2012, which looks unlikely in current market conditions. The House will also be aware of political developments in Greece and that a new Cabinet has been appointed; the Government will soon be subject to a vote of confidence in the Greek Parliament. The Greek Parliament will also be voting on a medium-term fiscal strategy, which is a key element of the conditions attached to the current adjustment programme, later this month.

Against this backdrop, the euro area member states have been discussing next steps. The euro group released a statement today calling on,

The statement also said that Ministers will,

This is a statement from the euro area member states. Let me be clear: the UK has not been involved in those discussions. We are not participating directly in the May 2010 package of support for Greece and there has been no formal suggestion either of UK bilateral loans or for use of the European financial stabilisation mechanism, which is backed by the EU budget. The UK only participated in the May 2010 package for Greece through its membership of the IMF. So the burden of providing finance to Greece is shared between the IMF and euro area member states, and we fully expect this to continue. Our position on this is well understood in the euro area.

The UK believes that the international community needs a strong International Monetary Fund as an anchor of global economic stability and prosperity, and over the past few years we have seen how important that role can be in times of crises as the IMF has taken swift and decisive action to support the global economy. There is of course no room for complacency. The Treasury, together with the Bank of England and the FSA, is monitoring the financial system, including the euro area, on an ongoing basis. Many scenarios are considered as part of the normal policy development process, but honourable Members will agree that it would not be appropriate for me to be discussing the detail of those scenarios. May I also remind honourable Members that UK banks have little direct exposure to Greece?

The continuing uncertainty in the euro area is also a reminder of the benefits of taking early action to stabilise and recapitalise the banks, as the UK has done. The UK banking system has developed a strong capital position, which has allowed it to become more resilient and will help insure it against future risks. UK banks have made good progress in sourcing funding despite difficult market conditions.

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The difficulties faced by eurozone countries such as Greece and Portugal reinforce why it is right to pursue the course we set last year to tackle the deficit. The House should reflect that our deficit is larger than that of Portugal, but our market rates are similar to those of Germany. The action we have taken to strengthen the country's finances stands us in good stead during this period of instability in the eurozone. No one on either side of this House should lose sight of the importance of these decisions in protecting the UK economy".

My Lords, that concludes the Statement.

7.09 pm

Lord Eatwell: My Lords, I am most grateful to the noble Lord for repeating as a Statement the answer to an Urgent Question given by the Financial Secretary in another place. I must begin by congratulating him on the feat of speaking for a full four and a half minutes without referring for a moment to the substance of the Question asked. However, he still has some way to go before acquiring the skills of Mr Alan Greenspan, who famously qualified his speeches when chairman of the Federal Reserve by declaring that, "If anyone understood me, I misspoke".

Of course, everyone will agree that we live in dangerous financial times and it is incumbent on all those in authority to take care when commenting on market-sensitive information, even to the extent of not answering legitimate parliamentary questions. However, the other fundamental aspect of these uncertain times is that it is important to plan for the worst, even as we hope that it will not happen. Assurance that the Government are indeed planning for the worst will enhance rather than reduce market confidence. Without going into any analytical detail, will the noble Lord tell us what is the Treasury's current worst-case estimate of the potential exposure of UK financial institutions should there be a disorderly Greek default? Even if he will not answer that question, in the event of market disorder will the present Government stand behind UK financial institutions as the previous Government did? Any worst-case estimate should not, of course, refer just to direct exposure to Greek sovereign and private debt, as the noble Lord did just now, but to the exposure to other jurisdictions that might reasonably be assumed to suffer contagion from a Greek default. Just as the collapse of Lehman Brothers inflicted such a shock on the western financial system that the wholesale funding markets froze, pushing major banks into insolvency from which they had to be rescued by the state, so in similar fashion a default in Greece could produce knock-on effects. Of course, all these effects may already be priced into the market-we hope that they are-but we must plan for the worst.

As the noble Lord will be aware, Mr Michael Cohrs, a member of the new Financial Policy Committee of the Bank of England, has stated that what keeps him awake at night is the interconnectedness of the system, which could create ripple effects in financial markets throughout Europe and beyond. Without referring to any particular market or giving any other detail, what is the Treasury's worst-case estimate of the scale of those ripple effects as they might impact the UK?

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We also learnt from the Lehman collapse that the consequential fall in bank lending to households and industry-Lehman had been growing at more than 20 per cent a year and then ceased to grow at all-resulted in a fall in GDP from which the UK still has not recovered and, again in consequence, led to a sharp rise in the Government deficit. What contingency measures have the Government put in place to ensure that lending to industry and households will not be cut in the face of any market turmoil produced by a Greek default? Industry in particular needs to be confident that lending will be available at reasonable cost. Will the Minister guarantee that at the very least the lending targets of Project Merlin will be attained? If the eurozone economic problems put upward pressure on the UK deficit, will the Government revise their deficit reduction policy?

Finally, given the potential damage to the UK economy of financial disorder in the eurozone, does the Minister accept that it is very disturbing that Her Majesty's Government seem to take pride in the fact that they are playing no part in the development of UK policies that will minimise future damage to the UK? Is it not time for the Government to be more proactive in Europe in pursuit of Britain's best interests?

7.13 pm

Lord Sassoon: My Lords, I shall try to respond to the noble Lord's questions one by one. First, he asked about the exposure of UK banks to Greece-not only the direct exposure but the wider exposure. It is important to recognise that the exposure of the UK banks to Greece is modest relative to that of other countries. For example, the exposure of the UK banks to the Greek public sector is $4 billion, which compares with the $22.7 billion exposure of the German banks to the Greek public sector. The total exposure of the UK banking system to Greece, including other credit commitments, is of the order of $19.2 billion. To put it into context, that compares with outstanding credit commitments to Portugal of more than €30 billion and to Ireland of the order of €180 billion.

I will not comment on what the ripple effects might be. In repeating my honourable friend's Statement that the Treasury, the Bank and the FSA are running a whole range of scenarios against which we test the resilience of the UK system at any one time, I refer the noble Lord, Lord Eatwell, and other noble Lords to the financial stability report-the regular six-monthly report-that will be forthcoming from the Bank of England within the next few days, which will no doubt give an updated assessment in the wider context of how the Bank sees these matters.

On the question of contingency measures, the critical issue here is that the UK banks have been recapitalised and have been through stringent stress tests. They continue to be subjected to the appropriate stress tests by the FSA. They are in a strong position. The Merlin agreement has been signed. It is a much more comprehensive agreement than anything that the previous Government had to ensure the continuing flow of credit, particularly to small and medium-sized enterprises. I agree with the noble Lord that this is a critical issue. There is absolutely no suggestion that any of the events that we are talking about in Greece

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will have a direct impact on the ability of the banks to rise to the commitment they have made in the Merlin agreement.

The other thing that is absolutely critical here is that the UK continues to retain the utmost confidence of the international markets. The fact that interest rates on the 10-year benchmark gilt are this evening standing at 3.22 per cent, with spreads that have narrowed against the benchmark German bund since the general election, shows the confidence that the international markets have in the strong position of the UK. Those low interest rates enable the banks to fund themselves and to lend on to British small and medium-sized enterprises in order to underpin the recovery of the economy.

That takes me directly to deficit reduction. I am very grateful to the noble Lord for feeding me the lines which make the critical points, because it is only as a result of sticking to the deficit reduction plan that we have the low interest rates that mean that our businesses can be supported by the banks in this very difficult international climate. If we were doing what the shadow Chancellor proposed last week-unfunded tax reductions which would cost £51 billion over the lifetime of this Parliament-we would very soon lose the confidence of the international markets, our interest rates would zoom upwards and our banks and, indeed, individual lenders would be in a very serious position. Therefore, we will stick to our deficit reduction plan, as recently endorsed by the IMF in its latest report.

The noble Lord referred to our position in Europe and our contribution to the debate. Noble Lords who were present for our very interesting debate on Thursday of last week on your Lordships' European Union Committee's report on EU economic governance will have heard me explain at length how we are fully involved at every stage in discussions to make sure that the eurozone arrangements strengthen fiscal governance and that we drive forward the wider market reforms of the 2020 vision. The UK is absolutely central to discussions ensuring that what we need in Europe to get us out of the weak situation that others are in-this applies inside or outside the eurozone, but particularly within it-are the market reforms that will bring sustainable growth and ensure that we do not have these sorts of Greek problems into the future.

7.21 pm

Lord Hamilton of Epsom: My Lords, would my noble friend like to comment on press reports that Standard Chartered Bank is ceasing to be involved in short-term interbank transfers with European banks? Does he believe that to be true? Is it happening with other British banks? If so, what are the implications?

Lord Sassoon: My Lords, I am not going to comment on what is going on in the markets and with individual banks at all, and I am sure that my noble friend would not expect me to. However, I would make the point, which was also made in the Statement, that UK banks have been able, in very tough market conditions, to improve their funding position very considerably over the past year and more. The overall situation of the interbank market is far better-although we should

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not take any of these things for granted-than it has been at points during the financial crisis. It is therefore important, as my noble friend reminds us, that confidence within the banking system enables there to be liquidity. As I say, we are in a much better position in that respect than we were during the financial crisis itself.

Lord Myners: My Lords, I start by congratulating the Minister on taking longer to answer questions than he did to repeat the Statement given by his honourable friend in the other place. One might suggest that the reason we have low interest rates and banks are not lending is more to do with the fact that the economy is moving back towards recession than for the reasons that the Minister gave. Let me ask three short questions that I think can be answered by short and quite factual answers. First, have the Government absolutely ruled out any use of the EFSM in support of Greece or any other European nation, over and above the commitments already made? Secondly, has the Bank of England accepted Greek sovereign credit as collateral for loans made by the Bank of England to the European Central Bank, and therefore for loans on which the Bank of England is exposed? Thirdly, are we as a country exposed to the need to recapitalise the ECB should Greece default on its sovereign debt?

Lord Sassoon: On the role of the EFSM, I would refer the noble Lord to the words of the French Finance Minister, Christine Lagarde, when recently interviewed on the BBC. She talked about the package for Greece being one of bilateral loans, and she saw the likelihood of any future support for Greece as a continuation of that bilateral arrangement. So there has been no question of using the EFSM in the context of Greece. As for the question on the Bank of England, I am certainly not going answer for what the Bank of England does or does not take in-nor would the noble Lord, Lord Myners, for one minute begin to think that I would start answering questions about the bank's collateral policies. As to the capitalisation of the ECB, that is an entirely hypothetical question, as the noble Lord knows full well.

Lord Higgins: My Lords, is it not apparent that the Greek economy cannot become competitive in the foreseeable future at its present exchange rate? Greece will be condemned to an endless succession of deflation and bailout unless it leaves the euro. Is it therefore not extremely important that discussions by the British Government and in the European Community should take place on how to minimise any collateral damage should that come to pass?

Lord Sassoon: My Lords, I am not sure that I entirely accept my noble friend's starting premise. The position is that Greece is a member of the eurozone, and the eurozone will continue to be the eurozone. We want to see the strengthening of fiscal and economic discipline within that zone. When the IMF put together and led the programme that Greece signed up to-which had elements of fiscal consolidation, structural fiscal reform and wider structural reform-it was done precisely in the context of Greece continuing to be a member of

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the eurozone, and that is the continuing position. The package has been put together and the new Government have some decisions to take. The IMF is coming up to its regular review before the next drawdown of the package, but that is entirely in the context of Greece being able to finance itself on an ongoing basis within the eurozone.

Lord Lamont of Lerwick: Has my noble friend seen the extraordinary anti-German graffiti and the slogans being shouted by the crowds in Athens? Does that not illustrate what Professor Martin Feldstein, the Nobel prize-winning economist at Harvard, has always said-that the euro, far from bringing countries together, increases tensions between them? Can my noble friend also explain what sense there is in Ireland and Greece borrowing more money to lend to Portugal, and Ireland and Portugal borrowing more money to lend to Greece?

Lord Sassoon: My Lords, I have not been on the streets of Greece or seen what is going on in Athens, but clearly it is regrettable if anti-German sentiments are being expressed on the streets there. However, I have not been following the detail of the riots. The main thing is that we need to support the Greek Government and encourage them, as the eurozone Ministers have done in their statement today, to progress their package and enable the IMF to complete the upcoming assessment. As for the second-order effects of who needs capital where in order for loans to flow, my noble friend reinforces the point that this is a very interconnected system and the ongoing work on the short-term and medium-term stability of the eurozone has to be mindful-as we have been reminded already this evening-of the interconnectedness of the systems at every level.

Lord Davies of Stamford: My Lords, is it not the case that this is not a euro crisis, as many commentators have been trying to pretend, but a Greek funding and fiscal crisis caused by excessive borrowing by the Greeks, irresponsible lending and mispricing of risk by lenders? It is not the first time that we have seen that in the past year or two. Does the Minister agree that this would have arisen irrespective of the currency that Greece happened to have? It would have happened whether Greece had been in the dollar zone or the pound sterling zone or still had the drachma. Secondly, to avoid the risk of a considerable panic, is not a renegotiated package for Greece necessary, providing for an orderly restructuring of its debts, a credible series of repayments and a set of definite figures for offsets and provisions by Greece's creditors? Is it not time that we began to think in those terms? Thirdly, is it not the case that Greece leaving the euro or a Greek devaluation is the opposite of what is required? If Greece went back to the drachma, it would of course greatly enhance the value of its euro debts-and its debts are primarily in euros-but that would increase the burden on Greece and increase the portion of Greek assets that overseas lenders and investors would have to write off. Such a move would be counterproductive and damaging from our point of view as well. Moreover, devaluation never works as a stimulus to growth unless wage bargainers are under monetary illusion and cannot tell the difference

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between nominal and real wages and do not ask to be compensated for the reduction in real purchasing power. That is a most unlikely situation for Greece at the present time.

Lord Sassoon: I agree with the noble Lord, Lord Davies of Stamford, that if the UK continued with the excessive deficit policies of the previous Government, we would be in a terrible mess in this country. Whether you are in or out of the euro makes no difference, and the UK would be experiencing considerable problems if we had not gripped the deficit. I agree with the implication of his analysis on that point. On the second question about sustainable financing, that is precisely where the IMF starts its assessment of debt sustainability. The critical first plank of sustainability for Greek debt hinges on Greece sticking to its agreed fiscal consolidation path. All else flows from that. As for the Greeks or anyone else leaving the euro, that is a hypothetical question and not one that we should spend any time on.

Lord Newby: Does the Minister agree that it is critical not just for Greece but for the UK economy that there is not a disorderly Greek default? In that circumstance, does he agree that the least worst option in what is a difficult situation is to agree an orderly re-profiling of Greek debt? If so, will the Government support moves by the eurozone Finance Ministers to bring about such a re-profiling?

Lord Sassoon: I certainly agree with my noble friend that the last thing anyone wants is disorder, whether default or anything else. As I made clear, the next steps are, first, a question for the eurozone itself. We are not directly involved in the eurozone discussions. To address my noble friend's point, the statement from the euro group today reads:

"Ministers agreed that the required additional funding will be financed through both official and private sources and welcome the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing Greek debt at maturity for a substantial reduction of the required year-by-year funding within the programme, while avoiding a selective default for Greece".

As I said, that is a matter for the eurozone Ministers, but I think that they are addressing the issue in the way that my noble friend suggests.

Lord Lea of Crondall: Would the Minister care to remind the House of the percentage of, first, the euro area, and, secondly, of the European Economic Area, of which we are a part, which is constituted by the Greek economy? I would not say that it is peanuts, but is it not a rather low percentage? If Europe wished to, could it not help to restructure the Greek economy-with stringent terms, by the way? Would not the whole House stand behind that policy agreed around Europe and say that we want it to work-God's speed, we want it to work? Are there not some Members of the House who do not want it to work?

Lord Sassoon: I am happy to confirm that Greece is a relatively small part of the euro area but, as we have already identified this afternoon, Greece is interconnected,

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as are all the European and global financial markets. Therefore, one should not in any way trivialise the Greek situation and the capacity for difficulties in the markets.

That said, it is also important to be clear about the lines around whether the UK should or should not be involved in these matters. We are not a member of the eurozone; we are not going into the eurozone; and we are not going to make any preparations to enter the eurozone in the lifetime of this Government, this Parliament. We must make sure that, on the one hand, we are not part of any ongoing and permanent support mechanism for the eurozone; at the same time, we have to play a full part to ensure that the eurozone economic governance is fit for purpose.

Lord Flight: Does my noble friend agree that if relatively less or more successful countries or economic areas are to share a currency, there is a requirement for substantial ongoing transfer payments, as is the case within the US and even within the UK? Secondly, does he by any chance know roughly what proportion of Britain's exports to the eurozone are to what I would call hard northern Europe, compared to softer southern Europe?

Lord Sassoon: I am not able off the top of my head to break down the analysis of our exports, and I am not quite sure where my noble friend would draw the line between hard and soft. The critical point here is that more than 40 per cent of our exports go into the eurozone. Of course, they are generally distributed in relation to the size of economies, with Ireland, as we discussed in relation to the Irish package, having for historical reasons a disproportionately large share. My noble friend makes the point that it is absolutely in the UK's interest to ensure that the eurozone economies are successful, because that is where the largest part of our exports go.

Baroness Noakes: Does my noble friend think that a new set of arrangements made within the euro area by the IMF for Greece will work this time? It did not work last time. Unless there is some confidence that new arrangements made to support Greece will work, in the sense that they can restore the Greek economy-there is very little sign that the Greeks are able to take any medicine which would restore it to health-would we not be better served by working within Europe to help our European friends understand that letting Greece remove itself from the eurozone and take the default that it clearly is in is in everybody's interest?

Lord Sassoon: My noble friend Lady Noakes asks a very good question. It is inevitable that people will ask: was the package appropriate? One should take comfort from the fact that the IMF has a long and successful record of implementing restructuring programmes. The IMF programme for Greece was put in place in market conditions and with a market outlook somewhat different from that which Greece and the eurozone subsequently encountered. The first requirement is for the Greek Government to be encouraged to get back on track, to stick to the agreed

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fiscal consolidation path. Beyond that, it is for the IMF to see what needs to be done. The key thing is for the original plan to be back on track. I therefore think that we should not at this point second-guess whether the plan is or is not appropriate.

I will not be drawn into whether the Greek situation would be better in one hypothetical scenario or another.

Lord Tugendhat: My Lords, does the noble Lord agree that, however brave the Greek Prime Minister is -he has shown extraordinary guts and determination-and however much a new Greek Government might wish to pursue the austerity programme and the conditions being laid down, there must be room for doubt whether any Greek Government can secure the degree of self-discipline within the country that would enable them to meet the conditions of the IMF and of the other European countries? That being the case, does the noble Lord not agree that the great interest of the United Kingdom Government lies in co-operating as closely as possible with our eurozone partners in putting together contingency plans to meet whatever eventuality may occur, because the Greek Government are extremely unlikely to be able to live up to their promises?

Lord Sassoon: My Lords, I am not going to be drawn by my noble friend Lord Tugendhat into giving a commentary on Greek politics, which I am not qualified, in any case, to do. However, the Greek Parliament will hold a vote of confidence on the new Government very soon-I believe that it may be tomorrow. Critically, the Greek Parliament will vote on a medium-term fiscal strategy consistent with the agreement into which they have entered. That vote in the Parliament is expected to be later this month. I think that it would be wrong to question the commitment of the Greek Government and Parliament to the package. On contingencies and close co-operation, I can only confirm that, either in terms of what is being done by the authorities in the UK or in co-operation with our European partners, we will certainly look at a wide range of contingency plans and scenarios.

Biological Diversity

Question for Short Debate

7.40 pm

Asked By The Earl of Selborne

The Earl of Selborne: My Lords, I start this short debate on the Convention on Biological Diversity by declaring my interest as chairman of the Living With Environmental Change partnership and by thanking those who put their name down to speak this evening.

The recent natural environment White Paper, entitled The Natural Choice: Securing the Value of Nature, describes the 2010 Conference of the Parties to the

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Convention on Biological Diversity, held in Nagoya, Japan, as historic. We all hope that this will prove an accurate assessment and that the outcomes over the next decade deliver a new international deal to protect and enhance biodiversity and ecosystems.

The conference emphasised the value of the natural environment to human welfare and livelihoods and stressed the link between action on biodiversity, climate change and development. We all fervently hope that its new global vision will be achieved. This is stated as follows:

"By 2050, biodiversity is valued, conserved, restored and wisely used, maintaining ecosystem services, sustaining a healthy planet and delivering benefits essential for all people."

The parties also agreed on a shorter-term ambition, which was to:

"Take effective and urgent action to halt the loss of biodiversity in order to ensure that by 2020 ecosystems are resilient and continue to provide essential services, thereby securing the planet's variety of life, and contributing to human well-being, and poverty eradication".

To achieve this, the parties agreed on 20 targets and five strategic goals. These commendable aspirations, however, have to be put into the context of the failure of Governments to meet the previous target, which over the previous 10 years was to achieve a significant reduction in the rate of biodiversity loss by 2010.

The convention's report, Global Biodiversity Outlook 3, pointed out the failure to do anything of the sort. It warns of critical tipping points that could lead to large-scale rapid changes causing potentially irreversible damage to ecosystem services. The question is therefore whether this new strategic plan, with its 20 targets, will prove more effective.

In summary, the new strategic plan emphasises the need for effective and urgent actions, appropriate and effective policies and evidence-based decision-making. Each member state is required to develop a natural strategy in line with the strategic plan, integrating sustainable resource use across all sectors of policy and meeting biodiversity targets.

We missed our targets up to 2010 because of a basic lack of understanding among Governments about the value of nature and the long-term benefits to be derived from its protection. There was a lack of public awareness of how ecosystem functions contribute to human welfare and of their benefits, including goods and services, some of which can be valued economically and others that have a non-economic value. Ecosystem services, such as soil formation, nutrient cycling, flood hazard reduction, water purification and air pollution reduction are all underpinned by biodiversity, and the level and stability of ecosystem services generally improve with increasing levels of biodiversity.

Earlier this month, the UK National Ecosystem Assessment was published by the Government. It was a collaboration of scientists from a number of Living With Environmental Change partners, and could prove to be a massively helpful tool to help decision-makers in government, business and society put in place long-term measures to protect and enhance our ecosystem services, including our biodiversity. Both this report and the recent White Paper are important developments that point in the right direction.

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A third document to be launched later this month is the England Biodiversity Strategy, which is to be followed by strategies from the devolved Administrations. Tomorrow, the European Union Environment Ministers will, we hope, adopt the EU biodiversity strategy. Here is a plethora of strategies and documents, and they will all have to spell out just how we are going to deliver on the Nagoya commitments.

Of the 20 targets, I will refer to just a few. Target 6 requires all fish stocks to be managed and harvested sustainably, and target 7 requires areas under agriculture and forestry to be managed to ensure conservation of biodiversity. We could have a full debate on the implications for the common agricultural policy and the common fisheries policy, as perhaps we should, but clearly the EU biodiversity strategy will have to come up with some convincing reasons why that might become a reality.

Target 9, which concerns invasive alien species, is of particular relevance to our overseas territories, in a number of which the accidental importation of species, such as rats, has caused serious damage to the indigenous wildlife: for example, ground-nesting birds. Indeed, programmes are already in place in some of our overseas territories to eliminate such pests, but more programmes will clearly be essential if we are to meet our obligations under this target.

Target 15 commits Governments to restoring 15 per cent of degraded ecosystems by 2020, and the White Paper accepts this commitment. There will have to be a clear evidence-based assessment of what constitutes a degraded ecosystem and an inclusive procedure, by which I mean it should include as many people as possible in the process of determining priorities for restoration.

A key outcome was the Nagoya protocol on access to genetic resources and the sharing of benefits arising from their use. Access and benefit-sharing provisions are critical to countries with exploitable genetic material. Very often that means developing countries, which must at all costs protect their intellectual property. Access agreements are also very important to our national centres of excellence such as the Royal Botanic Gardens, Kew and the Natural History Museum. Kew's core business is to collect and research plant diversity for conservation purposes and to enhance the sustainable use of plants. The Nagoya protocol encourages research that contributes to conservation and the sustainable use of biodiversity through the establishment of simplified measures for non-commercial research. This protocol is to be welcomed, and particularly the intention to simplify measures for non-commercial research.

Again, whether all this will be practical will depend on whether Governments, the business community and society at large understand and value our biodiversity. In this country, we are short of taxonomists, which means that for many species we lack experts who can identify species before they face extinction. The House of Lords Science and Technology Committee has, on three occasions, reported on the need for a national programme to support systematics and taxonomy. There are now grounds for believing that government departments, research councils and the taxonomic community itself are addressing this serious issue. We

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need to engage the enthusiasm of both urban and rural populations. I pay tribute to such organisations as the open air laboratories, OPAL, which enlist the wider public in such projects as the bugs count undertaken with the Natural History Museum.

The environment White Paper pledges the Government to invest £1.2 million to support the development of the National Biodiversity Network. This network collates a vast amount of records provided largely by knowledgeable volunteers and local organisations around the country, a highly cost-effective way of generating essential data. The long-term support for the National Biodiversity Network is of key importance if we are to meet our targets.

Above all, we need to encourage a new generation of naturalists. We need to ensure that in these difficult times public funds are still available for local museums and natural history societies so that we can continue to generate these biological records.

I look forward to hearing from the Minister that the natural environment White Paper will be followed up by policies and actions that will ensure that by 2020 we have indeed met these challenging targets.

7.50 pm

Baroness Hilton of Eggardon: My Lords, I have to declare an interest as a trustee of the Pond Conservation Trust. Freshwater is one of the most extensively exploited and vulnerable parts of the environment. That vulnerability has been further exposed by the drought that we have experienced this spring. Moreover, the harsh spell of weather that we had before Christmas, with record low temperatures, led to many frozen ponds and streams, and so further jeopardised the wildlife that is dependent on freshwater.

In the past 20 years, huge investment has gone into attempts to improve the quality of our rivers, but there has been little improvement in the biological condition of those rivers. About one-third of the monitored length of our rivers is not in a good biological condition due to such things as industrial pollution and fertiliser run-off from farmland. Over the next 20 years, a further £20 million will be spent to protect freshwater ecosystems through agri-environment schemes, investments in the infrastructure of the water industry and in conservation grants. However, ponds, a major reservoir of freshwater diversity, continue to decline in quality.

The Government's White Paper on the natural environment, published this month, says,

"They are often overlooked but small water bodies such as ponds and ditches play a critical role in supporting ecosystems ... Ponds alone support 70% of freshwater biodiversity and more endangered species than lakes, rivers, streams or ditches".

Inevitably, government schemes to protect the environment will tend to be large-scale, such as the landscape-scale works recommended in the Lawton review, but ponds are essentially small-scale and local. The Pond Conservation Trust has since 2008, in company with local people and various partners, helped to create 1,600 new ponds, 420 of which are specifically for biodiversity action plan species. This project has also helped to change attitudes and has been used as an example of good practice by NGOs and by the Government.

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However, work such as this cannot depend on local efforts alone, but needs to be underpinned by appropriate science and government policy. I want to ask the Minister two questions. Is he satisfied that the freshwater science base of this country is sufficient to provide the evidence needed by policy-makers to protect and ensure freshwater biodiversity? It is not just the species that depend on water directly-such as frogs, toads, newts, dragonflies and various plants and invertebrates-but also birds and bats, mammals such as voles and otters, and reptiles such as grass snakes. Secondly, as new schemes are introduced, are effective monitoring systems in place to determine which schemes are successful and cost-effective?

7.54 pm

Baroness Parminter: My Lords, I congratulate my noble friend Lord Selborne on introducing this debate in such a timely manner, given that tomorrow the Environment Council meets to discuss the EU's biodiversity strategy till 2020. That meeting of EU Environment Ministers will be an important test of resolve in meeting the commitments agreed at Nagoya last year to meet the huge biodiversity challenges that we face.

I applaud the Government on the welcome they have given to the development of an EU biodiversity strategy and hope that tomorrow the targets suggested by the Commission in the draft strategy are adopted. In particular, I welcome the actions suggested by the Commission relating to the sustainable use of fisheries resources, including the gradual elimination of discards. Only today, a report to be debated at the UN from the panel convened by the International Programme on the State of the Oceans warned that ocean life is at a high risk of entering a phase of extinction of marine species unprecedented in human history.

We must stop exploitative overfishing now, and so it is vital that the reference to achieving maximum sustainable yields of fish by 2015 is retained in the EU's biodiversity strategy. If removed, our efforts-and I commend the Government's initiatives to date on this-to secure ambitious reform of the common fisheries policy are entirely undermined. They are undermined even before the starting gun on the reform of the CFP is fired in the next couple of weeks. Therefore I very much hope that our representative at tomorrow's meeting will be pushing back hard on those countries, including France and Spain, which are pushing for the removal of this reference to stop overfishing.

I welcome the draft EU biodiversity strategy, but it mentions only in passing the key issue of financing biodiversity protection. Clearly, if we are to make a reality of the Nagoya conference goals, finance is key. It was this House's EU Select Committee report on the EU financial framework from 2014 that recommended that biodiversity protection be mainstreamed through all the relevant funding instruments, especially the CAP, and that it be reflected in the framework itself.

Given that the Commission's proposals for the new framework are due out next week, I would be keen to hear from the Minister whether the Government agree that the EU's commitment in the area of biodiversity should be reflected in the framework. However, any financing available through the EU budget is going to

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be small compared to that required to meet the scale of the challenge. Two weeks ago in the welcome natural environment White Paper, the possibility of financing biodiversity protection through biodiversity offsets was raised. The Government propose to establish a new voluntary approach to biodiversity offsets and to test that approach in pilot areas.

Biodiversity offsetting schemes have been in existence in other parts of the world for some time. All the evidence from these is that such schemes must be well designed. Successful existing schemes, notably those in the US and Australia, generally involve an impartial oversight body. Their function is to monitor the size and quality of the offsets, making sure that they are calculated properly so that offset sites are ecologically similar and deliver an amount of biodiversity adequate to offset the impacts. They help developers to know how many credits, and crucially which type, they need by transparent calculation of offset needs or debits. Key to the scheme's success is rigorous methodology to determine what trade-offs are appropriate or allowable.

I support the Government's decision to pilot biodiversity offsetting so as to test and refine the operation, but I do question whether a voluntary scheme will generate enough interest to establish a viable biodiversity market. Moreover, I question whether a locally managed scheme where the approach to be taken,

to quote from the White Paper, will have the necessary rigour to deliver the desired "no net loss" biodiversity outcomes. As such, perhaps I could invite the Minister to say a few words about how the Government intend to help with the design of the various schemes in the pilots as details in the White Paper are rather thin. This is a crucial part of how the Government are going to be taking forward our biodiversity commitments.

I say again that this is an extremely timely debate. Maintaining healthy, viable ecosystems over the long term is crucial to human well-being and to the survival of our planet. To that end, it is vital that we have a large-scale strategic vision, such as that drawn up at Nagoya, as well as clarity on how it will be delivered at the European, national and local levels so that we can better deliver the necessary biodiversity protection.

8 pm

Lord Gardiner of Kimble: My Lords, I, too, congratulate my noble friend on securing this important debate. The Nagoya protocol rightly relates to global issues, but I will concentrate on the effective implementation of the agreement in the UK. I therefore declare an interest as executive director of the Countryside Alliance, as well as a farming one.

This country should show leadership not only internationally but within the European Union to protect and enhance natural assets and to promote environmentally sustainable growth. I am pleased that the Government's natural environment White Paper seeks to address many of these issues. However, I hope that I am not being too ungenerous by saying that one has to wade through amounts of jargon and suggestions of new bodies being set up to try to discover what we can do practically in our towns, suburbs and countryside

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to achieve economic growth in an environmentally sympathetic way and to adhere to the principles of Nagoya.

I am well aware that this country may be a small cog in the global environment, but we are significant because we should and can lead from the front. This is an area where, collaborating closely with our European and Commonwealth partners, we can force the pace. We can do so much in urban areas to make a significant contribution not only to biodiversity but to the quality of life of the residents and workforce of our cities and towns. Companies and institutions should play their part in bringing a greener infrastructure to urban areas. Everyone with a garden-large or small, window box or terrace-can also play their part. The noble Baroness, Lady Hilton of Eggardon, gave us a lead on why our ponds and water courses are so vital.

I turn to matters rural, for it is here that much of Nagoya in the UK will be achieved. With more than 70 per cent of the UK managed by rural communities, farmers and land managers play a crucial role for the nation in so many regards such as water supply, flora and fauna, food production and landscape. We need increasingly to ensure that we produce enough food in this country, as food security becomes an ever higher priority in public policy. There is of course a range of professionals who have cared for the land over many generations. The Government should back them in this role.

When it comes to halting declines in habitats and species-a key objective in the Nagoya agreement-one needs to look no further than the uplands of the north of England. There, heather moorland that has been managed for grouse shooting has been responsible for making the greatest contribution to the improvement in the environmental health of the country's outstanding wildlife and geological sites. Sites of specific scientific interest cover more than 2 million acres of the land surface of England, and provide vital and extensive refuges for wildlife and essential free natural resources for people. Today, 96 per cent of grouse moors are in a favourable or recovering condition. The support of upland landowners and grouse moor managers has been crucial in achieving this goal. Moorland managed for grouse shooting accounts for some 850,000 acres of uplands, 60 per cent of all upland SSSIs and nearly one-fifth of all England's SSSI land.

What is either not known or overlooked is that the majority of that management is carried out at the private expense of the land manager. The rural community of this country has a long track record of working in harmony with nature. Since the Moorland Association was formed 25 years ago, members have regenerated and recovered more than 217,000 acres-including 57,000 in the past decade-thereby exceeding the Government's 2010 conservation target by 170 per cent. Grouse moor owners have shown that they have the ability to achieve this at their own cost, but it should be with the Government's backing.

It may be an inconvenient truth for some, but it is the case that the hare was in its most abundant numbers when its habitat was managed for coursing and hare hunting; the red deer herd on Exmoor was one of the finest in the world because of the management undertaken

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by the three packs of staghounds; and the fox was best managed and looked after when the species was considered quarry rather than vermin. The White Paper claims that:

"Nature is sometimes taken for granted and undervalued".

However, this is simply not the case for those individuals who manage the countryside and have an interest in its future. The Government should take the opportunity that already exists in the countryside, with rural communities undertaking conservation work each year.

All signatories to the United Nations convention on biodiversity are to draw up national biodiversity plans. These should include measures to control invasive species, halt the loss of genetic diversity and expand nature reserves to 17 per cent of the world's land area by 2020. Are we to lose the nightingale because we are not prepared to manage the muntjac, which is destroying the habitat of so many species at an alarming rate? Are we to lose the iconic red squirrel because we allow the grey to run riot? It is important that by the time the convention meets in India in October 2012, our country will have made further progress in achieving these highly laudable aims.

The White Paper suggests that there will be local nature partnerships, new nature improvement areas and a range of initiatives. I therefore urge the Minister to ensure that in the evolution of these proposals and their fulfilment, those in the countryside who know so much about it and have a track record of caring for it are actively engaged at every step of the way. It is because of the people I have spoken about, not in spite of them, that the British countryside has remained as exceptional as it still is. If we are serious about implementing Nagoya and securing practical results, we must engage the rural communities on whom we already rely.

8.07 pm

Lord Knight of Weymouth: My Lords, I start by congratulating the noble Earl, Lord Selborne, on the Question that stimulated this excellent debate and on his fine opening speech. The Convention on Biological Diversity is a key plank of the international community's commitment to protect our environment. I was fortunate to attend the 2006 conference of the parties in Curitiba, Brazil, as the UK ministerial representative, and I have retained a strong commitment to this agenda as a result. Last October's conference of the parties to the convention in Nagoya, Japan-as the noble Earl said-was described by the Government as "historic". None of us can disagree, and it was an important statement of intent from the new Government that the Secretary of State herself attended to take part in the negotiations.

The outcome was positive. The 190 countries agreed a refreshed vision that by 2050 biodiversity will be valued, conserved, restored and wisely used, maintaining ecosystem services, sustaining a healthy planet and delivering benefits essential for all people. The parties also agreed a shorter-term ambition to:

"Take effective and urgent action to halt the loss of biodiversity in order to ensure that by 2020 ecosystems are resilient and continue to provide essential services, thereby securing the planet's variety of life, and contributing to human well-being, and poverty eradication".

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The five strategic goals are particularly significant in focusing our minds. They are: to address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and society; to reduce the direct pressures on biodiversity and promote sustainable use; to improve the status of biodiversity by safeguarding ecosystems, species and genetic diversity; to enhance the benefits to all from biodiversity and ecosystem services; and to enhance implementation through participatory planning, knowledge management and capacity building.

This is the right response from Governments to the challenges facing the planet-not just for the sake of biodiversity but because of the importance it has for human prosperity and well-being. The national ecosystem assessment, commissioned by the previous Government and published by this one, gives examples of that importance to humanity. It states that the benefits that inland wetlands bring to water quality-here I pay tribute to the speech of my noble friend- are worth up to £1.5 billion per year to the UK. Pollinators are worth £430 million per year to British agriculture. The amenity benefits of living close to rivers, coasts and other wetlands is worth up to £1.3 billion per year, and the health benefits of living with a view of a green space are worth up to £300 per person per year. It is clearly in the public's interest for the commitments made in Nagoya to be translated into action here in the UK. Indeed, they can serve as the benchmarks to test the success of the Government in delivering on their commitment to the natural environment.

I do not want to appear too cynical, although that is the burden of opposition, but while UN conferences meet every two years and agree important words-the noble Earl suggested this-and while we have in the past made commitments, for example, to the IUCN's Countdown 2010 target, targets are serially not met by Governments of whatever complexion and words too often do not turn into action. I have therefore looked at the new White Paper, The Natural Choice, with great interest. It was not published with much of a fanfare. I heard about it via word of mouth. I am sure that is not down to the new shyness of Mrs Spelman, the Secretary of State, to be heard in the media. I am happy to believe that the media had little appetite for something as uncontentious as a policy paper on the natural world.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley): It is good news.

Lord Knight of Weymouth: It is good news, as the Minister says from a sedentary position, but it does raise my first question for him. If we are to realise the aims of Nagoya, we need to raise the profile of these issues and their importance with the public. How is the department going to achieve this? A genuine cynic might say it has already done a remarkable job. At the same time that Mrs Spelman was in Nagoya, her department was busy trying to privatise the forests. It is a novel approach, but privatising trees was certainly an effective way of getting the public engaged on the importance of protecting biodiversity.

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Returning to the White Paper, I accept that it makes clear that the Government's detailed response will be in a new biodiversity strategy for England, which has been referred to,

Can the Minister assure us that, unlike the water White Paper or the waste policy document, this will not be delayed? Will it be published this month, as the noble Earl suggested? Can we expect Ministers touring the studios to promote it this time? What about the money? I note that over the five-year period Defra will lose £2 billion in cash terms from its budgets. There are around 70 commitments in the White Paper. How much will be spent on meeting them? How much has been committed to fund meeting the new commitments made in Nagoya? The press release the department published at the time suggested new money of £2.6 million over four years for international biodiversity. Can the Minister assure us that that is enough?

In the mean time, there are some other questions to ask in relation to action at home and abroad to address the five strategic goals that I took the time to read out. I very much welcome the renewed commitment in the White Paper to the Darwin initiative. I have been fortunate enough to visit Darwin projects in three continents of the world and have seen the very positive effect on animal and human populations alike. Darwin is part of the UK punching way above its weight internationally on these issues. The world genuinely looks to us to help broker conservation agreements such as the GRASP agreement I signed in Kinshasa in 2005 to protect great apes. This sort of work is the result of remarkable work by civil servants in the Minister's department. Can he tell us whether staffing and resources in the tiny international wildlife division are being protected?

At home, in my time, I was pleased to insert in the Natural Environment and Rural Communities Act the duty for public bodies to have regard to biodiversity loss. Whitehall took some persuading that that was justified and was not a costly burden on services such as the NHS. Can the Minister tell us, in the course of meeting the first of the five Nagoya goals, what bilateral discussions have taken place since October between Defra Ministers, Ministers from other departments and Ministers from devolved Administrations that have included biodiversity protection on the agenda? If he cannot tell me off the top of his head, perhaps he will write to me. How will the Government ensure that action is taken across departments, in devolved Administrations and in all tiers of Government to secure the commitment to halt biodiversity loss?

Finally, the other strategic goals all need biodiversity to be a key consideration in land use. How will this be achieved? I was pleased in my day to agree PPS9 with the then Office of the Deputy Prime Minister to secure this as a material consideration in the planning system. The planning system is currently going through massive changes via the Localism Bill, which is in Committee today in this Chamber, and measures such as PPS9 will be absorbed into the national framework and the regional tier of planning protection will disappear altogether. Conservation groups have rightly expressed concerns that the Government's approach to growth will damage the environment. In that context, can I

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ask the Minister how the Secretary of State is getting on with Mr Pickles? They appeared to have a bit of a set-to over waste collection. Have such arguments been consigned to the dustbin of history or is there a danger of them being recycled over the burden that councils, developers and planners will have to bear in playing their part on halting biodiversity loss? Given that the Chancellor said in his Budget speech that planning will now have jobs and growth as the priority, can the Minister give us reassurance that this will not squeeze out biodiversity and the goals of Nagoya?

To conclude, this has been a useful opening debate in what I hope will be ongoing scrutiny by your Lordships' House of the implementation of the Nagoya agreement. The ambition is to be applauded, but it is against the actions of the whole of the Government that the Secretary of State and her Ministers will be judged.

8.16 pm

Lord Henley: My Lords, I start by offering my welcome to the noble Lord, Lord Knight of Weymouth, on what is, I think, his first appearance at the Dispatch Box back as a spokesman on Defra matters. The noble Lord started his ministerial career, some years ago, as a Minister in this honourable department, and we welcome him back as the opposition spokesman on this. He brings a wealth of experience, and I was particularly grateful for the fact that he reminded us that he had attended earlier conferences on this matter. He will bring great expertise to this subject.

The noble Lord asked me quite a number of questions, as did all the other noble Lords who spoke. I think that all noble Lords will understand that, in the 12 minutes that I am allowed, it will barely be possible for me to answer a mere tithe of the questions. I will try to do my best, but I make it clear that I will respond by letter in due course in good time. I would also like to thank my noble friend Lord Selborne for bringing forward this debate-in the dinner hour, admittedly, when we are limited to merely an hour. I would also like to echo a point made by an opposition spokesman and say that this might have to be the first of many debates where we can explore these issues in good time.

I was very grateful to my noble friend for referring with praise to the natural environment White Paper, as did others, just as I was grateful for his references to Kew, to which he has given honourable service in the past. Kew is close to all our hearts and I imagine that the noble Lord, Lord Knight, was involved with Kew back in his ministerial days. Again, that is something that we would want to look to.

The noble Baroness, Lady Hilton, asked a number of detailed questions but started off by mentioning that she was a trustee of a freshwater trust, and referred to the drought. I remember the last time we had a fairly serious drought. One can only say that in this House-not in another place, but we are all somewhat older-we can remember Denis Howell and how, soon after he was appointed Minister for Drought, we had a lot of rain. My right honourable friend the Secretary of State has pointed out to me that ever since she announced that there was a drought in one part of the country, we have had some fairly consistent

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rain. However, the noble Baroness quite rightly referred to many rivers not being in good condition, and she wanted to know what we were going to do about that, whether our work on freshwater science was adequate and what monitoring there was of our various agri-environment schemes. Again, I will write to her.

On the larger questions of drought and water shortage, again I would refer back to the Climate Change Act and the work that has been done over the years since then in terms of adaptation to climate change by a number of bodies. I was recently at Rutland Water where I saw what Anglian Water was doing in terms of announcing its adaptation to climate change. There is much we can do, much that is already being done and we should be grateful for that.

My noble friend Lady Parminter referred, among many other things, to problems relating to the sustainable use of fishery resources. Again, this is something very close to my honourable friend Mr Benyon's heart, particularly the problems of discards. We will continue to work on this, and I know my honourable friend has made considerable progress, but this is something we obviously have to work very hard on in our negotiations with Europe.

My noble friend Lord Gardiner, among many other things, referred to the particular importance of achieving both economic growth and greater biodiversity. The important thing to remind all noble Lords is that these are not opposed to each other-they are matters that we can achieve together and certainly want to. Again, I was very grateful for what my noble friend said about heather moorland and the grouse moors. I remind him, as I think he was reminding the House, that they are really the only businesses in the upland areas that survive without subsidy.

The noble Lord, Lord Knight, as is right and proper for all opposition spokesmen, asked a whole range of questions, particularly about the importance of raising the profile of these matters. We can achieve that to a very small extent through debates in this House, but it is something that we should all try to do. He asked about the timing of a future White Paper on water. Again, that is something for which he would not expect me to give a conclusive date at this stage, but I can assure him that it will appear in due course at the appropriate time. We want to make sure that we get that right.

The noble Lord also asked about the importance of bilateral discussions, not just between Defra and other departments but between Defra and the devolved Administrations. I can assure him that we will continue to discuss matters with all other departments, as the Government are increasingly good at doing, but we shall also continue to discuss these things with the new devolved Administrations. I can assure him that, with new Ministers being in place in all three of the devolved Administrations, we have already established relations with them and we will make sure that we discuss these matters more importantly.

I want to devote my closing few minutes to Nagoya. As the House will be aware, my right honourable friend the Secretary of State played a key role in securing those milestone agreements at Nagoya. I thank the noble Lord, Lord Knight, for his remarks about her attendance there. Since then, officials have been working

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very hard to ensure that those key decisions from that meeting are implemented and that we prepare for the next conference in Hyderabad in 2012.

There were 47 decisions made at the Nagoya meeting and we have identified five key strategic priorities for implementation, as my noble friend Lord Selborne made clear. The key strategic priorities are: first, implementing the strategic plan for biodiversity from 2011 to 2020; secondly, pursuing the objectives of the resource mobilisation strategy; thirdly, stepping up the process to integrate valuation of biodiversity and ecosystem services into financial processes; fourthly, making progress on reducing emissions from deforestation and forest degradation, which is, I should say for the sake of Hansard in case I get a further chance to talk about it, what we now refer to as REDD+; and, fifthly, establishing the intergovernmental platform on biodiversity and ecosystem services.

As well as that, we have been working, as other noble Lords have made clear, with the European Commission to develop the EU 2020 biodiversity strategy, which was published on 3 May. The noble Baroness, Lady Hilton, and my noble friend Lady Parminter, said that tomorrow the Environment Council will consider these matters. I very much hope that an agreement can be reached, but I note the queries from some noble Lords about how we will achieve that. We recently published-again, I am grateful to all those who have spoken about it-our natural environment White Paper for England and our national ecosystems assessment for Britain, and I welcome what the noble Lord, Lord Knight, said about that.

In the few remaining moments, I should like to say a little about the five strategic priorities and explain the work that is underway to ensure that the United Kingdom both meets the demands of the Nagoya agreement at a domestic level and achieves the greatest influence internationally. Implementing the strategic plan for biodiversity was one of the main areas for United Kingdom leadership at Nagoya and now offers opportunities to show our leadership role. That plan set 20 targets in all areas of biodiversity. The United Kingdom led in the preparations for the strategic plan and it is therefore appropriate that we should now lead in the development of meaningful, proportionate and realistic indicators for these targets for use by the global community. This week, the United Kingdom is doing just that by hosting an expert workshop to develop such indicators. To inform the work of this workshop, the United Kingdom commissioned an international review of the use of indicators for assessing biodiversity at the national level, which will be a key reference document for the experts.

The resource mobilisation strategy is intended to be the main means of providing support to developing countries to implement the strategic plan on global biodiversity. At Nagoya, there was agreement to indicators of biodiversity spend and we are already engaged in the process of establishing baselines and targets for those 15 indicators. We are also identifying options for innovative financial mechanisms for biodiversity through our work in the EU.

We are also putting natural capital at the heart of government accounting by working with the Office for National Statistics to fully include natural capital in

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the United Kingdom environmental accounts and will establish an independent natural capital committee reporting to the Economic Affairs Cabinet Committee chaired by the Chancellor of the Exchequer. The committee will advise the Government on the state of English natural capital.

Finally, turning to REDD+, my department is working closely with the Convention on Biological Diversity to help develop advice on applying biodiversity safeguards, which are operational guidelines and standards that should be applied to prevent harm and enhance biodiversity in forests and linked environments from REDD+ activities, as well as indicators for REDD+, through research, finance and by leading expert discussions. This will also inform negotiations on safeguards in the climate change convention and, in turn, will help to achieve other linked benefits for developing countries and the global environment, including effective carbon storage and poverty reduction.

The International Climate Fund supports these multiple goals under forestry and REDD+, helping countries' wider efforts on climate change mitigation and adaptation, and sustainable low-carbon development. My department has £100 million allocated to support REDD+ over the next four years but that is only part of the £2.9 billion coming from the United Kingdom through DECC and DfID.

I would like to go on speaking for some time, but obviously there are constraints on that. What I can say is that I would like to offer an assurance that I will write to noble Lords about a range of the points they have raised, and to make it clear that the Government take their biodiversity commitments very seriously indeed. Officials within Defra are working hard to ensure that we continue to show leadership both internationally and within the country as regards biodiversity, and we are committed domestically to ensuring positive and real change.

Again, I thank my noble friend for raising the matter and I welcome the opportunity I have had to outline, albeit briefly, some of our approach to the commitments made at Nagoya.

Localism Bill

Committee (1st Day) (Continued)

8.31 pm

Clause 6 : Limits on power under section 5(1)

Amendment 19

Moved by Lord Greaves

19: Clause 6, page 4, line 32, leave out "make provision" and insert "make an order"

Lord Greaves: My Lords, in moving Amendment 19, I shall speak also to Amendments 20 and 24, but I should it make it absolutely clear, in view of the discussion on the previous grouping, that I am not speaking to Amendments 21 and 25 as they are substantively the

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same as Amendments 22 and 23, which we discussed in the previous group. There is no point in going over them again.

Amendments 19 and 20 seek to change the word "provision" to the "order" so as to assist the Government in making these clauses more understandable. There are two uses of the word "provision" in Clauses 5 and 6. In Clause 5(1) the word "provision" refers to existing statutory provisions, while in Clause 6(1), where I want to make these changes, the word "provisions" refers to an order made under Clause 5(1), so "provision" means two quite separate and different things. For anyone reading the Bill, it is not entirely clear until you have sorted it out that that is the case. It is easy to solve the problem simply by calling them "orders" in Clause 6(1) rather than provisions. They are orders, and while I do not expect the Minister to say that we can have the amendment, I hope that she will look at it and see whether the Bill can be tidied up in this sensible way, or by doing something similar that would satisfy the draftspeople.

The third amendment in the group, Amendment 24, is rather more substantial. It arises from concerns expressed by the Open Spaces Society about the effect that the Bill may have on special pieces of land that at the moment are protected under trust rights. The amendment seeks to insert the words,

The society is worried that even with the limitations proposed, the general powers could be used to enable local authorities to do whatever they want with open spaces and public access land.

Clause 1(1) enables a local authority to do anything that individuals generally may do. It is suggested that the Government either amend the Bill or give a Pepper v Hart undertaking that the Bill or any action under it will not bypass existing legislation in order to authorise a local authority or Minister to use, appropriate or dispose of land which is subject to special protection or conservation, or relax any existing procedures relating to that land.

There are some public interests which are considered so special that they are given particular statutory safeguards to prevent them being easily abolished or altered. One example is a highway, whether it is a motorway, public footpath or anything in between. Another example is an open space or park which may have been subject to a specific statutory trust when first transferred to a local authority, such as under Section 10 of the Open Spaces Act 1906, or is deemed to be held in trust for the use of the public under a judgment of the House of Lords in 1897 known as the Brockwell Park case. No doubt noble Lords have the details of that at their fingertips-I do, but I shall not read it all out in great detail.

The Bill's general power does not appear to be intended to be extended to relax the existing special procedures for the protection of these public trusts or rights, but there is a risk that attempts will be made to argue that it does so once it is passed. The Government are therefore asked either to insert a provision clarifying

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this point or at the very least to give an assurance to the Committee today or subsequently.

I have with me a fascinating document which is a photocopy of a Times law report dated July 1897. I would be delighted to read it to the Committee, but will not do so. It sets out the details of the judgment to which I referred.

My final point is rather more modern. The Government are committed under the coalition agreement and various policy statements that have been made in the past year to the creation of a new green space designation. How are such new green spaces, which will be provided under what the Government are proposing, to be safeguarded unless they are held under one of these protective statutes or a restrictive covenant that cannot be easily released? I do not expect the Minister to be briefed on that question, but it needs to be thought about in wider government policy. If it is their intention to provide a significant number of new protected green spaces under some designation or other, which is the Government's excellent policy particularly in urban and suburban areas, how are they to be protected? Whether the Minister can dig out any information on the latest government thinking and let us know about it, I do not know, but it would be very helpful if she could. I beg to move Amendment 19.

Baroness Byford: Can my noble friend enlarge on his Amendment 24? I am not quite sure that I understand it correctly as he has proposed it. Does it mean that any current public open space or public access land could not be altered even if a local community wanted it? He will be well aware of cases where, following subsidence of cliffs, footpaths have had to be altered. I would hate to think that, in some way, his well intentioned amendment would restrict what local supporters of open access might be able to do. Has he considered that problem?

Lord Greaves: I am not a lawyer but lawyers could look at the amendment to see whether the wording is wrong. The amendment is not intended to apply to access land designated under the Countryside and Rights of Way Act 2000, whether it be mountain, moorland, heath or down; it is also not intended to apply to commons because they have separate protection under the Commons Act; nor is it intended to apply to coastal access land covered by the 2000 Act. It is intended to apply to open spaces such as local parks, local mini parks, amenity land and so on which have been provided in the past under a trust deed or conditions of transfer to local authorities. I am no expert on this-nor, I imagine, is the noble Baroness-but it is intended for land which is protected not by general legislation but which has particular circumstances and particular legal conditions attached to it.

Baroness Byford: Perhaps the Minister will clarify this when she responds because I am still not quite clear. If local people decide that they want to alter the space, or whatever it is, I am concerned that if the amendment goes through as it stands that would not be possible. I still may not be right and I should like some clarification.

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The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, I shall start with Amendment 24 because the noble Baroness, Lady Byford, has asked me to clarify what it means. I do not know because it is not my amendment. It is the amendment of the noble Lord, Lord Greaves.

I am also not sure of the problem that gives rise to Amendment 24. I suggest that the noble Lord and I talk about this before the next stage because there is clearly something in his mind about trusts. I do not think it is affected by the Bill but he perhaps still sees it as a problem. I shall give him my answer and then he can consider whether that is necessary.

The order-making power in Clause 5(1) can be used only to remove restrictions and limitations that stop a local authority from acting as a natural person does. It is not a general purpose tool to remove any obligation placed on local authorities such as the removal of trusts or safeguards associated with particular public interests. In exercising the power, the Secretary of State is bound by his own obligations under the Bill in relation to the conditions safeguarding any protections, rights and freedoms which, in our view, provide sufficient safeguards against the removal of any statutory trust in relation to open spaces or parks. I think that answers the noble Lord's question and perhaps he will advise me whether that is so when he comes to reply. If not and he is still worried about it, we might have a word before we get to Report.

Amendments 19 and 20 reflect a preference for the word "order" over "provision". Although it possibly makes little difference in practice, we believe that "provision" is right because there may be cases where one order deals with a number of provisions and each provision should meet the tests set out in subsection (2).

We believe that Amendments 21 and 22 are unnecessary. The power is a power to remove statutory restrictions. If the same thing can be achieved in a different way, then it is hard to see how they could be statutory restrictions in the first place. So if an order is unnecessary, I am sure that that would be brought to our attention before it was ever passed.

Amendments 23 and 25 were not spoken to by the noble Lord. As for Amendment 24, this would also be governed by the third and fourth conditions set out in subsections (6)(2)(a) and (6)(2)(b), which say that the provision should be "proportionate" and should strike a "fair balance" between competing interests. However, the noble Lord will tell me whether he needs to discuss this matter further before the next stage or will accept what I have said.

8.45 pm

Lord Greaves: I am most grateful for the Minister's response. On Amendment 24, I shall take further soundings from my advisers on the matter in the light of what she has said. If necessary, I shall take up her offer-I thank her very much. On the other amendments, I shall reflect on what she has said, because she clearly made a substantive point that I had not previously considered. I thank her for causing me to use some more brain power on that matter. On that basis, I beg leave to withdraw the amendment.

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Amendment 19 withdrawn.

Amendments 20 to 25 not moved.

Clause 6 agreed.

Clause 7 : Procedure for orders under section 5

Amendment 26

Moved by Lord Beecham

26: Clause 7, page 5, line 27, leave out "negative,"

Lord Beecham: My Lords, there are three short amendments here. The first simply reaffirms previous amendments, which would leave out the possibility of a negative as opposed to an affirmative order. The second is slightly different in character and deals with the Clause 8 reference to an eligible parish council on which the general power might be conferred, eligibility being to be determined by the Secretary of State under Clause 8(2). The point of the amendment is to focus attention on the fact that at this stage we have no idea what would constitute an eligible parish council and to invite the Minister either to get that on the face of the Bill or to make the intention clear. It would be ridiculous, in our submission, if we were to leave the Bill in a state whereby a tiny parish council would have the full range of general powers of competence. I realise that that is not the intention, but it should be clarified during this legislative process.

Finally, Amendment 28 again refers to the issue of the affirmative rather than negative procedure. I will not again rehearse those arguments. I beg to move.

Lord Greaves: My Lords, on the affirmative business, I think that the noble Lord and the Minister will know that the proposal has our support. It seems that the Government are looking hard at recommendations made by the Delegated Powers Committee. We look forward to their comments in due course, but there is clearly a head of steam round the House over this, and I hope that the Government are sensible.

On the question of parishes, I have seen a draft version of the proposed order. I am not sure how widely it has been circulated or what its status is, except that it has "Draft" stamped all over it. It would be very helpful if it could be circulated widely. I think that it is a good order in its present form; it makes it much easier for a parish council to become eligible than it is under the present set-up. We will find out whether the noble Lord, Lord Beecham, will also think that it is good, since it may well apply to quite small parish councils. There is no point in discussing that further today-but clearly, before Report, it needs to be in the Library of the House so that everybody can see it.

Baroness Hanham: My Lords, I confirm that the statutory instrument relating to this is in the Library and has been there since 15 June.

Clause 8 defines local authorities for the purposes of the chapter, which are the bodies that will have the new power. By restricting the definition to "eligible"

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parish councils, the clause provides a power for the Secretary of State to set conditions by order for which parish councils will have the general power.

We are not making the general power of competence available to all parish councils, as the noble Lord suggested. Our view is that, given the breadth of the power and the widely varying circumstances of parish councils, there should be some criteria in place to demonstrate that the parish is representative of its community and has some understanding of the power to help to prevent misuse.

The draft statutory instrument that we made available to the House in the Library on 15 June indicates our intention that, to access the power, two conditions need to be met. These are that two-thirds of the councillors are democratically elected and that the parish clerk has received training in the use of the new power. These criteria have been discussed with the National Association of Local Councils and other interested parties.

Our aim is to ensure that eligible parish councils will be able to use the new power at the same time as other local authorities-an improvement over what happened with the existing well-being power, which was extended to some parish councils only in 2009. However, the noble Lord asked me particularly about the criteria, and those are the criteria that will be in the statutory instruments.

Amendments 26 and 28 are being considered. I will come back on these at a later stage.

Lord McKenzie of Luton: I wonder if the Minister could help me on one point, although I have not participated in this debate. Is the order in the description of eligible parish councils for the general power the same one that will run for parish councils for neighbourhood planning?

Baroness Hanham: My Lords, I would have to get an answer to that for the noble Lord. I am not sure. This specifically refers to the general power. I think that it might be different for neighbourhood planning where there is a parish council, but I would like to be sure. Perhaps I can wave my hands and find out. No one seems to know. If my runner, my noble friend Lord Attlee, can achieve something, we can deal with this. I think that the noble Lord has asked a question that we will need to give a written reply to.

Lord Beecham: I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Clause 7 agreed.

Clause 8 : Interpretation of Chapter

Amendments 27 and 28 not moved.

Clause 8 agreed.

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Clause 9 : General powers of certain fire and rescue authorities

Amendment 29

Moved by Baroness Smith of Basildon

29: Clause 9, page 8, leave out lines 33 to 41

Baroness Smith of Basildon: My Lords, I shall speak also to Amendments 30 and 31. I am seeking some clarity with the probing Amendments 29 and 30. The Bill extends the general powers of fire authorities. We discussed that at Second Reading and we understand the reasons why, but concerns about the power of the Secretary of State to then prevent fire and rescue authorities from using those powers or place conditions as the Secretary of State may dictate by an unamendable order have already been raised by both my noble friend Lord Beecham and the noble Lord, Lord Newton of Braintree. The issues around scrutiny have been well rehearsed and could apply equally to these clauses on the fire service.

I have a few other questions, and seek clarity from the Minister if she is able to assist me on this. In Clause 9, I seek to understand why new Section 5C makes changes to the Fire and Rescue Services Act 2004 and why new Section 5E contains the procedure for the Secretary of State's orders for new Section 5C. New Section 5C(1) and (2), as the Minister said earlier, ensure that if there is a statutory provision that curtails the new rights and powers of a fire authority, or if something overlaps, they can be removed, and there are procedures for the orders there.

It would be helpful to have an explanation on this. When the Secretary of State is seeking to put forward orders under new Section 5C(1) and (2), he has to follow a procedure. He has to consult and he has to publish a draft of the order and an explanatory document outlining the proposals, giving reasons for the order and outlining any consultation that has been undertaken, any representations that have been made as a result of that consultation and any changes that have been made. However-this is what I fail to understand-that procedure does not apply under new Section 5C(3) and (4). There is no guidance and no provision for the Secretary of State to use those powers-other than to consult-for new subsections (3) and (4). There is no duty to publish the consultation or to give information on any changes that have been made.

New Section 5A, which will be inserted into the 2004 Act, gives new powers to allow the fire authority to do pretty much anything that it thinks is appropriate or incidental to its functions, but it is then constrained by the Secretary of State, who can in effect withdraw that right by order, as long as he consults. I find it difficult to understand why there is no guidance, no process and no criteria by which the Secretary of State's actions can be judged to be reasonable or appropriate. That could make things extremely difficult for a fire and rescue authority. Having told the authority that there are virtually no boundaries, as long as what it does is appropriate to its functions, however incidental, the Bill then specifies boundaries but does not say what those boundaries are, other than that they can be changed by the whim of the Secretary of State as long

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as he consults. Issues of parliamentary scrutiny have already been raised, but there are wider implications relating to why the process that is outlined in new Section 5E, which is similar to the process for the new powers of competence given to local authorities, is not applied to new Section 5C(3) and (4).

Will the noble Baroness say what guidance will be published for the fire and rescue services, so that they know what the boundaries are? What criteria will the Secretary of State use? These two new subsections give the Secretary of State the power to prevent fire and rescue services from doing anything that they want to do or allow the Secretary of State to put conditions on that. Unless they and the Secretary of State know what the boundaries are, the Secretary of State seems to be able merely by order to prevent them from doing anything that they have chosen to do.

Will the criteria that are used, whatever they are-they are not in the legislation and I am not sure that they will be published at all-be the same for all fire and rescue authorities or will they be performance related in some way? It would be helpful to know why the procedures provided for the Secretary of State in new Section 5E apply to subsections (1) and (2) of new Section 5C but not to new subsections (3) and (4). I do not understand the logic of that. I understood the noble Baroness to say that the reason for the powers in new subsections (3) and (4) was to safeguard finances but that there were no plans to use them-these situations would be rare. However, I do not think that that is adequate when we are putting into legislation something that we feel we may not often use. I am sorry if the argument is rather complex, but I find it difficult to understand why no process is in place for orders relating to what are in effect more draconian parts of the legislation when there is a process for other parts.

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