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It is important that we are able to ensure that people who are going to use these services will be able to have a greater say in how those services will be delivered, whether those services meet their needs and, if they do not, how we can have recourse to get those services made better in responding to those needs.

Baroness Armstrong of Hill Top: My Lords, will the Minister accept that many of us are extremely disappointed with this so-called White Paper? It seems to be a Green Paper because it consults on a range of things without any precision on what the Government's intent is. When I saw the coalition agreement saying that there would be an opportunity for millions of workers to be their own boss, I was expecting more from a White Paper than simply, "We will continue to support mutuals and the public sector workers in them". The lack of ambition is staggering.

Will the Government now seriously address the manner in which they can reform and change public services? They are getting a bad name now for their lack of ambition on reform and their inability to deliver it. On things like mutuals, they need to answer the questions put by my noble friend on the Front Bench, particularly around pensions and pension entitlement.

Baroness Verma: I am sorry that the noble Baroness feels that this does not address public sector reform. Public services are being reformed. This is an exciting and comprehensive paper. I suggest that if she takes the paper away and looks at it in detail, she will see that we are genuinely working across government to ensure that there is a proper reform of public services so that they are delivered to ensure that people have choices, are able to have their needs met and have a say in how those choices are delivered. These reforms will take time because we want the process to be evolutionary and we want to get it right, but it is a build-on to what was happening already. I hope that I leave the noble Baroness assured that we will be working hard with public services to ensure the best delivery.

Phone Hacking


5.43 pm

Baroness Rawlings: My Lords, by leave of the House, I should like to repeat a Statement made by the Secretary of State in another place.

"Mr Speaker, the events of last week shocked the nation. Our proud tradition of journalism, which for centuries has bravely held those in positions of power or responsibility to account without fear or favour, was shaken by the revelation of what we now know to have happened at the News of the World. The perpetrators of those acts not only broke the law, they preyed on the grief of families who had lost loved ones either as a result of foul murders or giving their life for their country. I hope that the law shows no mercy on those responsible and no mercy on any managers who condoned such appalling behaviour.

As a result of what happened, the Prime Minister last week announced two independent inquiries to examine what went wrong and recommend to the Government how we can make sure it never happens again. First, there will be a full, judge-led public

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inquiry into the original police investigation. Witnesses will be questioned under oath and no stone will be left unturned. As the Prime Minister announced on Friday, that inquiry will need to answer the following questions. Why did the first police investigation fail? What exactly was going on at the News of the World, and what was going on at other newspapers? The bulk of the work of this inquiry can happen only after the police investigation has finished, but we will start what we can now.

Secondly, there will be a separate inquiry to look at the culture, the practices and the ethics of the British press. In particular, it should look at how our newspapers are regulated and make recommendations for the future. That inquiry should start as soon as possible, ideally this summer. As the Prime Minister said, a free press is an essential component of our democracy and our way of life, but press freedom does not mean that the press should be above the law. In announcing this inquiry, the Prime Minister has invited views on the way that the press should be regulated in future.

I understand that in the past few minutes News Corporation has withdrawn its undertaking in lieu. On 25 January I said that I was minded to refer News Corporation's proposed merger with BSkyB to the Competition Commission in the absence of any specific undertakings in lieu. As a result of News Corporation's announcement this afternoon, I am now going to refer this to the Competition Commission with immediate effect and will be writing to it this afternoon. This will be an outcome that I am sure the whole House will welcome. It will mean that the Competition Commission will be able to give further full and exhaustive consideration of this merger, taking into account all relevant recent developments.

Protecting our tradition of a strong, free and independent media is the most sacred responsibility I have as Culture Secretary. Irresponsible, illegal and callous behaviour damages that freedom by weakening public support for the self-regulation upon which it has thrived. By dealing decisively with the abuses of power that we have seen, I hope on a cross-party basis, this Government intend to strengthen and not diminish press freedom, making this country once again proud and not ashamed of the journalism that so shapes our democracy".

5.48 pm

Baroness Scotland of Asthal: My Lords, I thank the noble Baroness for repeating the Statement made in the other place by the Secretary of State for Culture, Media and Sport. I join with her in the sentiments that she has expressed regarding the horror that we have all felt as a result of what has transpired to date.

We are faced with a most distressing and appalling series of allegations that, if true, demonstrate a level of systemic failure that almost beggars belief. The gravity of the situation should have ensured that the noble Baroness's right honourable friend the Prime Minister had the courtesy to go to the House of Commons to answer this debate himself. We know that he felt it sufficiently important to go 20 minutes down the road to a press conference. That has been a matter of acute disappointment to those on this side. Some have argued-I hope the noble Baroness will

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understand that many will say properly-that that was a dereliction of his duty. The Prime Minister has failed to take responsibility. The victims of this crisis deserve better, Parliament deserves better and your Lordships will know that the leader of the Opposition has said-I have to say, with regret, that I believe that this is right-that the country deserves better.

My right honourable friend the leader of the Opposition has responded in the other place to the Government's Statement. I fully agree with everything that he set out in his response. What my right honourable friend has said on this scandal reflects the mood of the country, and I pay tribute to him for that. However, as shadow Attorney-General, there are several specific points that I wish to bring before this House. The Government announced in today's Statement that they will refer News Corporation's bid for BSkyB to the Competition Commission. We are pleased that the Government have finally accepted the case that we on these Benches have argued consistently. We said from the very beginning that this matter should be referred to the Competition Commission. This should have been done on 25 January of this year, when the Culture Secretary first announced that he was not going to refer the matter to the Competition Commission but, instead, consult on the terms of the undertakings from News Corporation, which he wanted to accept. I hope the noble Baroness will now accept that that judgment was wrong.

Your Lordships will know that the period of consultation ended last Friday. However, News Corporation announced this afternoon-only moments ago, as the noble Baroness said-that it has withdrawn the undertakings that it gave in lieu of a reference. The undertakings were given in lieu to prevent a reference to the Competition Commission. Without these undertakings in lieu, the Secretary of State has no choice but to refer the matter to the Competition Commission. Therefore, it is not a question of the Government announcing their decision to refer the matter to the Competition Commission. The Government have not made this decision. In effect, News Corporation has made this decision and the Government have finally acquiesced to it. There are still several issues that need to be determined before the Government pursue the reference. I ask the noble Baroness to ask her right honourable friend the Secretary of State to pause before making that reference today. On this occasion we must get it right.

As the noble Baroness is well aware, there are constraints. The Competition Commission is constrained by the original decision, taken by the Secretary of State for Business, to limit the notice to the issue of plurality. The Government at that stage had the choice of including broadcasting standards in that notice and failed to do so. It is clear now that that was a mistake. I say straight away to the noble Baroness: I understand why the Minister then responsible might have been so misled. There is a now a real question mark over whether there has been some bad faith in this matter. When the then Secretary of State for Culture, Media and Sport came to make his determination, it was not known that the nature, level, extent and depth of the illegality was such as has been displayed over the past week. That is a matter of critical importance.

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Consideration should now be given to whether a second notice can be issued. There are real questions in relation to bad faith, on which I have already touched. Several organisations and people claim that they were misled by News International. The noble Baroness, Lady Buscombe, of the Press Complaints Commission, says that she was misled either by omission or commission. Then there are the police. If the allegations are true, we are now led to believe that News International failed to disclose that from 2007 it had e-mail evidence demonstrating that payments to police officers were authorised and this fact was not disclosed to police until 20 June of this year-four years later. Almost every hour, further disclosures are being made, which, if true, may further demonstrate shocking bad faith. Therefore, timing is everything and something that is peculiarly within the control of the Secretary of State for Culture, Media and Sport.

I have alluded already to the nature, breadth and depth of these allegations. However, we do not know what more may be coming. We have heard that Rebekah Brooks believes, as she told News International staff, that there is much, much more to come. There has to be some assessment of the true level of illegality and criminality that may need to be explored. There is also the interrelationship of News Corporation and News International, and the level of their interdependence. Ofcom has indicated that it is interested in this matter. I ask the noble Baroness to ask her right honourable friend to consider continuing with his request, both to Ofcom and to the OFT, as to how the new reference to the Competition Commission should be framed. Nothing should be done until their advice is forthcoming. There will doubtless have to be consideration of whether Ofcom will now have the time to make a mature decision on the fit and proper person test. Will the noble Baroness give this House an assurance that, before any reference is made to the Competition Commission, the Government will give full and proper consideration to all of these issues so that a fully informed and correct reference can be made?

On the inquiries announced by the Government, will the noble Baroness confirm that no inquiries have yet been established, contrary to what was claimed in the other place today by her right honourable friend the Secretary of State for Culture? As the noble Baroness will be aware, from the moment an inquiry is established it becomes a criminal offence to interfere with, let alone destroy, any relevant evidence. Therefore, will she assure this House that the Government accept that such inquiries should be established immediately, without any further delay?

The reason why these issues are so important is that News Corporation currently owns 39.1 per cent of BSkyB and wants to own 100 per cent. If it is allowed to purchase these shares, it will become the largest source of news in the United Kingdom after the BBC. It will have a media empire that produces news on radio and television, in newspapers and on the internet. News Corporation will become one of the largest privately owned media empires in the world. Its influence on the United Kingdom's public life will substantially increase, both directly and indirectly.

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So it is right that this matter should be referred to the Competition Commission. That is what we on these Benches have long advocated. But I have to say to your Lordships that it is now of critical importance that this matter be properly dealt with, that the reference to the Competition Commission be fully and properly framed, and that any reference takes fully into account all the circumstances and extraordinary events that we have seen over the past week. None of this should be done in haste. The Secretary of State for Culture, Media and Sport has time; and on this occasion we urge him strongly to take that time to frame this matter correctly. Due consideration has never been more important than it is today.

Given how far the Government have got this wrong, it is imperative that we now get this right.

6.01 pm

Baroness Rawlings: My Lords, I of course would not agree that the Government have got this wrong, and I am, in fact, deeply saddened that the noble and learned Baroness opposite should try to score party-political points on something which is this serious.

Noble Lords: Oh!

Baroness Rawlings: I will of course try to answer all her points. The Secretary of State was open-mined at all times during this whole process. He has taken no decision and it was thanks to the Secretary of State that the consultation was extended. The Secretary of State has said that it is his decision that we are taking this bid back to the Competition Commission. The Government said from the start that they would refer the merger but would consider undertakings in lieu. Now that News Corporation has withdrawn its undertaking, the Culture Secretary is reverting to his original decision.

The decision regarding the true worthiness of Murdoch to continue with this BSkyB bid will be under Ofcom and the OFT to wait for their advice. Surely hacking is evil-we all know it is evil-and it is bad for everyone. The inquiries have been established. The Secretary of State has announced immediately, as the noble and learned Baroness heard from the Secretary of State in the other place, that the EU competition issue has been looked into at an earlier stage and the EU gave a decision that on competition grounds it was all right.

As to the reference to the basis of broadcasting standards, the Secretary of State cannot legally issue a second intervention notice. This is ruled out by the legislation. We would totally agree with the noble and learned Baroness that this should not be done in haste, and the Secretary of State has said-and she is right-right from the start that he will take his time, he will not be pressed on this, he will look into every possible side, and the inquiries will be done with due process.

6.04 pm

Lord Fowler: My Lords, perhaps I may concentrate on the important questions that my noble friend raised in the first part of the Statement-on the police investigation, on why the first police investigation failed so abysmally, and on the practices and ethics of the press-although I obviously very much welcome the decision on the Competition Commission.

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I knew-if I may say so kindly to my noble friend-that the time would come when she would agree with me on the need for a public inquiry. I have now been given two, which is extremely kind of her. More seriously, having reached this point, does she agree with me, particularly in light of some of the comments of the noble and learned Baroness opposite, that it is in no one's interest at all that this becomes a party-political issue, for we might just remember that virtually everything complained of took place under the watch of the party opposite when they were in government and, furthermore, that the only reason that News Corp is able to pursue a bid for full control of BSkyB is because, after lobbying, the controls that prevented such a bid-and had prevented such a bid for years-were scrapped by the Communications Act 2003. That is simply a matter of history, and some of us said so and opposed that at the time.

Perhaps I might put it to the House: would it not be more sensible to recognise that over the past 30 years all Governments have made mistakes and all Governments have got too close to media organisations such as News International-and not just News International? Would it not now be sensible to take the opportunity to step back and put the relationship between political parties and the media on a proper, more independent and less demeaning basis? If we did that, the public would be very pleased with our action.

Baroness Rawlings: My Lords, I thank my noble friend Lord Fowler for his intervention, and I agree totally with him that this should not be a party-political matter. This has been ongoing for several years, as he has clearly pointed out. We should take a step back, which is exactly what the Secretary of State is doing. The Government are determined to find out all that the journalists and their agents were up to in hacking into phone messages, and what the police knew, when they knew, and what they did about it-and how we might learn the lessons for the future. That is why the Prime Minister announced last Wednesday that there would be two inquiries, both of which will be fully independent. I note that my noble friend Lord Fowler has been asking for these inquires for a very long time now. The first will be an independent judicial inquiry to get to the bottom of the specific revelations and allegations. It will look at why the police investigation that started in 2006 failed, what was going on in the News of the World, and what was going on in other newspapers. The second inquiry will be a review, and will look at the wider lessons for the future of the press. We intend that work can start at the earliest opportunity-ideally, this summer.

Lord Kinnock: My Lords, does the Minister share my deep concern, which I am certain extends across this House, that today News Corporation has withdrawn its previous undertaking to hive off Sky News? Does the noble Baroness recall that Mr Murdoch told a Select Committee of this House that,

"Sky News would be more popular if it was more like Fox News",

and made what he called "the presentational progress" achieved by that notoriously biased channel, which he owns, in the United States of America? Does she think that with those instincts and judgments Mr Murdoch

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could ever be a fit and proper person to have ownership and control of 40 per cent of BSkyB, let alone the whole of it?

Baroness Rawlings: My Lords, the noble Lord, Lord Kinnock, asks a question which comes to the heart of the matter and the responsibilities of the Secretary of State. There are rules in this country on plurality, and we have talked about these on several occasions. As to whether Mr Murdoch is a fit and proper person, the "fit and proper" statutory test is a matter for Ofcom, which is taking its duties in this area very seriously and is already in touch with the relevant authorities. The Government have no role in its decisions and have not sought to influence it in one way or another. This is an ongoing situation, and the plurality matter that the noble Lord raises is of the utmost importance.

Baroness Bonham-Carter of Yarnbury: My Lords, I echo the words of my noble friend Lord Fowler that this should not be a party-political matter, and congratulate him on all he has done to bring it to this point. Does my noble friend not agree that it is absolutely astonishing that the chief executive of News Corp is still in her job? I was an editor, not of a newspaper but of a television programme. Even if I had not known what was going on, as the person responsible for my programme, I would have resigned. Does not my noble friend think that that person should follow what I believe the Prime Minister has said, which is that it is time that she left her job?

Baroness Rawlings: My noble friend Lady Bonham-Carter asks-this has been mentioned once before-about the resignation of somebody working for a public company. It is up to the chairman and chief executive to look into whether someone should resign, whether it is Rebekah Brooks herself or Mr Murdoch, but it is not up to the Government to interfere on that matter.

Lord Soley: My Lords, it is a mere 20 years since I introduced my Freedom and Responsibility of the Press Bill in the House of Commons, so I think I am making good progress when I see what is happening today. We used to talk then about the problem of some of the practices in the press, which included things such as offering payments to the police. We did not know about hacking then. The first point I want to emphasise is that we must make sure that this is not just about the News of the World. It is a great pity that a newspaper has been sacrificed because a chief executive would not do the decent thing and resign.

The second point is that the Minister said, citing the Culture Secretary in the other House, that the job of the media is to hold people in power to account. That is absolutely right, but as we were saying 20-odd years ago, the problem is that no one holds the press to account. How on earth can we even think of allowing Rupert Murdoch to have such control over the British media? It really should not go ahead for that reason alone. My final point, which is very important following what the Prime Minister said, is: have the Government any idea what they are going to replace the Press Complaints Commission with?

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Baroness Rawlings: My Lords, I agree with the noble Lord, Lord Soley, that it was probably not just the News of the World guilty for all the problems that we have today. To answer his second question, the press must abide by the law, as do we all. Of particular note are the laws on defamation, data protection and phone hacking and the Regulation of Investigatory Powers Act. Then comes the code of practice.

The press all have to sign up to the code of practice. This is a self-regulatory code drawn up by the committee of editors. It is not intended to duplicate the law, but is complementary to it. For instance, it includes specific provisions on privacy which are not found in the law. Adherence to the code is then overseen by the Press Complaints Commission, which the noble Lord asked about. The Secretary of State is looking into how to deal with the Press Complaints Commission to make it more accountable. He is definitely looking at that at the moment, so the noble Lord is right to have brought up that point. The PCC is made up of a mixture of press and lay members, but lay members form a two-thirds majority, and the chairman is always someone with no connection to the press. As we all know, the noble Baroness, Lady Buscombe, currently holds that position.

Lord Crickhowell: My Lords, my noble friend Lord Fowler has already referred to the events in 2003 when what became known as the Gang of Four, of whom I was one and he was another, under the leadership of the noble Lord, Lord Puttnam, sought to temper the over-enthusiasm of the Front Benches and the Government for liberalising the ownership of the press. Had one amendment that I moved been carried-it was resisted on whipped votes by both Front Benches and was defeated by only 11 votes-we would not be in the mess we are now.

Against that background, I was a little surprised to hear the noble and learned Baroness who opened the questioning for the Opposition, who emphasised how we must take time to get it right, arguing that that we simply must rush into the appointment of a judge and a judicial inquiry. The police investigation is already under way, and I feel sure that the police are in a position to stop any removal of evidence, and so on. It is very important that the right judge is appointed after seeking the advice of the Lord Chief Justice and that the right brief is given to the inquiry, after consultation, which I hope will include the Leader of the Opposition. I understand that there is to be a meeting on Wednesday.

The Culture Secretary no longer has to rely on the narrow question of fitness and advice from Ofcom-although I hope that Ofcom will continue to consider the question. Can my noble friend confirm that as a result of News Corporation's withdrawal of its undertaking in lieu, the Competition Commission will be free to delay any decision while huge questions remain over the behaviour of senior management at the very summit of News Corporation, and that those questions are unlikely to be answered until we know the outcome of the police inquiries and the judge-led inquiry?

Secondly, the Statement says that the bulk of the work of the judge-led inquiry can take place only after the police investigation is complete, but that may take

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many months. Indeed, the legal actions following it could take even longer. Would it not be for the judge to decide exactly how far the activities of his inquiry can be pursued? Does not the judge have considerable scope in that respect as a result of the arrangements put in place in 2005?


Noble Lords: Oh!

Lord Crickhowell: I was merely going to observe again that if we are not to hurry it-the noble and learned Baroness laid great emphasis on that-we have to get the scope of the judge-led inquiry right. I hope that my noble friend can confirm that wide consultation will take place about it.

Baroness Rawlings: My Lords, my noble friend Lord Crickhowell backs up the most important point: that the Secretary of State will need time for the whole process without rushing the police inquiry-my noble friend is quite right to say that several inquiries are already ongoing-and that he is free to delay it. Ofcom and the Office of Fair Trading will also have to report. The Competition Commission must report too, though within six to 18 months at the outside limit. As for the judge-led inquiry to decide, one hopes that it will not take too long. If noble Lords think back to the Saville inquiry, which took 12 years and £200 million, one hopes that this inquiry will come through a little faster.

Baroness O'Neill of Bengarve: My Lords, will the Minister clarify one point that has become less clear during the past half hour? She has spoken of inquiries having been established. Has the remit of the judge-led inquiry been made public? Until it is, I believe that the point made by the noble and learned Baroness, Lady Scotland, stands-namely, that it is unclear what constitutes evidence and it will not be a criminal offence to destroy evidence. I should be very grateful if the Minister could tell us whether the remit is in the public domain; and, if not, when it will be.

Baroness Rawlings: My Lords, the first inquiry will be an independent judicial one to get to the bottom of the specific revelations and allegations. It will look at why the police investigation that started in 2006 failed, and at what was going on at the News of the World and at other newspapers. The remit of the second inquiry will be to look at the wider lessons for the future of the press, and we intend that work can start at the earliest opportunity, ideally this summer. There will surely be further details on these inquiries, which will be announced in due time.

Lord Lawson of Blaby: My Lords, like my noble friend Lord Fowler, whose contribution to this ongoing discussion is to be commended, I spent some time in journalism before coming into politics; indeed, I was an editor. There is nobody stronger for press freedom than I am. However, can we take advantage of the bipartisanship, which I sense is for the first time on this issue coming about, to have agreement on a law of privacy in this country, which we have long needed and which Governments have known is necessary but have been afraid of confronting the press because the Opposition of the day would take the side of the press

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under the banner of press freedom? In fact, appropriate privacy legislation is in my judgment an essential part of a civilised society.

Finally, I am slightly concerned that of all the very grave malpractices that have been uncovered, perhaps the gravest-of which no mention has been made so far in this exchange today-is the acceptance on a large and horrifying scale, and going quite far up the ladder, by members of the police of large sums of money in return for confidential information. Of all the appalling things that have happened, in my judgment this is the worst. I hope that the Government will bear that in mind and act appropriately.

Baroness Rawlings: My noble friend Lord Lawson makes a very valid point. We are all horrified by the allegations that have arisen out of this case. Privacy and freedom are probably among the most valued aspects of our society, especially if we think of what used to happen in the Soviet Union and perhaps still happens in various parts of the world today. The Government strongly believe that a press free from state intervention is fundamental to our democracy. However, the press must abide by the same laws as everyone else, including those on data protection and phone hacking. In addition, most newspapers choose to sign up to the code of practice, which imposes further restrictions on them. My noble friend Lord Lawson is absolutely right, but it would be a bad thing to rush into new press legislation without having gone into all the details and heard the results of all the inquiries.

Lord Grocott: My Lords, in relation to the second of the inquiries that the noble Baroness has referred to, into the culture and practices of the press and questions of how newspapers are regulated, I am sure she is aware that whenever committees of this or the other House have looked at anything related to these issues they have always encountered a serious blockage in the refusal of senior people involved with the press to come before committees of the two Houses and be answerable for their actions. That was particularly true of the Communications Committee of this House, chaired very ably by the noble Lord, Lord Fowler, who has an extremely good record on these issues. I simply ask if this committee will have the power to call witnesses and to require the presentation of evidence and materials. If it does not have the full authority of Parliament, with sanctions, behind it, I fear that this will be a very ineffective inquiry.

Baroness Rawlings: The noble Lord, Lord Grocott, has a very valid point and I would agree with him.

Police Reform and Social Responsibility Bill

Report (3rd Day) (Continued)

6.25 pm

Amendment 109A

Moved by Lord Hunt of Kings Heath

109A: Clause 29, page 21, line 7, at end insert-

"( ) A police and crime panel must-

(a) review the police and crime commissioner's human resources policy; and

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(b) make a report or recommendations on that policy.

( ) Where a panel makes a report or recommendation on the police and crime commissioner's human resources policy, the police and crime commissioner must-

(a) review the policy, taking the panel's report or recommendations into account; and

(b) resubmit a revised human resources policy to the panel for the panel's consideration."

Lord Hunt of Kings Heath: My Lords, this group contains a considerable number of government amendments that in essence ensure that all the staff, property rights and liabilities of police authorities pass first to police and crime commissioners and the MOPC on the day of creation in order to maintain current arrangements. They then allow for secondary transfer schemes to be put in place to allow staff to transfer to the chief officer of police.

I understand that the Association of Police Authorities supports the Government's approach. Much as I admire that association, I believe it is misguided, as do a number of staff organisations. The association may envisage the police and crime commissioner retaining the non-operational police staff and transferring the operational police staff to the chief constable. Of course, that is not necessarily the case, but I am concerned at the proposal to split staff into two legally separate workforces under different employers in each force. This increases the number of police employers from the current 43 police authorities to 86 police and crime commissioners and chief constables. At the very least, that will drain resources from front-line policing and lead to the unnecessary loss of both police staff and police officer posts because of the infrastructure cost involved. Indeed, the split between the staff under the PCC and the chief constable is likely to be haphazard and arbitrary, depending on how local relationships work out. The general public, who rely on the force to keep them safe, will surely be confused and indeed concerned at the proliferation of new police employers and the associated bureaucracy, which would risk the confidence of local communities in their police force.

Having two separate workforces in each force is bound to lead to inefficiencies, confusions and the possibility of a two-tier workforce on different terms and conditions. The Government are proposing a two-stage staff transfer, first from the police authority to the police and crime commissioner and then, at a later date, from the police and crime commissioner to chief constables, resulting in twice the opportunity for things to go wrong and for staff interests to be prejudiced. I remind noble Lords of the requirement under the Local Government Pension Scheme for scheme liabilities to be crystallised at the point of transfer between employers; this will have to happen twice and will require the necessary financial undertakings to be given twice.

The Government say that they believe in the concept of a single police force in which police staff and officers come together in unified, effective work. However, these proposals contain the prospect of the police staff workforce being divided between two separate employers, which could threaten all the good work of the last 10 years to build a one-culture police service. I remind the noble Baroness of Tom Winsor's independent review of police officers' and staff's pay and conditions,

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which has already delivered its part one report in March this year; part two is expected in January 2012. All the evidence in the part one report shows that there is an appetite for harmonising pay and conditions in the police service as a means of modernising the police employment framework. Two of the unions that have talked to me, UNISON and Unite, support that agenda. However, that positive agenda could be frustrated if the police workforce is carved up in the way the Government propose, with their two-stage, two-employer model.

6.30 pm

My Amendment 264A, which is in this group, seeks to create in policing the same employment framework that exists in the rest of the public sector, with staff employed by the organisation as a body corporate rather than by one powerful individual. I believe that it fits very much into the framework of the amendment moved by the noble Baroness, Lady Harris, in our first-day debate in Committee. Her concept of a police commission would allow for the corporate employment of staff and would be a much more satisfactory way of dealing with these matters.

Amendment 109A, which is the first in this group, concerns the role of the police and crime panel. Given that so much power is being given to the police and crime commissioner in relation to resource, responsibilities and now staff, it is right that it comes under scrutiny. My Amendment 109A would give the police and crime panel the responsibility for reviewing the human resources policy of the police and crime commissioner. It is, if you like, a second-best amendment, because I would much prefer that the Government's amendments are not moved. I would much prefer there not to be the prospect of all staff being handed over to the police and crime commissioner to do what he wills. However, if that is the Government's firm intention, at the very least the police and crime panel ought to have a specific statutory responsibility for reviewing and commenting on the performance of those duties by the police and crime commissioner. I beg to move.

Lord Harris of Haringey: My Lords, I will speak to Amendments 257 to 267, which are remarkably similar to the Minister's amendments except that they refer to PCCs and MOPC rather than to the "policing body", which is perhaps a more elegant formulation.

I seek clarity as to the Government's intentions for all this. The Government have brought quite a number of these problems on themselves. At the end of last week, I spoke to a senior lawyer employed by a police service who described the Bill as being "inherently contradictory" because of the confusion about what it is trying to achieve. While I welcome the Minister's proposals in her amendments-which will allow for a two-stage transfer because it will require a two-stage transfer to sort out exactly what the details, the most sensible disposition of staff and the most appropriate way of doing it are going to be-this is a problem that the Government, policing bodies and the police service did not need to have. I cannot understand what is gained by chief officers of police employing all their staff. What extra ability does it give them, apart from a

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great deal of hassle and potential problems, over having direction and control of those staff? That is a point that the Minister will no doubt explain.

I want to understand exactly what the Government's amendments do. I assume that the new amendments that the Minister is introducing are intended to maintain the status quo from the commencement of the Bill until the second transfer scheme is effective. I would be grateful if she could confirm that. There is an interesting anomaly if you have a two-stage process. During the first stage, before the second stage kicks into action, there is presumably the potential for the chief officer of police to employ new staff directly subsequent to the first transfer scheme, and this would then create two classes of police staff. I would be grateful if the Minister could tell us whether having two classes of police staff, because there is a two-stage transfer agreement, is intentional and whether she wishes to return to this at Third Reading. I am also not clear whether there is a deadline by which the second-stage transfer should take place. My own view is that the complexities of this mean that it may take a considerable period of negotiation to reach a mutual agreement for staff to be transferred to the chief officer of police, and it is better that those discussions take place at a leisurely pace to allow all the relevant interests to be consulted and involved.

I have one additional question. Will the Minister say whether the transfers under Schedule 15 are going to be legally effective under Scottish law as well as the law in England and Wales? As I understand it, a number of police authorities around the country hold land in Scotland, so these transfers are important.

My final point-again, I would be grateful for the Minister's explanation-is that, as I understand it, her amendments to Clauses 19 and 20, which were agreed on the first day of Report, will mean that the police and crime commissioner or the MOPC in London will not be able to delegate either to the chief constable or to the Commissioner of Police for the Metropolis any of that body's staff. They would not be able to delegate to the chief officer of police to arrange a function-the PCC or the MOPC will have to engage the chief officer formally to carry out some functions rather than simply delegate them.

I have seen a letter-rather, I have been provided with a letter; there is no question of it having been "seen" because it was leaked to me or anything like that-from the right honourable Nick Herbert, Minister of State for Policing and Criminal Justice, to the Commissioner and Deputy Commissioner of the Metropolitan Police, a "Dear Paul and Tim" letter, which tries to set out the Government's policy. However, it leaves me even more confused as a result. He says:

"On delegation, I have said from the outset that I want the office of the PCC/MOPC and the office of the Chief Officer to be clearly distinct so as to enable proper accountability and a clear division of responsibilities. Preventing the PCC/MOPC from delegating to the Chief Officer is an important part of this".

Will the Minister tell us why that is so important, because delegation is a very clear statement?

Nick Herbert goes on to say:

"This means that should a PCC/MOPC want a Police Force to carry out some functions, he or she will have to formally engage

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the Chief Officer to do so, rather than simply delegate it. This will help clarify roles and responsibilities, which I do not believe is the case under the current system".

I dispute that. Will the Minister explain to us very clearly the distinction between delegation and formal engagement? What is the process that underpins formal engagement? Is it a contract or a memorandum of understanding? What exactly is envisaged? I suspect that the Government are creating a new bureaucracy, further uncertainty and further duplication.

The Minister of State, Home Office (Baroness Browning): My Lords, we do not disagree with the principle behind the amendments proposed by the noble Lord, Lord Harris, that the PCC or the MOPC should be able to make their own decisions about transfers. However, the government amendments will maintain the status quo-the noble Lord asked about that, and that is the intention-and provide stability in the transitional phase by providing that all staff and assets transfer from police authorities to PCCs or the MOPC initially. They then enable the PCCs and the MOPC to write transfer orders to transfer staff to the chief constable or commissioner.

Perhaps I could begin by addressing first the amendments of the noble Lord, Lord Hunt. Amendment 264A would mean that a police authority could transfer staff only to the police force; no member of the police authority staff could be transferred to the PCC or the MOPC. As a preliminary point, the Bill provides for the police staff to be employed by the chief officer of police, not the police force, which does not exist as a separate entity capable of employing staff. Noble Lords whose names have been put to these amendments might like to make the police force the employer rather than the chief officer, but no amendment has been tabled to achieve that. Obviously, I can answer only to amendments that have actually been tabled.

To clarify the separate roles of the PCC or the MOPC on the one hand and the chief officer on the other, and to ensure that each can carry out his or her functions independently, it is essential that each employs his or her own staff. As such, the Bill must allow for staff to be transferred to the PCC and to the MOPC; it does not direct that that happens, but it allows for the best decisions to be made locally.

Amendment 109A would give police and crime panels a role in reviewing PCCs' human resources policy. This would already fall under the existing general powers of panels to scrutinise PCCs. I do not think that the way forward taken by these amendments would achieve the sort of protection needed, but I make a commitment to the House that I will consider the matter further. Perhaps this can be returned to in the other place, given the late stage of this Bill. I therefore ask that the amendments are not pressed to a vote.

I will now speak to the government amendments and answer some of the points made by the noble Lord, Lord Harris, who asked why delegation was necessary. It is exactly as the Minister for Policing and Criminal Justice says; if the PCC wants to ask the chief constable to do something, he or she will need to commission it formally-they cannot just order the PCC to do it.

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Lord Harris of Haringey: I am trying to understand how the process that is being described will differ from delegation, which is not the same as simply ordering-it is a process. How is that going to change when you do not have delegation but instead have this commissioning process?

Baroness Browning: I guarantee to write to the noble Lord about this, but the principle behind it is that it is very clear to the public who is responsible for what. The process that will be employed is more detailed than I have information for tonight, but I shall write to him specifically on the issue of process that he has raised.

The amendment from the noble Lord, Lord Harris of Haringey, would allow PCCs and the MOPC, as well as police authorities, to make transfer schemes to transfer staff and assets. I completely appreciate the position that the noble Lord is coming from. The Government have been working closely with police forces and authorities on how the transitional arrangements should operate.

Many are concerned about whether there is enough time in which to write transfer schemes ahead of the introduction of PCCs and the Mayor's Office for Policing and Crime. They have also expressed concerns about trying to second-guess what staffing a PCC may want when they come into office. As such, it is eminently sensible, as the noble Lord, Lord Harris, suggests, to allow PCCs and the MOPC to write transfer schemes. However, government Amendments 256B to 267M in this group simplify matters even further. They simply maintain the status quo for a period, with all police authority staff and assets transferring initially to PCCs and the MOPC. This will enable transfer schemes to be written by PCCs and the MOPC in slower time. I hope that the noble Lord will look at my proposed amendments and agree that they achieve the same end, and I hope on that basis that he will agree to withdraw his amendment and support the government amendments.

The noble Lord also asked about Scotland. I understand why he asked that. Government Amendments 309ZB and 309ZD extend the territorial extent of Schedule 15, so that transfers under that schedule are legally effective under Scots law as well as in England and Wales.

Government Amendments 256A and 267P to 267Q enable the continued employment of chief officers of police. There has been a lot of discussion on this matter, but, finally, Amendment 267N ensures that accounting and audit arrangements can be put in place for police authorities and the PCC or the MOPC in respect of the financial year when the transition takes place. I realise from the interest that the noble Lord, Lord Harris of Haringey, has taken in this in particular that these are important matters. We want to get it right, and I will promise to write to him on matters of process and update him on where we are.

6.45 pm

Lord Hunt of Kings Heath: I am grateful to the Minister. My noble friend and I perhaps come at this from different viewpoints, but I am deeply concerned

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about the power that is being given to individual elected PCCs over the staff. The fact that you would depend on them for the staff transfer to the chief constable gives huge leverage to the police commissioners in their dealings with the chief constable, which raises all my hackles about the problems with this legislation. One point about the need for government amendments on staff transfers related to the risk of mistakes being made because of the shortness of the timetable. I think the Minister spoke of being "hasty".

That brings me to the substantive point. The rush to have elected police commissioners in place in all the police force areas in a matter of months is going to lead to risks and confusion. Staff deserve to be dealt with in a fair, effective and administratively sound way, and I worry that the result of this two-tier tight transfer is going to be major problems for the staff.

The Minister said that some of these points could be dealt with in another place. I would be grateful if she would clarify that, because there are very narrow rules in the process of ping-pong. I would have thought that as she has promised to write to my noble friend, we should come back to this point on Third Reading. I would be grateful if she could clarify whether from her point of view that might be a sensible way in which to allow us to explore these matters in greater detail in the light of her letter to my noble friend.

Baroness Browning: My Lords, I do not think it will be possible to come back to this matter on Third Reading. However, I have given the commitment to have it looked at again in another place.

Lord Hunt of Kings Heath: My Lords, my point is that the rules of ping-pong allow that to happen. You cannot simply use ping-pong to table lots of government amendments. It would be better if we had a further discussion on Third Reading.

Baroness Browning: I was referring only to the chief executive protections for discussion in another place.

Lord Harris of Haringey: My Lords, I realise that we are stretching the rules of Report, but this is important. Presumably when the matter goes to the other place, we can receive back from them only amendments that relate to amendments passed by your Lordships' House. That will produce a very narrow range of areas. Areas on which there is no amendment from your Lordships' House will not be covered. I make this plea for the fourth time that it would be in the Government's interests to postpone Third Reading on this Bill to 5 September. It would lose them only one parliamentary day, but it would enable the Home Office, the Minister's officials and colleagues around the House to spend a little bit more time getting the details right. It would also give the Minister the opportunity to come back on some of these detailed points.

Baroness Henig: My Lords, I have suddenly realised that some days ago I moved an amendment, did I not, about statutory protection for chief executives, and withdrew it because the noble Baroness would not give

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me any assurances on this. Does this not rule out any changes? I am puzzled because I did move this amendment and, as I recall, it was rejected.

Baroness Browning: My Lords, I hear what noble Lords have said about the use of ping-pong and the other place; I am not a business manager and the matter of when Third Reading of any Bill takes place is not in my hands. I have heard what the House has said tonight and I will take it away for further advice.

Lord Hunt of Kings Heath: My Lords, I am very grateful to the Minister, and I would encourage my noble friend to table an amendment on Third Reading to allow us to debate this further. Clearly, there may be some discussions with the usual channels, so I thank the Minister and beg leave to withdraw my amendment.

Amendment 109A withdrawn.

Amendment 110

Moved by Baroness Browning

110: Clause 29, page 21, line 8, after "Schedules" insert "1 (procedure for appointments of senior staff),"

Amendment 110 agreed.

Amendments 111 to 114 not moved.

Amendment 115

Moved by Baroness Browning

115: Clause 29, page 21, line 19, after "Schedule" insert "1,"

Amendment 115 agreed.

Amendment 116 not moved.

Amendment 117

Moved by Baroness Henig

117: After Clause 29, insert the following new Clause-

"Functions of police and crime panels: conduct, complaints and audit committees

(1) Every police and crime panel shall-

(a) deal with complaints and conduct matters in relation to the police and crime commissioner and members of the police and crime panel;

(b) monitor the discharge of the police and crime commissioner's functions to deal with complaints in relation to the police force for its area;

(c) monitor the accounts and audit matters of the relevant Police Commission, police and crime commissioner, and chief constable, as the case may be.

(2) A police and crime panel must establish one or more independent sub-committees to discharge its functions under subsection (1).

(3) For the purpose of subsection (2) an "independent sub-committee" is one which comprises the following members appointed by the police and crime panel-

(a) an independent person to chair the sub-committee who is not a member or a member of staff of a police and crime panel, a local police body, a police force or a local authority;

(b) at least three other independent people to be members of the sub-committee who are not members or members of staff of a police and crime panel, a local policing body, a police force or a local authority;

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(c) up to three members that are police and crime panel members, at least one of whom must be a co-opted member.

(4) In appointing members to an independent sub-committee the police and crime panel must ensure-

(a) that people with sufficient relevant skills and experience are appointed to undertake the role effectively;

(b) it does not appoint a person who has or appears to have a conflict of interest or a personal or prejudicial interest in becoming a member of the sub-committee.

(5) An independent sub-committee may-

(a) make recommendations to the police and crime panel or police and crime commissioner about action to be taken to resolve a complaint or conduct matter;

(b) make recommendations to the police and crime panel, police and crime commissioner or chief constable about audit and finance matters.

(6) If an independent sub-committee makes a recommendation in accordance with subsection (5), the person or body to whom it is made shall have regard to it."

Baroness Henig: My Lords, in moving Amendment 117 I shall speak also to Amendments 144, 148, 149, 150, 154, 156, 232 and 232A.

Amendment 117 confers specific functions for complaints, conduct and audit matters on panels and obliges each panel to establish an independent sub-committee to discharge these functions. It also makes provision about the composition of the independent sub-committee so that it is chaired by an independent person and has a majority of other members independent of the police and of local authorities. The people appointed to that committee must have relevant skills to contribute to its functions and must not have a conflict of interest. The independent sub-committee can make recommendations in relation to conduct or audit matters to the police and crime panel, the commissioner or the chief constable, who must have regard to those recommendations.

Amendment 144 enables panels to require information from chief constables or commissioners about complaints, conduct and audit matters to support this function. Amendments 148 to 150 include provisions about breaching codes of conduct within the proposed new clause that deals with suspending commissioners. At present the standard for suspension is a criminal one and does not include conduct matters. Amendment 154 effectively removes Schedule 7 because this is replaced by the other provisions in my amendments. Amendment 156 provides that a code of conduct will be formulated independently, which will apply to commissioners and panel members. Finally, Amendments 232 and 232A disqualify panel members and commissioners if they fail to sign the code of conduct within a month of assuming office.

I would like to say at the start of this group of amendments that, given the strength of feeling expressed about the Bill's utterly inadequate provisions relating to the conduct of police and crime commissioners and police and crime panels, I am quite alarmed and dismayed that the Government have not put forward far more far-reaching proposals about this at Report. I appreciate that the Minister has put forward some amendments to include the newly created deputy commissioners within the conduct proposals applying to commissioners and also seems

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to have an amendment specifying that the MOPC or Deputy Mayor for Policing and Crime should be covered by the conduct provisions applicable to local government. I may have missed something but I do not think the same provisions have been applied to commissioners or deputy commissioners outside London-perhaps the Minister can clarify. Even if they have been, these are in the process of being changed and I fear they may not prove robust enough for people charged with police governance. Police governance requires even higher standards of personal integrity than would be expected in other areas of local government because of the nature of the role, and my amendments set out how this might be done.

The other issue that my amendments address is the matter of audit. This relates back to a number of concerns addressed at Committee and on the first day of Report about the creation of two corporations sole in each police area both for the commissioner and for the chief officer of police. Doubts were expressed then, and have not been fully addressed by Government, that it was not clear how this structure was consistent with good financial governance; in particular it was not clear how the need to have two separate strands of audit would work for one police fund. The Minister also supplied some assurances on the first day of Report that the Government were serious about applying principles of good governance to the new structures they envisaged for policing. My amendment, like all my amendments, is an attempt to help the Government in this respect. In relation to good governance of financial issues a key requirement is an effective audit committee. My noble friend Lord Harris brought forward some proposals about how this might be done within a non-executive board linked to the office of the commissioner. However, the House rejected this so I am proposing an alternative method of ensuring sound financial and ethical governance.

My amendment proposes that an independent sub-committee should be formed within the police and crime panel which would have responsibility for audit and conduct matters. In relation to financial governance it would have responsibility for audit matters in relation to both the chief officer's remit and the commissioner's office. It would be able to link the audit requirement for one police fund to the two bodies that will manage it. I am not aware of any other accepted method of carrying out financial responsibilities in the corporate context except through an audit committee. The virtue of my proposal is that this will become a function which is to all intents and purposes carried out by independent people, thus avoiding the dangers of politicisation.

An independent sub-committee would also have responsibility for complaints and conduct matters. Incidentally, there is nothing in my amendment to prevent a panel from setting up more than one independent sub-committee, but equally audit and conduct functions could be undertaken by the same committee, if that was appropriate to local circumstances. Either way, my key point is that these independent committees should be comprised largely of independent people; it is essential for good governance and public confidence that this should be the case so there are no doubts about bias or vested interests. It would also help to guard against politically motivated complaints

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and countercomplaints being traded between the commissioner and the panel if the panel is not alone responsible for this but is required to undertake this at arm's length through more independent arrangements.

In relation to both the commissioner and the panel, the suggestion is that the independent sub-committee should handle any complaints against individuals. If there is reason to believe that a complaint involves a serious matter or criminal behaviour, there is nothing to stop the panel referring this to the IPCC, the police, the CPS, HMIC or another appropriate body. It implies, however, that the first port of call for all complaints matters against commissioners and panel members should normally be the independent sub-committee. It should decide how best to handle the complaint and if it is a relatively routine conduct matter it should be able to deal with it. I believe that this rebalances the proposals in the Bill, which effectively suggests that the IPCC should be the first port of call in relation to commissioner complaints and does not address complaints against members of the panel at all.

Because this amendment reverses the proposals in the Bill about the role of the IPCC, which incidentally is likely to be swamped with complaints when it first takes this role on, I have removed Schedule 7 which proposes the opposite. There could still be a role for the IPCC under my amendment, but it is one that I believe should first be filtered at local level by independent committees which could decide whether to escalate the matter. I also want to mention that, in relation to force conduct matters, my amendment suggests that the independent sub-committee should have a role in monitoring how the commissioner is carrying out his or her functions in this regard to provide public reassurance.

Earlier amendments I put forward also suggested that the independent sub-committee should have a role in dealing with disciplinary matters for senior officers to ensure that a commissioner or chief officer is using disciplinary powers appropriately. In order to carry out functions in relation to complaint and audit matters which have an impact on both the commissioner and the force, it is very necessary for the panel to receive the information to enable them to do this, so there is also provision in my amendments that the panels may require information from both commissioners and chief officers in relation to their responsibilities for audit and conduct matters.

The amendment would also remove the current standard by which conduct matters are judged, which is effectively a criminal standard. In Committee I spoke about my concern that this was a ludicrous criterion to use in the context of police governance. Noble Lords will not be surprised to learn that I have not changed my mind. On the basis of zero tolerance, if I may borrow an Americanism, one would address issues of concern at the lowest level. One should not wait for them to become a major problem before taking action. The conduct criteria need to be rebalanced around the standard of acceptable behaviour. Criminal behaviour should be the extreme end of the scale, not the starting point. For this reason I propose a code of conduct, which I shall shortly explain, but first I want to mention that part of the rebalancing exercise should be the inclusion of a clause on the suspension of commissioners

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setting out provisions that would enable them to be suspended for breaches of the code of conduct as well as criminal behaviour.

7 pm

Incidentally, the amendment would also remove the current proposal that the commissioner can be suspended only if he is charged with an offence that carries a maximum sentence of more than two years. Not only is that inconsistent with the general disqualification provisions for a commissioner that are invoked by any criminal offence, which my amendment reaffirms, it is an absurdly high bar for an individual in an office which requires a high level of public trust and confidence. A lot of offences carry a sentence of less than two years, but I do not think the public would want a commissioner to carry on if charged with most of them. I appreciate that we are only talking about charges, but that does not mean the position of the commissioner would be any more tenable or that the public would have any confidence whatever in that person.

Moving on to the code of conduct itself, which I intend should set the framework to describe what unacceptable behaviour is, I believe that it is important that it should be formulated independently. In Committee I suggested that that should be done by the Committee on Standards in Public Life because I cannot think of any body better suited to the role. However, I am happy to listen to alternative suggestions for the appropriate body to carry out this function. The amendment provides that the code of conduct should set out criteria for appropriate standards of behaviour for police commission members, which would include both the commissioner and the panel, and suggests specifically that a commitment to diversity is set out. This would help guard against extremist commissioners or panel members. The code should set out the key criteria about what constitutes a conflict of interest for police commission members.

Solutions around handling conflicts of interest are lacking in the Bill, but in reality this will become the key issue when complaints start being raised against commissioners and panel members. For instance, a ripe area of concern would be if a commissioner was signing contracts involving large amounts of public money with companies in which he might have an interest. The Bill is silent on this possibility, but it would be a real issue for local people. The final amendment in this group provides that police and crime panel members would be disqualified if they did not sign the code of conduct within one month of taking office. This is obviously an important amendment to make the code of conduct enforceable.

In summary, I believe that the proposals for complaints and conduct issues in relation to police and crime panel members and commissioners currently in the Bill are woefully inadequate. My amendments seek to address this by providing constructive solutions. I hope that the Minister will take these concerns seriously, and particularly will consider my suggestion that complaints should be dealt with at the lowest level. We hear a lot in the Bill about devolution to the lowest level and enabling local people to carry things out. What I am suggesting here is a good example of that.

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Local committees should deal with complaints at the first level before escalating them upwards if that proves to be the right thing to do.

Likewise, I have concerns that good financial governance has not been adequately considered. It is essential that audit committees are created to undertake this function. If the Government are intent on splitting audit arrangements into two separate policing bodies for each area-for both the force and the commissioner-the audit committee needs to have oversight of both bodies in order to join up the dots. It will need to make sure that public money is being spent wisely and lawfully, and among other things it must ensure that the same money is not being spent twice, since under the Government's proposals there will be two bodies and one police fund. My amendment suggests how the audit arrangements can be made suitably independent but still coherent with the other proposals about police governance. My other amendments also bring rigour and independence to complaints and conduct matters which I believe are essential to public confidence.

As I have already pointed out, I am seeking to enable the panel and the commissioner to work effectively and ethically as they conduct their business, and I am trying to build on such governance structures as are in the Bill, but I think we are already agreed that what is there is woefully inadequate. I can understand that one of the parties opposite might want the panel to be weak. As I recall, it was after all an afterthought to the original muscular proposal of party political commissioners, but I cannot understand why the Liberal Democrats are unable to go beyond generalities and actually try to put in place tangible and practical "checks and balances". Clearly, what they understand by that phrase is different from my interpretation. What I am trying to do in the area of standards and complaints is prevent us going back 20 years. We are going to go back 20 years in terms of party-political policing, but please do not let us go back 20 years in terms of complaints, audit committees and standards. A lot has been learnt over the past 20 years, and we should take that on board. I beg to move.

Baroness Harris of Richmond: My Lords, I support some of the amendments in this group, to which I have added my name: namely, Amendments 117, 144, 154, 156, 232 and 232A. As we have heard from the noble Baroness, Lady Henig, all these amendments deal with the conduct of PCCs, panel members and audit matters. As we have heard, details on these are virtually absent from the Bill except for very limited PCC complaints matters set out in Schedule 7, which is largely predicated on a criminal standard. In my opinion, this is utterly inadequate for a public position where many other types of inappropriate but not criminal behaviour could arise, so our proposal is to delete Schedule 7 and rebalance the way complaints are dealt with.

The proposals in relation to audit committees are consistent with established good governance principles and provide an additional reassurance about probity, particularly in light of the concerns about corporations sole, about which we have heard so much in your Lordships' House. The amendments require police and crime panels to set up independent sub-committees to deal with both complaints and audit issues on

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behalf of the panel. The noble Baroness went into detail about those, so I will not try to emulate her. They also enable panels to require information from PCCs and chief officers in relation to complaints and audit matters.

Amendments 156, 232 and 232A propose that a code of conduct for police and crime commissioners and panel members, collectively referred to as police commission members, is drawn up independently. It also provides for both PCCs and panel members to be disqualified from office if they fail to sign the code of conduct. Amendment 144, in my submission, should have been dealt with in the fifth group, but it appears here. It provides that panels should be able to require information from both forces and PCCs about complaints and audit matters. Amendments 232 and 232A also provide that panel members and PCCs should be disqualified for failing to sign the code of conduct within a month. These are sensible and practical amendments, which I support wholeheartedly.

Lord Rosser: My Lords, it has already been pointed out that under the current terms of the Bill, the powers of the police and crime panels are limited to a veto over the appointment of the chief constable and a veto over the precept. The purpose of this group of amendments, moved by my noble friend Lady Henig, is to provide police and crime panels with the powers to act as a much more effective check on the way the proposed police and crime commissioners exercise the considerable powers given to them under the terms of the Bill. As my noble friend Lady Henig has said, the main amendments refer specifically to conduct and complaints, and to the issues of accounts and audit.

The amendments provide for an independent sub-committee or sub-committees to deal with the issues of conduct, complaints and audit, with an independent person chairing the sub-committee, at least three other independent members and up to another three who are police and crime panel members, at least one of whom must be a co-opted member. These independent sub-committees must be established by the police and crime panels.

The amendments provide also for a police and crime panel to require information it needs from the police and crime commissioner and they would change the criteria relating to the powers to suspend the police and crime commissioner to include where the commissioner has breached any required standards of conduct pending investigation of the allegations brought against them. The amendments provide also for a code of conduct for police commission members to be formulated by the Committee on Standards in Public Life, covering standards of behaviour, commitment to equalities and conflicts of interest.

The amendments proposed by the Government, to which the Minister will presumably refer, appear to lack the strength and robustness in relation to police and crime panels of those proposed by my noble friend Lady Henig and the noble Baroness, Lady Harris of Richmond. As has been said, those amendments come back to the issue that has been raised on a number of occasions during our discussions on the Bill: namely, where are the checks and balances to address the abuse or misuse of the considerable personal

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powers given to the police and crime commissioners? What is the effective role and purpose of a police and crime panel if it is not to be able to provide part of those checks and balances and thus help ensure that a police and crime commissioner pays regard to the views and concerns of such panels, providing them with the information they need to carry out a meaningful role and thereby helping enhance confidence in the system and structure on the part of the public?

If the Government have really been listening to concerns expressed in your Lordships' House, including over appropriate financial and ethical governance arrangements, they will support the thrust of these amendments.

Lord Shipley: My Lords, parallel to our discussions on this Bill, the Localism Bill is in Committee. In that, there has been discussion both on a code of conduct and on the need for a standards committee. There has been discussion around whether the code of conduct should be voluntary or statutory-there is a strong view, I think, in your Lordships' House that it should be the latter. On standards committees, which are likely to be abolished under the Bill, I also detected in your Lordships' House strong support for each local council having such a committee.

Irrespective of that, there are two major issues of principle here. The first is the role of audit, which, it is important to bear in mind, is not the same as scrutiny and which has statutory force in local government. The second is that audit should be independently led. The powers currently given to the panels are insufficient to deliver those two principles.

Audit is not just about finance; it is also about a whole range of matters including procurement policy, contracting, managing very large budgets, procedures being followed, human resources policies and equal opportunities. An amendment is being made here which I hope the Government might find helpful. It proposes that audit be fundamental part of the checks and balances we need in relation to a police and crime commissioner. Subsection (1) of the proposed new clause is right in stating that every police and crime panel should deal with complaints and conduct matters, monitor the discharge of the police and crime commissioner's functions and monitor the accounts and audit matters of the relevant police commission, police and crime commissioner and chief constable as the case may be.

The question is whether that task should be undertaken simply by the panel or whether a slightly different structure is needed. I think that a different structure is needed, because audit is an important issue when public money is being looked after. There should be two sub-committees-I refer here to subsection (2) of the proposed new clause-one of which looks specifically at audit and the other at conduct and complaints.

The proposal in Amendment 117 relates to the nature of the independence of the sub-committee. To have someone who is independent and appointed according to Nolan principles chair that sub-committee is important. To have then at least three other independent people, balanced by up to three panel members, means that the public would gain confidence in that structure because they would see that there were more independent members than members of the panel.

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At the heart of the problem is the fact that no governance structure lies underneath an elected police and crime commissioner. In other words, there is a perception in the Bill if you simply have direct election of a commissioner there is legitimacy in that. Well, of course there is, but one has to have checks and balances-which the coalition agreement has identified and said have to be strict. Having a clear audit function which is publicly accountable is a matter of fundamental importance; otherwise, those checks and balances cannot be properly delivered.

Lord Wallace of Saltaire: My Lords, I thank the noble Baroness, Lady Henig, for her very detailed amendment and for the care and attention which she has given to this important area of checks and balances. She offers in effect an alternative model to that offered in Clause 32 and Schedule 7 and wishes to replace Schedule 7 with this lengthy and detailed amendment. Schedule 7 sets out that regulations subject to affirmative resolution will be brought to this House to set up a model that is not fundamentally different from what the noble Baroness is proposing, but in which we see the police and crime panel as the body which provides the checks and balances to the police and crime commissioner. To that end, the police and crime panel would set up its own committees, which would be part of the process through which the ongoing process of scrutiny is attended. Schedule 7 talks precisely about that level of complaints which goes underneath criminal activity; that is, inappropriate behaviour, referred to in Clause 32 and Schedule 7 as "conduct matters". Schedule 7 states specifically that the police and crime panel will deal with conduct matters which are below the level of criminality.

The amendment would expand the panel's role as a scrutiny body, but presents an alternative model. We have set out in the Bill a framework which addresses the conduct of commissioners, including complaints against them. We have been careful also to read across-I say this to the noble Lord, Lord Shipley-to the Localism Bill and the changes made there. We are doing our best to balance out some of the problems that we have been left with from the previous regime which arose from the Standards Board for England being exploited by some political parties against their opponents. We stress throughout the Bill that all those involved in the management and scrutiny of policing are subject to the Nolan principles on conduct in public life.

The noble Lord, Lord Shipley, talked about the importance of audit and the extent to which the audit function is allied to but separate from the ongoing process of scrutiny. The police and crime panel will receive audit reports and will be designated as such for the purposes of the Audit Commission Act. The police and crime panel will thus hold to account the police and crime commissioner for the group audit of the police and crime commissioner and the chief constable. The police and crime commissioner will hold the chief constable to account for their audit. It will be entirely appropriate for the police and crime commissioner to form an audit committee, if he or she wishes to do so, in order to monitor the chief constable's fulfilment of that purpose. The police and crime panel, or a committee

11 July 2011 : Column 537

of the police and crime panel, will act as an audit committee for the PCC. The detail of the PCC complaints regime will be in regulations. It is not in the Bill, as Schedule 7 sets out. Regulations will state that complaints not involving criminal allegations will be resolved by the PCP. This is the appropriate-level approach that I suggest the noble Baroness, Lady Henig, is asking for. We are already providing for police and crime panels to be able to require the attendance of the PCC, or members of its staff, in order to answer questions.

The PCP will have a role in referring allegations to the Independent Police Complaints Commission, and in receiving reports from the IPCC. Where the IPCC determines that there are reasonable grounds for an investigation to be established, the PCP shall receive a report of that investigation once it has been concluded. The government amendments, which are intended to address criticisms made of the Government's preferred model, will mean that any criminal allegations against the mayor, the deputy mayor for policing and crime and the deputy PCC would be the subject of scrutiny by the IPCC. I apologise for the acronyms.

In the case of the mayor, criminal allegations would be the subject of scrutiny by the IPCC whether or not the allegation was connected to his or her role as the Mayor's Office for Policing and Crime. Where a complaint against the mayor, or against a deputy mayor for policing and crime who is an Assembly Member, is not serious enough to require investigation by or under the management of the IPCC, the regulations will provide for it to be dealt with under the local government standards legislation that is applicable to the mayor and Members of the Assembly. Subject to the will of Parliament, that legislation will be amended by the Localism Bill, with which a number of the noble Lords taking part in these discussions are at present engaged.

We accept that removing the reference to "other corrupt behaviour" would achieve greater clarity without significantly reducing the scope of the provisions. Behaviour that could be regarded as corrupt is highly likely to involve the commission of some criminal offence in any event. Any complaints or allegations which fall below this test will be left for the police and crime panel, or for a committee of the police and crime panel, to handle. The mechanism for these complaints will also be set out in the regulations. These regulations will be subject to the affirmative resolution procedure, and noble Lords will therefore have the opportunity of debating the finer detail of these procedures when they are introduced to the House. I hope that that provides some assurance to the noble Baroness, Lady Henig, and will persuade her to accept and support government Amendments 151, 152, 153 and so on.

Baroness Hamwee: Will the Minister confirm that the proposed arrangements for audit will be voluntary, in that a commissioner may set up an audit committee or, by definition, may not? If that is right, will he tell the House who undertakes audit and how any report will be presented to the commissioner? I think he said, fairly early on in his response, that the commissioner could receive audit reports. Who would make that report if an audit committee was not set up? I am sorry if I have bowled him too detailed a question at this point.

11 July 2011 : Column 538

Lord Wallace of Saltaire: I thank the noble Baroness for that detailed question. PCCs will have a chief finance officer, with the professional qualifications and the professional obligations of a chief finance officer. If a police and crime commissioner does not choose to have his or her own audit committee, the PCP's audit functions will play a much more active role in scrutinising what the PCC provides, whether by the whole panel or by its own audit committee. The legal obligations for audit are, I am assured, the same as those for police authorities. However, we are very happy to write in detail on that, and a number of these matters will of course come up when the detailed regulations are put for affirmative resolution before the House.

Baroness Henig: My Lords, I have a problem with the response. This is a very big issue about public confidence. It is about putting processes in place that will reassure the public that everything is being done ethically and correctly, and that governance structures meet certain standards. I heard what the noble Lord said. My worry is that some of this is being left to laissez-faire: you can do this or you need not do this; there is a model here that you could follow if you would like to.

These matters are really important. I agree absolutely with the noble Lord, Lord Shipley. Therefore, I do not understand why these serious principles cannot be in the Bill, and why we cannot agree on a way to encapsulate them that meets both what the Government want and what I am asking for. The difference between us is not great.

Serious principles are at stake: for example, the serious principle that audit needs to be carried out and needs to be independently led. I think that we all agree on that. Another principle is that codes of conduct and standards need to be established. Again, they need to be led by an independent committee. A third issue, on which perhaps the Minister feels less strongly than I do, is that low-level complaints should be dealt with first at local level and then escalated; they should not be dealt with by the IPCC and then come down.

Lord Wallace of Saltaire: That is precisely what Schedule 7 states.

Baroness Henig: I have just been reading Schedule 7. As I said, it has an element of laissez-faire about it. If the Government agree about the issues and believe that they are as important as I believe they are, what is the problem with putting them explicitly in the Bill? I cannot understand what the difference is between what I am asking for and what the Government want. Why will they not accept that these principles are very important and therefore state that they will try their best to put them explicitly in the Bill? I do not understand their hesitation. What am I asking for that is so revolutionary that the Government are resisting it? All I am asking for are the most basic principles of good governance. If the Minister is not able to meet my concerns, I will have to test the opinion of the House, because the issues are fundamental and I do not understand the problem that the Minister is facing. Perhaps he would like to reassure me in another way.

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Lord Wallace of Saltaire: I suspect that a great deal of what the noble Baroness is asking for is in regulations under previous legislation, and will be in regulations under this legislation. That is why I fail to see a difficulty. I assure her that we all understand that these are extremely important principles, and that the role of the chief finance officer and of the PCP in looking after the audit will be set out extremely carefully in regulations.

Baroness Henig: The problem for me is that this is like justice; it must not only be done but be seen to be done. Not only must we have high standards and regulations, but the public must be convinced, and must see, that they are there and that they are explicit in the Bill. If we care about these things, we must spell them out. I will find it tragic when noble Lords opposite vote against something that they all believe in, but I cannot avoid it. These matters are so important that I wish to test the opinion of the House.

7.30 pm

Division on Amendment 117

Contents 139; Not-Contents 204.

Amendment 117 disagreed.

Division No. 3


Ahmed, L.
Alton of Liverpool, L.
Armstrong of Hill Top, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Bilston, L.
Boateng, L.
Borrie, L.
Boyd of Duncansby, L.
Bradley, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell-Savours, L.
Carter of Coles, L.
Christopher, L.
Clancarty, E.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Crawley, B.
Davies of Oldham, L.
Dixon, L.
Donaghy, B.
Donoughue, L.
Drake, B.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Erroll, E.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Finlay of Llandaff, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Goldsmith, L.
Gordon of Strathblane, L.
Gould of Potternewton, B.
Grantchester, L.
Grenfell, L.
Grey-Thompson, B.
Grocott, L.
Hanworth, V.
Harris of Haringey, L.
Harris of Richmond, B.
Hart of Chilton, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hollins, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St Davids, B.
Howie of Troon, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Hylton, L.
Jones, L.
Jones of Whitchurch, B.
Jordan, L.
Judd, L.
Kennedy of Southwark, L.
Kilclooney, L.
King of Bow, B.
King of West Bromwich, L.
Kingsmill, B.
Kirkhill, L.
Knight of Weymouth, L.
Layard, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lofthouse of Pontefract, L.
Low of Dalston, L.
McAvoy, L.

11 July 2011 : Column 540

McConnell of Glenscorrodale, L.
McDonagh, B.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
McKenzie of Luton, L.
Mallalieu, B.
Massey of Darwen, B.
Maxton, L.
Morgan, L.
Morgan of Drefelin, B.
Morgan of Ely, B.
Morris of Aberavon, L.
Morris of Yardley, B.
Nye, B.
O'Neill of Clackmannan, L.
Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Quin, B.
Ramsay of Cartvale, B.
Reid of Cardowan, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Rowe-Beddoe, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sheldon, L.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Snape, L.
Soley, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Bolton, B.
Thornton, B.
Tomlinson, L.
Touhig, L.
Tunnicliffe, L. [Teller]
Turner of Camden, B.
Wall of New Barnet, B.
Warner, L.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
Wheeler, B.
Whitaker, B.
Wigley, L.
Wills, L.
Wood of Anfield, L.
Young of Norwood Green, L.


Addington, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Allan of Hallam, L.
Anelay of St Johns, B. [Teller]
Ashdown of Norton-sub-Hamdon, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Benjamin, B.
Berridge, B.
Best, L.
Black of Brentwood, L.
Blackwell, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Boswell of Aynho, L.
Bridgeman, V.
Brinton, B.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Browning, B.
Burnett, L.
Byford, B.
Caithness, E.
Cameron of Dillington, L.
Cathcart, E.
Chester, Bp.
Chidgey, L.
Colwyn, L.
Cope of Berkeley, L.
Cormack, L.
Cotter, L.
Craig of Radley, L.
Crathorne, L.
Crickhowell, L.
Crisp, L.
De Mauley, L.
Dear, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Doocey, B.
D'Souza, B.
Dundee, E.
Dykes, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Edmiston, L.
Elton, L.
Empey, L.
Falkner of Margravine, B.
Faulks, L.
Feldman, L.
Flight, L.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Geddes, L.
German, L.
Glenarthur, L.
Gold, L.
Goodhart, L.
Goodlad, L.
Grade of Yarmouth, L.
Green of Hurstpierpoint, L.
Greenway, L.
Griffiths of Fforestfach, L.
Hamilton of Epsom, L.
Hanham, B.
Henley, L.
Higgins, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Home, E.
Hooper, B.
Howarth of Breckland, B.

11 July 2011 : Column 541

Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Hussain, L.
Hussein-Ece, B.
James of Blackheath, L.
Jenkin of Kennington, B.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Kakkar, L.
Kirkwood of Kirkhope, L.
Kramer, B.
Lawson of Blaby, L.
Leach of Fairford, L.
Lee of Trafford, L.
Lexden, L.
Lingfield, L.
Linklater of Butterstone, B.
Loomba, L.
Lothian, M.
Lucas, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Maginnis of Drumglass, L.
Mancroft, L.
Maples, L.
Marks of Henley-on-Thames, L.
Marland, L.
Marlesford, L.
Mawhinney, L.
Mawson, L.
Mayhew of Twysden, L.
Meacher, B.
Montrose, D.
Morris of Bolton, B.
Naseby, L.
Neuberger, B.
Newton of Braintree, L.
Noakes, B.
Northbrook, L.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Oppenheim-Barnes, B.
Palmer, L.
Palmer of Childs Hill, L.
Pannick, L.
Parminter, B.
Patel, L.
Perry of Southwark, B.
Plumb, L.
Ramsbotham, L.
Randerson, B.
Rawlings, B.
Razzall, L.
Reay, L.
Rennard, L.
Ribeiro, L.
Risby, L.
Rodgers of Quarry Bank, L.
Ryder of Wensum, L.
Sanderson of Bowden, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Selsdon, L.
Shackleton of Belgravia, B.
Sharkey, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Skidelsky, L.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Stowell of Beeston, B.
Strasburger, L.
Strathclyde, L.
Sutherland of Houndwood, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tonge, B.
Tope, L.
True, L.
Tugendhat, L.
Tyler, L.
Tyler of Enfield, B.
Ullswater, V.
Verma, B.
Waddington, L.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Walpole, L.
Wasserman, L.
Wei, L.
Wheatcroft, B.
Wilcox, B.
Willis of Knaresborough, L.
Younger of Leckie, V.

Consideration on Report adjourned until not before 8.42 pm.

Tobacco Advertising and Promotion (Display and Specialist Tobacconists) (England) (Amendment) Regulations 2011

Motion to Regret

8.42 pm

Moved by Baroness Thornton

Relevant documents: 32nd Report from the Merits Committee

Baroness Thornton: My Lords, many noble Lords will be familiar with the part of the Health and Social Care Act 2009 which set in motion the regulations previously in place to enact the implementation of the display legislation to start on 1 October 2011, less than three months from today, to be in force in all shops by October 2013. The same regulations provided that small shops had an additional two years, therefore, to prepare. These regulations will not begin to come into force until April 2012 and will not be completely enforced until April 2015. This is a total delay of four years. The reason for this Motion of regret is to give the House an opportunity to discuss the reasons for such a delay and to ask what bearing the persistent lobbying by tobacco industry-funded organisations may have had on the decision that the Government have taken in this regard.

In its 32nd report, the Merits Committee raised some important points. It suggested that the House might want to seek explanation from the Minister about how the regulations could achieve the Government's policy objectives. It pointed to the inconsistencies of the growth review, which seeks to reduce the regulatory burden on small enterprises. This might account for the delay in implementation for small shops-although I would question this anyway, and will in a moment-but it does not explain why the implementation date for larger shops is being put back. However, I accept that from today, because of the government delays, three months may not be sufficient time for large shops to prepare for this, although they have had quite a lot of notice. The Minister will need to explain the reasoning behind this decision.

The Merits Committee also called attention to the Written Statement on tobacco control issued by the Government on 9 March, in which the Government state that the take-up of smoking by young people is a particular concern. Smoking is an addiction largely taken up in childhood and adolescence and it is crucial to reduce the number of young people taking up smoking in the first place. The report went on to say that nicotine is highly addictive and that each year an estimated 320,000 young people under 16 will try tobacco for the first time and 200,000 of them will become addicted.

We are all aware of the troubling statistics which surround this issue. The Merits Committee went on to say that, taking the Government's own baseline statistics, the 18-month delay being proposed as a result of the amended regulations may result in 4,000 young people and children becoming addicted to tobacco, with the consequent long-term health effects. I should therefore

11 July 2011 : Column 543

be grateful if the Minister would explain whether the Government think that this is a price worth paying for the delay in implementation.

It is worth noting that in March 2009 Norway passed a similar law, which it implemented from January 2010, allowing retailers only nine months to comply and protecting Norwegian children from tobacco marketing five years earlier than the proposals before your Lordships' House. There is no objective evidence that the Norwegian retail trade has suffered unduly.

I understand-but I am sceptical-that the reason given for such an extended delay for small shops has clearly been the concern that the legislation might adversely affect their businesses. I am afraid I have to question this. I believe that the cynical campaign that has been mounted to delay implementation can be shown to be more for the benefit of tobacco manufacturers than for small retailers. It has become increasingly clear that what purported to be a cry of pain from thousands of small retailers was really a covert and dishonest campaign by the tobacco industry.

Members of both Houses of Parliament have been contacted by three groups, each purporting to represent tobacco retailers: the Tobacco Retailers Alliance, the Association of Convenience Stores and the National Federation of Retail Newsagents. We know that the Tobacco Retailers Alliance is, in effect, a wholly owned subsidiary of the Tobacco Manufacturers' Association. It is the most obvious kind of front group; it does not even have its own offices but operates from the Tobacco Manufacturers' Association headquarters. At least that is clear and transparent.

The Association of Convenience Stores can claim a little more independence, and yet it, too, is beholden to manufacturers for subscriptions, sponsorship and advertising. When asked by Stephen Williams MP, the chair of the All Party Parliamentary Group on Smoking and Health, it confirmed that it receives around £100,000 a year from tobacco manufacturers. I would, however, point out that the Association of Convenience Stores has claimed that the cost of compliance would be between £2,000 and £5,000, and yet its own survey of small shops in Ireland found that the average cost of compliance was only £300.

I regret to say that the National Federation of Retail Newsagents has been much less forthcoming, seeking to conceal tobacco industry funding of its far reaching campaign against the display legislation. It recently procured, without any cost to itself, the services of a lobby firm called Hume Brophy, which telephoned and e-mailed the offices of Conservative and Liberal Democrat MPs on its behalf in the weeks before the Government were due to announce their decision on the display ban seeking their support for the repealing of the legislation. The Government are to be congratulated on resisting these blandishments.

It was discovered that Hume Brophy also acted for British American Tobacco and the company was asked whether it was funding the campaign. At first BAT denied this but, following questions at its AGM from Kevin Barron MP, it had to admit that not only had it funded the NFRN campaign against the display

11 July 2011 : Column 544

legislation but that it had also had meetings with Hume Brophy and the NFRN to discuss how it should be taken forward.

Once this was revealed, Hume Brophy wrote to Stephen Williams on 7 June to apologise for its involvement in such covert lobbying-it needs to be congratulated on so doing-and said that the NFRN agreed that it should write to Members of Parliament to explain. John Hume, of Hume Brophy, wrote:

"I understand that a letter to MPs will be forthcoming from the NFRN in the next couple of days".

So far we are not aware of a single MP having received such a letter from the NFRN. In fact, it has refused to send one.

However, instead of accounting to MPs and Peers for its dubious lobbying techniques, the NFRN has attacked the Public Health Minister for attending the All-Party Parliamentary Group on Smoking and Health celebration of the 40th birthday party of Action on Smoking and Health and for presenting ASH with an award from the World Health Organisation for its work. We know of the right honourable Lady's commitment to this issue and she is again to be congratulated on her continuing support. Frankly, rather than attacking the Public Health Minister for her commitment to reducing the harm caused by tobacco, the NFRN should do the decent thing and apologise to MPs for covertly doing the tobacco manufacturers' dirty work.

I believe that the tobacco manufacturers have repeatedly sought to deceive parliamentarians by concealing their central role in the campaign against the display legislation. I would like the Minister's view of this matter. Does he agree with me that this is unacceptable and does he think that it may have undermined in some way the UK's publicly stated commitment to live up to its obligations as a party to the World Health Organisation's Framework Convention on Tobacco Control? Indeed, the Prime Minister is on the record committing this Government to putting an end to what he has called the scandal of secret industry lobbying.

The Tobacco Control Plan for England published in March clearly states:

"The Government takes very seriously its obligation as a Party to the World Health Organisation Framework Convention on Tobacco Control".

A full chapter is devoted to protecting public health policy from the vested interests of the tobacco industry. Is the proposed delay not a concession to exactly those vested interests and the result of a campaign by those who sell cigarettes on behalf of those who make them? Specifically, the Government have affirmed that the tobacco industry had no hand in the development of the tobacco plan, that they would publish details of any policy-related meetings with the industry by any part of government, and that they would require those engaging with the Department of Health on tobacco control to declare any links with or funding from the industry and encourage local authorities to follow that lead. In doing so, the Government are reflecting the mood across the House when during the passage of the Health Bill 2009 the noble Baroness, Lady Northover, moved an amendment to require the publishing of written guidelines on engaging with the tobacco industry. That amendment was withdrawn as the Government

11 July 2011 : Column 545

undertook that the Secretary of State would write to all Cabinet members reminding them of their duties under the World Health Organisation convention.

This is a Motion of regret. I do not seek to overturn the revised regulations, but I would like the Minister to confirm the commitment of the Government to live up to their obligation under Article 5.3 of the World Health Organisation convention to protect their public health policy from all commercial and vested interests of the tobacco industry, and to publish without any further delay details of all policy-related meetings with the tobacco industry and its front groups by any part of Government. I beg to move.

Lord Borrie: My Lords, three years ago the Chief Medical Officer, Sir Liam Donaldson, said that the ban on smoking in enclosed public spaces, which began in 2007, had been a great success in terms of both compliance and improved health. There had been a considerable drop in the number of smokers. I believe that the enclosed spaces ban has indeed been a great success, and for our social environment-a benefit to the whole population.

But in the Health Act 2009 the Labour Government sought to go further and ban the display of cigarettes in shops in order particularly to give even further discouragement to underage smokers. I thought the case for such a ban on display was a thin one. It ignored the fact that in recent years the display has had to be festooned with off-putting words such as "Smoking kills", plus hard hitting pictorial warnings. Moreover, evidence from the likes of Iceland and the Canadian provinces where displays are banned was somewhat speculative as to the effect on smoking among the young.

In the UK we seem to have given up trying to keep a balance between the rights of individuals to do something which is legal-to sell and consume tobacco and cigarettes-and society's desire to help people give up smoking and stop children purchasing cigarettes. The Labour Government ruled that a display ban should come into effect in 2011 for large outlets, but to protect small and medium-sized enterprises to some extent from the costs of the new regulations they should be subject to a ban only from 2013. I leave aside the arguments that this distorts competition between one group of retailers and another, and it may have been justified. Now, because of the recession, the present coalition Government seek to delay the imposition of the ban a further six months for large retailers, and a further 18 months for small retailers. My noble friend Lady Thornton from the opposition Front Bench regrets these delays. I regret I cannot join her in grumbling about the modest delays that have been proposed. There are more restrictions in the offing: from campaigning groups, particularly ASH; a ban on open-air smoking-in parks and beaches, such as applies in parts of Australia-bans on smoking in cars, which would be very difficult to enforce; and, of course, banning the use of brand names, which cropped up during the discussions on the Health Act a few years ago.

There is one country in the world to which I draw the attention of the Government: Bhutan, known perhaps to many walkers on the lower levels of the

11 July 2011 : Column 546

Himalayas as an interesting country somewhere between India and China. I mention Bhutan because all smoking is banned there, as are all displays of cigarettes and tobacco. How far do the Government want to go in their efforts to discourage the young from smoking? It is a splendid objective, but one which sometimes ignores the other aim of allowing people their own individual choices.

Lord Naseby: My Lords, I am not going to repeat what the noble Lord, Lord Borrie, has said, other than to say that I agree 100 per cent with what he has put before your Lordships' House. I will add a couple of points.

It has to be the right of any manufacturer in this country who is trading a lawful product to consult the Government of the day, the Ministers responsible for their industry, and equally members of the Opposition and all Members of Parliament and of the House of Lords, MEPs, et cetera. That has to be its legitimate right, and I hope nobody is suggesting that some civil servant is going to refuse to communicate with this particular industry. It is a legitimate industry at this point; it has the right to trade. These proposals, albeit at a short delay, are still a restraint to trade for our retail businesses.

I had nearly 30 years in advertising and marketing, and one of the things your Lordships' House recognises is skill and experience across whole walks of life. I dealt with a great number of branded goods in all sorts of different fields, some of which were sensitive areas. There is no evidence that having a ban on displays does anything for consumption. What it does do is prevent the consumer from deciding to change brands if they so wish. There is no firm evidence, and it is no good anybody shaking their heads-as the noble Lord, Lord Borrie, has said, the work that has been done in Canada, Iceland and the other places is all peripheral: it would not stand up to the slightest bit of analysis in any other scientific area.

I say to my noble friend that while I am pleased there is a short delay, I hope very much that the Government will think again in this period and certainly not think about plain packaging, which frankly would bring the whole of the package industry down on the neck of the Government and quite rightly so.

8 pm

Baroness Tyler of Enfield: My Lords, it is the clear policy of this Government-and the last one-to put tobacco products out of sight in shops. That must be right. As your Lordships heard when this issue was previously debated, lives are at stake here. There is clear evidence that some 300 lives are lost every day in this country resulting from tobacco-related illnesses. We need to do everything in our power to both prevent young people from taking up the habit and help people trying to quit. Every time we delay implementing this policy, further lives are at risk and more young people will start smoking.

It should also be the policy of this Government to put an end to tobacco industry interference in public health policy-the subject of this Motion. Behind-the-scenes lobbying by the tobacco industry undermines the Government's clear intent in this area and is bad

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for the health of our democracy. Decisions of this nature, affecting people's lives and livelihoods, should be taken transparently. While I know that opinion was mixed during the passage of the Health Bill which became the 2009 Act, there is now broad cross-party consensus that the evidence justifies the prohibition of tobacco displays and that the cost to retailers will not be unreasonable.

The tobacco industry has continued its campaign to undermine the Government's resolve. Thankfully, it was not permitted to interfere in the development of the tobacco control plan for England-we have already heard about that from the noble Baroness, Lady Thornton. The Government should receive credit for taking seriously their duties in that respect. Those commitments include publishing details of meetings between the tobacco industry and government departments. I look forward to that happening in practice.

However, consequently the tobacco industry has used its large profits to seek to obstruct the Government's progress, through the use of front groups and in the courts by the use of judicial review. The combination of legal challenge and what is often called front-group advocacy is used widely by the tobacco industry overseas. Australia is a case in point here. A 5 million-dollar television ad campaign during Australia's recent general election purported to be by the newly formed Alliance of Australian Retailers but was revealed to have been funded by tobacco companies.

Smoke-free legislation, in place in England since July 2007, is among the most popular of recent laws, supported by some 80 per cent of the population. Just as the vast majority of people understand and support the reasons for a ban on drink driving and the compulsory wearing of seat-belts in cars to reduce road traffic deaths, most people understand why a ban on point-of-sale tobacco advertising is needed to improve public health-not least those trying hard to kick the habit because of the harm it is having on their own health and their loved ones. However, the tobacco industry continues to campaign against the law through industry-funded groups. With almost no chance of reintroducing smoking into pubs, the well funded campaigns have been described as a pre-emptive defence against further legislation.

We have already heard about what happened when Mr Stephen Williams MP, chair of the All-Party Group on Smoking and Health, revealed how the tobacco industry used retailers as a front for its campaign through direct cash payments and by paying for the services of lobby firms. What makes this practice particularly objectionable and unjust is that, when tobacco companies pay for secret lobbying to protect the promotion of their products, it is the poorest who suffer most-and not just in terms of cash. Research shows that poor smokers are just as likely to want to, and try to, quit but much less likely to do so successfully. Research also shows that tobacco displays are not only linked to youth smoking but also trigger relapse among smokers trying to quit.

We have heard different accounts of the evidence from the introduction of tobacco advertising bans in countries such as Canada, New Zealand and Norway. There is plenty of evidence to show that they lead to a

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considerable reduction in smoking-indeed, by figures well in excess of the official estimates of the likely impact of the measures coming into effect. This is a Motion of regret. I can think of nothing more regrettable than the fact that behind-the-scenes lobbying has led to the delay in the introduction of these much needed display regulations and that lives will be lost as a result.

Lord Palmer: My Lords, the noble Baroness, Lady Thornton, will know full well how I abhor the habit of smoking, albeit that I am a smoker. I must declare an interest as the convenor of the Lords and Commons Cigar and Pipe Smokers' Club. We ought to be very careful about the hypocrisy of the last Administration. If smoking was completely outlawed, the entire British economy would literally collapse. As such, as much as I admire the noble Baroness, I regret this Motion-particularly in these hard pressed times, most especially for very small retailers.

Lord Judd: My Lords, I strongly support my noble friend and applaud the fact that she has brought this Motion before the House. People have spoken with great emotion about the rights of individuals. There is no proposal before us to ban people from smoking-perhaps there should be. It concerns me that we always dance round the brutal, central point about smoking: that it is known beyond doubt to be a killer. We are condoning a delay in discouraging young people and others from indulging in a habit that kills.

It is not just the smokers themselves but their families, the grief, the cost to future production as people fall ill and the heavy cost on the health service when we already know that the health service is stretched almost beyond all reason. In the arguments of those who are against my noble friend, I find it difficult that they seem to suggest that this is a private matter for the individual. It is not: it has social implications and the cost falls upon society as a whole. It is not just a cost upon the individual who decides to smoke. What evaluations have been made of the cost of this delay? What will be the cost to the health service? How many people will die prematurely who would not otherwise have died? What will the cost be of supporting families where people have died prematurely because of indulging the habit? This is an absolutely inexcusable delay.

In the last 24 hours, we again heard the Prime Minister make great speeches about how he will not brook delay in his decision to decentralise and make sure that people share in responsibility and participate in the kind of society of which he dreams. If he will not brook delay in that circumstance, why does he do so in allowing a practice to go on of encouraging people to take up a habit that is dangerous and results in death? We must face these central facts. If we condone what the Government propose, we condone more death, suffering, cost to the general public and burdens upon the health service. How on earth can that be justified?

Baroness Morgan of Drefelin: My Lords, I thank my noble friend Lady Thornton for tabling this Motion of regret. Like many around this House, I am particularly concerned about the issue of tobacco control and I

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value this opportunity to seek assurances from the Minister on a number of key questions. For the record, I declare my interest as chief executive of the research charity Breast Cancer Campaign and also trustee of Lung Cancer Campaign Carmarthenshire. I have a particular perspective-it is not necessarily an interest-as my father was diagnosed with lung cancer when he was 40 and I was a child. My noble friend Lord Judd talked about the impact on the family. We have not got time to talk about that but I appreciate that comment.

I look forward to hearing from the Minister a full explanation of the rationale for the delay in the implementation of the tobacco advertising and promotion regulations. My noble friend Lord Judd asked what the cost will be. I would particularly like to know who will benefit from this delay. In the Government's analysis, who are the real beneficiaries?

The House has already heard very passionate words about the campaign by the National Federation of Retail Newsagents to delay implementation, about how it was funded by British American Tobacco and that this was not made clear and transparent. I personally feel very concerned about that-if we do not address it now, where will that lead? I very much hope that the Minister can give us the assurance that the noble Baroness, Lady Thornton, is seeking that the Government are still committed to the framework convention on tobacco control, which aims to protect a range of public health policies, and this policy as an example, from vested interests.

We should not think for a moment that our understanding of the impact of smoking on our health is fully understood. We are for ever learning more about the impact of smoking on health and, as our understanding of that impact deepens, so does the case for control. We already know that smoking is the single largest preventable cause of cancer, with smoking causing 28 per cent of all deaths from cancer. Worryingly, an estimated two-thirds of smokers started smoking before they were 18 and almost two-fifths started smoking regularly before the age of 16.

Until recently the link between smoking and breast cancer, a particular interest of mine, was poorly understood, but only a few months ago new evidence emerged demonstrating a clear link between smoking and breast cancer for the first time. While previous reviews had not demonstrated an association between active smoking and breast cancer risk, a cohort study published in the BMJ on 1 March has made a very clear association between active and passive smoking and an increased risk of breast cancer in post-menopausal women, the group of women most likely to develop breast cancer. Significantly higher breast cancer risk was observed in post-menopausal women who are active smokers, with links between the intensity and the duration of smoking-what some might describe as a dose response-as well as a link with the starting age of smoking.

Compared with women who had never smoked, breast cancer risk was increased by 16 per cent among current smokers. This is yet more evidence in favour of the need to control tobacco. Among former smokers, the time since quitting smoking was significantly inversely associated with breast cancer risk. It took 20 years for

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a former smoker's risk to fully reduce. On the point made by the noble Lord, Lord Judd, about whether or not this is a private matter, passive smoking was also looked at in this research very effectively. The same study suggests an association between passive smoking and breast cancer and this is a really important new piece of understanding. Among women who have never smoked, those with the most extensive exposure to passive smoking had a significantly increased risk of breast cancer compared with those who had never been exposed to passive smoking. This is a very important development in our understanding.

While there is still much more to be done to understand the precise link between smoking, both active and passive, and breast cancer, one thing that is crystal clear to me is that women will not benefit from a delay in this measure. The noble Lord, Lord Borrie, makes a very good point about the need for balance in public health policy, but it is important that we recognise that, in that balance, the desire of smokers to quit, the need to prevent young people starting and the fact that our understanding of smoking and the impact on public health continues to unfold need to be factored in.

The case for the tobacco display regulations has already been made. I do not believe that the case for delaying these regulations has been made to the satisfaction of this House and I very much welcome this debate.

8.15 pm

Lord Rennard: My Lords, I begin by declaring an interest. It is a non-financial interest, in that I am an unpaid trustee and director of the charity Action on Smoking and Health. In terms of interest, I could talk at much greater length about the damage done to me and my family by the tobacco industry. Time does not allow a lot of personal background this evening, but I set out some of the reasons why I am so personally opposed to the promotion of tobacco in the debate on the Bill of my noble friend Lord Clement-Jones on banning tobacco advertising. For noble Lords or others who may be interested, this can be found at col. 1683 of Lords Hansardof 2 November 2001. In two sentences this evening, I simply point out that my mother was a heavy smoker and when she died aged 53 of hypertensive heart disease, smoking was undoubtedly a factor. I was 16 at the time and my brothers and I became orphans, as our father had died some years earlier and smoking may have contributed to his death also.

In spite of this background, however, I am not arguing for a complete ban on a legal activity-even though very few people around now would think that tobacco would be made legal if it was not already a legal product. I am simply against forcing people to suffer the ill effects of other people's smoking, I am against encouraging anyone-especially young people-to take up smoking and I am in favour of supporting people who have given up and want to give up. In our debates on the Health Bill two or three years ago, there was a genuine debate in the House about the relative merits of different measures to restrict tobacco consumption and promotion. Some noble Lords put the argument for plain paper packaging, others argued for a ban on point of sale advertising, but it seems very clear now that the reaction of the

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tobacco industry is so vociferously opposed to both measures that they must both be rather effective at reducing consumption.

I was therefore very pleased not very long ago to see the Government's tobacco control plan. This makes clear the basic commitment to ending tobacco displays and will look further at plain paper packaging, which I hope will follow. The plan makes it plain that there cannot be any responsibility deal with those who make and sell cigarettes. Tobacco seems to be an almost uniquely hazardous product that kills half of the people who use it when they follow the manufacturer's instructions.

Arguments have been made today about the rights of smokers, but few smokers who I know think that it is right to encourage young people to smoke. Arguments are put forward, directly or indirectly, by the tobacco manufacturers, but these are the same people who denied for decades that there was any link at all between smoking and cancer. Their arguments should have no credibility whatever in these sorts of debates.

Small shopkeepers have been misled. They were told that the display ban would cost them thousands of pounds when in fact the costs would be minimal, perhaps a few hundred pounds. They should also consider that many of their customers might live rather longer if they did not smoke, and that would surely be good for business.

Claims have been made-bogus claims-that tax revenue from tobacco might fall and sales of illicit cigarettes might increase. Common sense tells us that if this were the case, the tobacco manufacturers would not be so bold about these measures. If more tobacco is consumed, they have more profit but less tax is paid. Other measures must be taken to deal with the illicit trade in tobacco. As my noble friend Lady Tyler has pointed out, evidence from other places that have introduced such bans on point-of-sale advertising shows sales falling but at the same time increases in tax revenues and a fall in illicit sales. The evidence that further measures to restrict the promotion of tobacco would be a good thing is clearly shown by the vociferous opposition to it that we have spoken about today.

Earlier today, I heard the Prime Minister, David Cameron, talk about closing the gap in life expectancy between the richest and the poorest in this country. During his campaign to become leader of my party, I heard the Deputy Prime Minister, Nick Clegg, speak frequently and powerfully, particularly about the gap in life expectancy of people in the poorer parts of Sheffield compared to those in the more affluent parts of Sheffield, just a few miles away. These gaps relate to the prevalence of smoking as much as to any other factor, so it must be right that the Government continue to pursue all the measures set out in their tobacco control plan.

Lord Faulkner of Worcester: My Lords, I am delighted that my noble friend Lady Thornton has given us this opportunity to debate the tobacco display regulations. This goes over old ground a bit, as a number of noble Lords who are taking part today will recall. I welcome the noble Baroness, Lady Tyler of Enfield, to our discussions; her speech was outstanding, and I hope

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that we are going to hear from her again on this subject. She said what many of us agree with and believe needs to be said in this debate.

Although we are debating a Motion of Regret, I would quite like to give the Government a pat on the back for their tobacco control policy. It is a pity that the noble Earl does not have any Conservative supporters behind him supporting the policy. His support is coming from the Liberal Democrat Benches, the Cross Benches and this side of the House, and it would be nice if some of the Conservative supporters of the policy were there too. The Government are sticking pretty closely to the policy of the previous Administration in their approach to the dangers of smoking and in their dealings with the tobacco industry and its lobbyists.

Like my noble friend, I believe that the Government are wrong to delay the introduction of the point-of-sale regulations, not least because there is huge public support for measures designed to make it more difficult for young people and children to start smoking. I remind noble Lords that over 50,000 people signed Cancer Research UK's "Out of Sight, Out of Mind" petition in support of these regulations, and that over 80 per cent of the 96,000 responses to the Department of Health consultation also supported them.

I commend the determination of the Secretary of State to do something that I wish our Government had done but which they shied away from-the introduction of plain packaging for cigarettes. It is no great secret that that was scuppered under the previous Administration at the insistence of the Department for Business, Innovation and Skills. I remember, too, that BIS was not very keen on these point-of-sale measures either. It is good that the Government are pressing on with these because they will have a significant effect on tobacco consumption and particularly on the appeal of tobacco to young people.

I also congratulate the Government on winning a series of legal battles against Imperial Tobacco over the ban on cigarette vending machines. That was another tobacco control measure introduced by the previous Government. It too is important because it will make it significantly harder for children and young people to buy cigarettes.

They have also done the right thing in reaffirming their support for the World Health Organisation's framework convention on tobacco control. I remind your Lordships of the Written Answer in the other place on 16 June by Anne Milton, the noble Earl's colleague and Minister for Public Health. She said:

"The FCTC places obligations on parties to protect the development of public health policy from the vested interests of the tobacco industry. We have made our commitment to this very clear in Chapter 10 of 'Healthy Lives, Healthy People: a Tobacco Control Plan for England'".-[Official Report, Commons, 16/6/11; col. 916W.]

This means that Ministers should not meet representatives of the tobacco industry. I suggest that it is pretty unwise of them to accept hospitality from it as well.

This is not a lawful product like any other. This, as the noble Lord, Lord Rennard, said, is a product that kills if it is used exactly as the manufacturer recommends. It is different from alcohol or chocolate or other

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fattening foods. Tobacco is a killer when used properly, which makes it quite different from all those other products. That is why the Government are right to say that they will not deal with the tobacco industry when framing health policies related to tobacco.

This debate comes just after the fourth anniversary of the smoke-free legislation that came into effect in England. I am pleased that my noble friend Lord Borrie supported it. It was undoubtedly the most important contribution to public health since the Clean Air Act of the 1950s. Such progress is being achieved against a background of consistently strong support from the public and almost total compliance and acceptance by businesses. Despite this, as we have heard from other noble Lords this evening, the tobacco industry still refuses to accept that the party is over. We have all been on the receiving end of a campaign of misinformation, based on lies and fear, that it has funded and orchestrated. The industry's aim, which it admits in documents that have been lodged in the United States, is to throw sand in the gears of regulatory reform wherever it can. One of the ways that it does this is by covertly funding front organisations, covering up its involvement where it can.

For example, the industry is behind the Save our Pubs and Clubs campaign, which seeks to link the decline in the number of pubs to the smoke-free legislation. When your Lordships receive letters from this organisation, bear in mind that it is funded by Japan Tobacco International and FOREST, perhaps the most mendacious lobby group of all in this area. As we have heard this evening, the industry has also attempted to conceal its involvement in the retail newsagents' lobbying campaign against the proposed point of sale restrictions. To begin with, British American Tobacco denied that it was doing it. On 27 April, the Guardian carried a report in which a spokeswoman for BAT said:

"To accuse us of underhand tactics and the funding of an independent retailer organisation ... via a PR agency that we use solely for work related to the European wide problem of tobacco smuggling, is untrue".

One day later, on 28 April, a second report appeared in the Guardian under the headline:

"British American Tobacco admits funding campaign against display ban".

This revelation that the campaign was funded by BAT is significant. Under the international guidelines to which I referred earlier, the United Kingdom Government are obliged to ensure the drafting of all legislation is free from the influence of the tobacco industry.

We have heard of research from Ireland that shows that the implementation of these measures there has not harmed small businesses. It also shows that tobacco point-of-sale displays influence young people's perception of smoking as a normal, adult activity. We know that the majority of people start smoking before the age of 19. Therefore, it is crucial that we do all in our power to ensure that young people do not see smoking as cool or a social norm. It is a pity that these regulations have been delayed, but I strongly support what the Government are doing elsewhere on tobacco control policy, and I hope that they will press on with it.

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Baroness Gale: My Lords, I support my noble friend Lady Thornton in regretting that the Government are delaying the implementation of this important piece of legislation. I find it very difficult to understand why the Government are prepared to take such risks with the health of our children and young people. All the evidence shows that tobacco advertising encourages children and young people to start smoking. Most people start smoking when they are young-some as young as eight years of age. I met a 14 year-old the other day who had started smoking when she was nine. Even today children are smoking, despite all the measures that have been put in place. That is why this legislation should be in place-to do everything that can be done to prevent children being tempted. They are unaware of the health dangers and, surely, legislation should be enacted to shield them from the dangers of smoking.

According to a statement from the Department of Health, deferring this legislation in accordance with the Growth Review, announced by the Chancellor and the Secretary of State for Business Innovation and Skills in November 2010, the Government's overriding priority is to return the UK economy to balanced sustainable growth, in particular by reducing the regulatory burden on business. The Department of Health says that the priority was to amend the commencement dates in order to provide confirmation for business as soon as possible. The Department of Health also said that it fully recognises that this will defer the public health benefits and that it fully took this into account in reaching its decision. I find it hard to understand that this Government are prepared to delay the implementation in the full knowledge of the damage that will be done mainly to young people and children. There is so much evidence to show that children and young people are heavily influenced by the advertising of tobacco. Surely this should be the Government's overriding priority-the health of children and young people.

If we accept the figures set out in the impact assessment to the Health Act 2009, this delay could mean that up to 4,000 more young people in England will start smoking. We know that the long-term effects on their health will be detrimental and at great cost to themselves, and that there will be a financial cost to long-term healthcare as a result.

On the two policy aims of the regulations, the Department of Health says it expects to amend the display regulations to mitigate the burdens on business, while maintaining the expected health gains. Can the Minister say how this can possibly be achieved, because one policy aim contradicts the other? The Government cannot have it both ways. Children and young people should be our top priority.

8.30 pm

Lord Stoddart of Swindon: My Lords, I had better declare an interest, as did the noble Lord, Lord Palmer, in that I am an associate member of the Lords and Commons Cigar and Pipe Smokers' Club. I am an associate member because I do not smoke, and I therefore cannot be a full member. Nevertheless, I have sympathy with the club's aims, which are to give some support and protection to people who smoke.

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Smoking is, as we have heard tonight, perfectly legal. In spite of all the attacks made on smokers, at least 21 per cent of the population still decides to smoke. In spite of all the measures that have been taken and all the high costs of cigarettes, a fifth of the population still wishes to smoke. Their rights deserve just as much consideration as in any other practice, whatever that may be. They are entitled to the same consideration and protection.

I am most surprised that these regulations from the coalition Government are before the House tonight, because I well remember during our discussion in Committee on the Health Bill in 2009 that the noble Earl, Lord Howe, was very doubtful about these measures of screening tobacco products from the public. It really is an imposition that retailers are prohibited from displaying a legal commodity. That undermines freedom. Make no mistake about it; if you allow people to sell a product and say that it is legal to sell it, why on earth then say that although they want to sell it and advertise it, they may not do so-they may not display to people that they can buy a certain product in their shop?

There is a lot of hypocrisy about smoking. If people believe, as the noble Lord, Lord Judd, and others do, that this is the most dangerous product in the world, they ought to come forward bravely and ban it. That is the answer. Why is it not banned? There are probably two reasons. The first is because of the £10 billion which the Treasury gets every year from the sale of tobacco. The Treasury loves to have that money; make no mistake about that. The other reason is that the cost of enforcing the ban would be so high that it would probably have to spend another £10 billion doing so.

Lord Judd: Of course it is powerful to argue that people like me should come out for a ban. We recognise that there is a balance between individual freedom and what is decided about society. That arises in the context of smoking. We are dealing with measures that delay the introduction of a scheme to discourage people from taking up the habit. We are dealing with a proactive situation that is encouraging people to smoke. There is a fundamental difference here.

Lord Stoddart of Swindon: There is absolutely no difference at all. The brewers and the distillers wish to promote their product. They want people to start drinking as soon as possible because they make big profits out of people drinking. The noble Lord, Lord Judd, waxed eloquent about the dangers of tobacco. I remind him about the even worse dangers of alcohol addiction. Why are we not doing the same about alcohol? If people smoke, they do not go home at night and beat their wives and children. People who drink too much alcohol do that. Indeed, they kill people outside pubs. Cirrhosis of the liver kills many people at a very young age. Why are we allowing drinks to be displayed? Why do we not tax alcohol in the way that tobacco is taxed?

There are lots of arguments against using this huge sledgehammer against tobacco retailers in particular. We know that a lot of pubs have closed

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because of the smoking ban in public places. How many retailers will go out of business because of this ban? I have been a small retailer myself, and not everyone realises that the very fact that cigarettes are on display and people go in and buy them helps retailers to sell other things as well. They are not just tobacco retailers, they retail a whole host of other things, and the fact that they are selling and displaying tobacco helps them to sell other products.

I really would like to speak for a long time about this-after all, so far the debate has been rather one-sided-but I realise that time is getting on, there is another Bill to be discussed and the Minister has yet to reply. I repeat that I am surprised that we have this legislation before us tonight, and I will allow the Minister to tell us all about it.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, may I begin by saying how much I welcome the opportunity to debate the noble Baroness's Motion, and that I recognise the key role she played in taking provisions through your Lordships' House to end the display of tobacco in shops? I add my thanks to all noble Lords who have spoken.

The Healthy Lives, Healthy People White Paper sets out the coalition Government's determination to improve the health of the nation and the health of the poorest fastest. The tobacco control plan for England, published on 9 March, was the first of a number of follow-on documents on how we will improve public health in specific areas. I welcome the positive remarks made by the noble Lord, Lord Faulkner, and others about that plan.

Smoking remains one of our most significant public health challenges, and causes over 80,000 premature deaths in England alone each year. While rates of smoking have continued to decline over the past decades, 21 per cent of adults in England still smoke. Smoking contributes significantly to health inequalities and is the single biggest cause of inequalities in death rates between the richest and the poorest in our communities. Smoking also costs society a great deal. Treating smoking-related disease is estimated to cost the NHS in England some £2.7 billion every year, a point brought out very well by the noble Lord, Lord Judd. Some 5 per cent of hospital admissions for people aged 35 and over in England each year are attributed to smoking.

It is clear that we must keep up the momentum to reduce the harm of tobacco use. The tobacco control plan sets out how comprehensive tobacco control will be delivered over the next five years within the new public health system. The take-up of smoking by young people is a particular concern. Smoking is an addiction largely taken up in childhood and adolescence, so it is crucial to reduce the number of young people taking up smoking in the first place. Nicotine is extremely addictive and young people can develop a dependence on tobacco rapidly. Each year in England an estimated 320,000 children under 16 try smoking for the first time, and the majority of smokers say they were smoking regularly by the age of 18.

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Lord Stoddart of Swindon: The noble Earl, Lord Howe, has just said that nicotine is very addictive. Is he aware that a cigarette that delivers nicotine to the body without smoke has been developed? Do the Government plan to ban non-smoking cigarettes?

Earl Howe: The noble Lord asks a very interesting question. I have seen some papers in the department about that particular product. I am not in a position yet to give the noble Lord any definitive answer, but I would be glad to do so once the Government have reached a view on the matter. It is a very new development.

I mentioned just now that the majority of smokers say that they were smoking regularly by the age of 18-that is, before the age at which you can now lawfully purchase tobacco products. However, we also recognise that while nicotine keeps tobacco users physically dependent, a wide range of social and behavioural factors encourage young people to take up smoking and make it harder for tobacco users to quit. To promote health and well-being we will work to encourage communities across England to reshape social norms so that tobacco becomes less desirable, less acceptable and less accessible. We want all communities to see a tobacco-free world as the norm and we aim to stop the perpetuation of smoking from one generation to the next. To reduce smoking uptake by young people, we all need to influence the adult world in which they grow up. We must also remove the considerable social barriers that smokers face when they are trying to quit.

One focus of the Government's tobacco control plan is that we must do as much as we can to stop the recruitment of new young smokers. We know that teenagers are susceptible to experimenting even when there is clear evidence of the dangers. The noble Lord, Lord Stoddart, expressed some surprise that the Government have decided to maintain the ban on tobacco displays. We looked at the evidence and there is evidence that the display of tobacco in shops can promote smoking. We believe that eye-catching displays encourage young people to try smoking. Displays also undermine attempts by adults to quit by tempting them to make impulse buys of tobacco. That is why we are implementing the legislation set out in the Health Act 2009, and related regulations, to end tobacco displays in shops. This will help to change perceptions of the social norms around smoking, especially by young people, who are often the target of tobacco promotion.

However, the Government are also committed to amending the display regulations to mitigate burdens on business. The growth review announced by my right honourable friend the Chancellor of the Exchequer in November last year aims to reduce the regulatory burden on business, particularly on small and medium-sized enterprises and micro-businesses. In line with this priority, as set out in my Written Ministerial Statement made to your Lordships' House when the tobacco control plan was published on 9 March, we will both delay the implementation of the tobacco display legislation and make it more practical for shopkeepers. The amending regulations that we are discussing today implement the first step by changing

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the start dates so that the legislation will apply to large stores on 6 April next year and on 6 April 2015 to all other stores, including small shops.

Of course, delaying implementation will delay the expected public health benefits, but this is only one initiative within our tobacco control plan. The noble Lord, Lord Judd, and the noble Baroness, Lady Gale, picked up the point we made that we still aim to maintain the public health gains. The evidence shows that limiting displays can be expected to reduce the number of young people taking up smoking and help quit attempts by adults, but we do not expect an immediate, dramatic effect on rates of smoking prevalence. The effect will be long term as successive cohorts of young people grow up in a world of free of tobacco displays.

Lord Judd: Perhaps the Minister was intending to go on and make this point, in which case I apologise, but will he inform the House whether the cost of the delay has been estimated, and if so, what it is?

Earl Howe: My Lords, I had planned to carry on and cover that point. In broad terms, the impact of this is being recalibrated, and we will publish further figures in due course.

Experience across the world shows that success in reducing smoking prevalence requires a comprehensive approach; the tobacco control plan for England sets out our strategy for the next five years, and it therefore includes a range of initiatives that will help to reduce smoking uptake and in particular help us to achieve our national ambition to reduce rates of regular smoking among 15 year-olds in England to 12 per cent or less by the end of 2015, from 15 per cent in 2009.

The Government are taking the following actions to reduce smoking by young people. We will end tobacco sales from vending machines on 1 October this year. This will remove an easily accessible, and often unsupervised, source of cigarettes for under-age young people. The Government will review sources of tobacco for young people. The Department of Health has commissioned an academic review of the evidence about this. The report will be completed late this year and we will then be able to determine what further action might be needed to reduce under-age access to tobacco. We will encourage and support the effective enforcement of the law on under-age tobacco sales by local authorities, and encourage local authorities and their partners to play an active part in helping to change social norms around smoking, particularly through using behavioural insights. We will also explore whether the internet is being used to promote tobacco use to young people and, if so, to consider what more can be done on a global level. In addition, as part of a new tobacco marketing communication plan to be published later this year, we will explore ways in which to provide young people with information about risky behaviours that can affect their health, including tobacco use, and to help them to resist pressures to take up smoking. This work is likely to involve digital media, because of their popularity, and reach among young people.

I impress on the House that the regulations that we are debating tonight are only one part of a concerted effort to reduce smoking prevalence among young

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people. My Written Statement set out how the regulations will be further amended, and I want to reassure the House and other interested parties, in particular retailers with large stores, that the Government will publish draft amending regulations as soon as possible. These will set out how the legislation will work in detail. By moving forward in this way, we believe we have struck the right balance between improving public health and supporting businesses during these difficult economic times. This is in keeping with our deregulation agenda, while continuing to make long-term progress to protect public health.

The noble Baroness, Lady Morgan of Drefelin, asked me specifically who would benefit from the delay in implementation. Our decision to delay implementation will most benefit the micro and small businesses that are so vital to communities across this country, and the delay is entirely in line with the principle set out in the Government's growth review.

We have also heard about how the tobacco industry has been involved, and has involved others, in lobbying against tobacco control legislation. While we want to be sure that all voices are heard in debates on new legislation and policies, there is an inevitable tension between policies that are intended to reduce smoking prevalence and the interests of those who profit from the promotion and sale of tobacco, including tobacco companies and, to a lesser extent, retailers that sell tobacco products. I am sure noble Lords will agree that we need transparency in lobbying.

The Department of Health works hard to develop workable, balanced tobacco control policies and invites views, not least through formal consultation exercises, from all those with an interest in, or who may be affected by, proposed policies, including retailers. However, as set out in the tobacco control plan, the Government take very seriously their obligations as a party to the World Health Organisation's Framework Convention on Tobacco Control. The FCTC places treaty obligations on parties to protect the development of public health policy from the vested interests of the tobacco industry. To ensure transparency, in future all organisations with which the Department of Health liaises on tobacco control, including through responding to consultation exercises, will be asked to disclose any links with, or funding received from, the tobacco industry. We want all parties that engage with the Government to be honest and transparent when it comes to vested interests.

Lord Naseby: Can the Minister clarify why whoever is lobbying should not disclose where their funding is coming from. Why is it specific to the tobacco industry? There are all sorts of bodies out there with views which may not seem obvious to the Government but underneath there is some objective. Why not have total transparency so that anybody who lobbies discloses where the money has come from?

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