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House of Lords

Monday, 2 July 2012.

2.30 pm

Prayers—read by the Lord Bishop of Lichfield.

Civil Service: Training and Development


2.37 pm

Asked by Baroness Tyler of Enfield

To ask Her Majesty’s Government, in the light of reductions in Civil Service numbers and training budgets, and the closure of the National School of Government, what steps they are taking to ensure that civil servants receive the necessary training and development to provide high-quality policy advice to Ministers.

Lord Wallace of Saltaire: My Lords, as the House will be aware, we published the Civil Service reform plan on 19 June, which set out recommendations on training and development, among other proposals. Civil Service Learning is now in place to provide greater choice, flexibility, quality and value for money. It ensures that the current and future skills requirements of civil servants are met. Civil servants can access more than 130 e-learning resources, 75 classroom-based courses and 4,000 learning resources through the Civil Service Learning website. The new policy curriculum is also available through Civil Service Learning. It provides a comprehensive range of policy training and was developed in consultation with people currently working on policy and with subject matter experts in specific policy areas.

Baroness Tyler of Enfield: I thank the Minister for his helpful reply. Given that these reforms are coming at a time when the Civil Service is reducing in size by some 23%, thereby putting a premium on sharper and more agile policy advice, which as the reform plan itself says should be clearly based on “robust evidence”, will the Minister explain what evidence exists to show that opening up the policy development process to external competition, including from the private sector, will lead to higher quality, more cost-effective and, above all, impartial policy advice?

Lord Wallace of Saltaire: My Lords, it is not entirely the case that all Civil Service training was provided by the public sector before this. The evidence is to be found in particular in the rather critical NAO report of last year. Among other things, it quotes the Civil Service people survey of 2010, which said that,

“only 48 per cent of civil servants said that the learning and development they had received in the last 12 months had helped them to be better at their job”.

A lot in the NAO report was critical of the inefficient and divided provision of training, particularly between different departments. It discovered among other things that the cost of comparable courses in different departments varied by a factor of four.

Lord Peston: My Lords, do we not have to be extremely careful in going down this kind of path? We have a first-class Civil Service that is actually the envy of

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the rest of the world. Certainly, when I was a special adviser, although I had my disagreements, they were disagreements at a level that enabled me to appreciate both the integrity of civil servants and how excellent they are. Are we not in danger of undermining the Civil Service with this kind of approach, rather than appreciating the excellent people who work for us?

Lord Wallace of Saltaire: My Lords, I would have loved to have met the noble Lord when he was a special adviser to observe his skills. We are working with Ashridge, Roffey Park, Westminster Explained and a number of other providers. As we have been working with them, we do not see that this in any sense endangers the impartiality or quality of the Civil Service. Roffey Park, as noble Lords know, is a non-profit making organisation that provides top-class skills. We think that there are advantages in having central control of the Civil Service buy-in, which is Civil Service Learning, but with a variety of provision by a variety of providers.

Lord Hennessy of Nympsfield: Could the Minister explain to the House exactly what was wrong with the National School of Government?

Lord Wallace of Saltaire: My Lords, the National School of Government provided extensive residential accommodation for extensive residential courses. The Civil Service and other providers are moving away from extensive residential courses to shorter ones, very often for one day each. It is intended that the different mix will be better met and more efficiently provided by a range of different providers.

Baroness Fookes: My Lords, are civil servants given any training in the precise workings of this place and, indeed, the other place? Sometimes, the impression is given that the ignorance is complete.

Lord Wallace of Saltaire: My Lords, certainly there are training courses for civil servants in how to work with Parliament, particularly for those going into private offices. I have met a number of civil servants who have been through such courses.

Lord Anderson of Swansea: Does not the Minister protest too much? Is not the key driver of this move away from the school and a return to learning on the job simply cost saving?

Lord Wallace of Saltaire: It is not the key driver, but it is one factor. The National Audit Office report’s discovery led from the next generation human resources proposals of 2009, so we are talking about some continuity from one Government to another. The discovery that the provision across different departments was so remarkably unco-ordinated and could be provided much more cheaply should naturally be taken into account by any Government—the previous one or this.

Lord Hunt of Wirral: My Lords, I warmly welcome these reforms. I declare an interest as a former Civil Service Minister and underpin the remarks that have been made. Does the Minister appreciate the importance of recognising the integrity, independence and impartiality of our Civil Service, while embracing the need for further education and training?

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Lord Wallace of Saltaire: My Lords, I am very happy to put on the record yet again our deep commitment to a high-quality and impartial Civil Service. I remind everyone that the challenges to the Civil Service at the moment—the data revolution and a whole set of new ways of working—are such that we need to look on a regular basis at the balance of training provided and the way in which one may necessarily have to change to adjust to different circumstances.

Baroness Hayter of Kentish Town: My Lords, I am tempted to ask whether the Government are now training civil servants to deal with ministerial U-turns, but I will not. I have a serious question. Last week, the Prime Minister set out a new programme of welfare reform: not for this Government, but for after the next general election. Will civil servants now be working on that policy agenda and preparing policy advice for the ideas set out by the Prime Minister?

Lord Wallace of Saltaire: My Lords, that was a good joke. The Prime Minister’s speech set out proposals for what he thought the Conservative Party should do post-2015. That is rather beyond my brief.

Lord Cormack: My Lords, what is being done to ensure that civil servants communicate in plain, concise English? Will he arrange for all civil servants to be given a copy of Sir Ernest Gower’s classic work, The Complete Plain Words, so that they write and speak English and we get rid of the appalling jargon that disfigures so many public documents?

Lord Wallace of Saltaire: I thought that the noble Lord was going to pay attention to Civil Service spelling mistakes. Perhaps I should inform the House that I discovered some rather bad spelling mistakes in Hansard last week, which I have reported to the Hansard writers.

Baroness Symons of Vernham Dean: My Lords, perhaps the Minister could answer the question put by my noble friend on the Front Bench. Is the Civil Service now being asked to work on the welfare reforms spelt out by the Prime Minister the other day? It is a simple question.

Lord Wallace of Saltaire: My Lords, the Prime Minister was setting out some long-term thoughts on how the policy should be developed after 2015. I have no knowledge of the Civil Service being asked to work on that at present.

National Offender Management Service: Indeterminate Sentences


2.45 pm

Asked by Lord Ramsbotham

To ask Her Majesty’s Government what progress the National Offender Management Service prisoner co-ordination group is making in preparing individual release plans for those serving Indeterminate Sentences for Public Protection.

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The Minister of State, Ministry of Justice (Lord McNally): My Lords, the role of the indeterminate sentence prisoners co-ordination group is not to prepare individual release plans. It is for the prisoner’s offender supervisor and offender manager to draw up a sentence plan to assess the prisoner’s risk factors and then to propose a risk management plan to the Parole Board once the prisoner has completed his tariff.

Lord Ramsbotham: My Lords, I thank the Minister for that reply. The problem is that 6,500 prisoners are serving indeterminate sentences, with 3,500 over their tariff and 311 more than four years over it. The problem was put into sharp relief last week at an inquest in south Wales into the death of an indeterminate sentence prisoner who was a year over his tariff. Two weeks before he took his own life he was told at the prison to which he had just been moved that not only was the course that the Parole Board required him to complete before release not available in that prison, he was told that no such course would be available for two to three years. This problem needs to be tackled with urgency. Whether I have the name of the board right or not, I hope that the Minister will be able to assure the House that someone in NOMS is tackling individual problems with urgency.

Lord McNally: As I explained in my original reply, there is an individual case manager for each prisoner. However, I understand the noble Lord’s point. One of the original criticisms of this method of sentencing was that it created a Catch-22 whereby although you have to carry out a range of courses in order to make yourself available for parole and to convince the Parole Board that you are ready for release, those courses are not always available. Part of the reform programme that we have put in place, in parallel to the changes in the LASPO Act, is to try to make sure that prisoners are able to undertake reform training, and also to give the Parole Board greater flexibility in making its judgments on whether other aspects, rather than specific training programmes, can be taken into account in order to justify freedom. It is a difficult and delicate business. We are dealing with people who are in prison for serious offences and there must be a proper process to assess whether they should be allowed to go back into the community.

Lord Dholakia: My Lords, the Government were right to abolish IPP sentences—they were bad for the criminal justice system and bad for the prisons. As has been said, more than 6,000 inmates are currently in our prisons under IPP. If there is such a considerable delay in providing offender reform courses for inmates, could not the Prison Service use volunteers to help deal with it? Many prisoners also often find that despite assurances from the Parole Board about open conditions and release, the Prison Service is not meeting those assurances.

Lord McNally: That is why, in answering the noble Lord, Lord Ramsbotham, I referred to the fact that the Parole Board can now take into account other aspects of prisoner activity that might contribute to the assessment of whether prisoners can be safely released. We are also making sure that there is much

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more co-ordination of the policy so that there is an understanding in the various prisons of what is available and so that much greater use is made of compulsory intervention plans. However, it is a difficult problem. As the noble Lord, Lord Ramsbotham, said, there is a build-up of more than 6,500 prisoners on IPP sentences, and it will take time to unwind the system. We are unwinding it, and more prisoners are being released after proper assessment. However, we cannot simply release prisoners who have received such a sentence because of the severity of their crime or the assessment that they are a long-term danger to the public.

Lord Lloyd of Berwick: My Lords, the noble Lord has clearly taken on board that this is a very serious question for those who are beyond their tariff. Can he give any indication of when the Parole Board is likely to see them? Can he suggest whether there is not some way that those who have committed less serious crimes could be released by some form of executive action?

Lord McNally: The LASPO Act provides for the possibility of executive action on this matter and for a change in the balance of judgment to be made by the Parole Board. For the moment the Government are waiting to see the impact on overall numbers of the new systems that we have put in place. About twice as many IPP prisoners are being released now than were released two years ago, but we are also facing the problem that judges are still imposing IPPs. I believe that we will have the first net reduction this year, with more people being released than are coming in under the new system. We hope to be able to announce later this year when the new sentencing system included in the LASPO Act will be introduced.

Transport: Road Traffic


2.52 pm

Asked by Lord Sheldon

To ask Her Majesty’s Government what action they have taken to improve the flow of road traffic in the United Kingdom.

Earl Attlee: My Lords, the Government provide funding and guidance to local authorities to support them in managing congestion on the local road network, including reducing the impact of roadworks. We have made better regulations to allow pioneer lane-rental schemes, are consulting on plans for roadworks permit schemes, and are increasing roadworks overrun charges. On the strategic road network, measures are being introduced to shorten the length of time that motorways are closed following incidents.

Lord Sheldon: I thank the noble Earl for that very useful Answer. However, the improvement of road traffic is much limited by more than 90% of all passenger transport. When there are rounds of crossroads, they reduce crashes by more than 50%, and stop signs at intersections have also reduced crashes dramatically by more than 50%. The other means that the noble Earl has put forward are very useful, but can he suggest how we are going to handle all these problems?

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Earl Attlee: My Lords, I did not quite catch the proposal that the noble Lord was making. I think that he was talking about roundabouts as a means of reducing accidents. Roundabouts indeed reduce accidents because the collisions are less brutal and therefore any injuries are less serious, but they increase congestion a bit because the throughput is not as high as with a grade separated junction, which is even safer. In my initial Answer I talked about a range of measures to reduce congestion, which I know can be infuriating for all motorists.

Baroness Chalker of Wallasey: My Lords, can my noble friend persuade more boroughs to use lane rental than are currently doing so? Some are good at using lane rental; others are very limited in using it. In the past it has been a good way of speeding up repairs, thus reducing road congestion. Some activity needs to be taken with individual boroughs.

Earl Attlee: My Lords, my noble friend makes a good point. Through the Traffic Management Act 2004, all local authorities have a “network management duty” to secure,

“the expeditious movement of traffic”,

including pedestrians, on their highway network, and to facilitate the same on the networks of other authorities. Local authorities are required to appoint a traffic manager to oversee this obligation and must monitor their own performance, but my noble friend will understand that we also have the spirit of localism.

Lord Broers: Does the Minister agree that the Technology Strategy Board has made a wise decision in assigning one of the new catapults to transport? One of the main aims of that catapult will be to develop a comprehensive, UK-wide model for transport that will operate in real time and be able to react to emergency situations. I declare my interest as chair of the Transport Knowledge Transfer Network that led to this proposal.

Earl Attlee: My Lords, the noble Lord makes an important point about what we can achieve with technology. It is particularly important for the Highways Agency to be able to measure where congestion is and then to use its variable message signs to advise motorists to seek another route. In addition, although satnav navigation systems are in their infancy, we are starting to get the full benefit from them.

Lord Davies of Oldham: My Lords, is the Minister aware that during this past year the Mayor of London has pursued a smoothing traffic flow priority, which prioritises motorists over safety? Is he further aware that pedestrian deaths are up by 33% during this period and cyclist deaths by more than 21%? I express the hope that, in answering this question, the Minister’s brief will be more secure than it was last week when he answered a question of mine on fares to and from the Scilly Isles.

Earl Attlee: My Lords, I am confident about the accuracy of this brief, but regret that during our discussions last Monday I stated that the return fare on the “Scillonian III” for Scilly Isles residents was £20.50. However, this is in fact the single fare and

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there may be other qualifications. I am very sorry about this, since it made my position appear stronger than it really was, to the detriment of the noble Lord’s.

The noble Lord asked me detailed questions about the management of traffic in London. He will appreciate that that is a matter for the mayor. It is disappointing that overall fatalities have increased slightly, the reasons for which we have not yet examined fully.

Lord Bradshaw: Part 6 of the Traffic Management Act 2004, to which the Minister has referred, gives local authorities powers to manage traffic—for example, yellow box junctions and right turns—which they can enforce through their own staff. However, is the Minister aware that the regulations have never been extended outside London? He should take it from me that bus services would be immeasurably improved if local authorities could discipline people who block the highway.

Earl Attlee: My Lords, I shall draw my noble friend’s point to the attention of Mr Norman Baker, the Minister responsible.

Lord Tomlinson: My Lords, during this Question Time, we have heard reference to catapults and lane rentals. I am aware of the injunction that we heard from the noble Lord, Lord Cormack, for us to use plain, simple English. Can somebody please advise us what a catapult and a lane rental are?

Earl Attlee: My Lords, I said to the noble Lord, Lord Davies of Oldham, that my brief was accurate, but it does not include anything about catapults. However, I agreed that technology would provide benefits.

Lord Crickhowell: My Lords, is my noble friend aware that, while the British public have been content to face disruption due to the jubilee and are perhaps slightly less content about disruption due to the Olympic Games, they would find it intolerable to have the whole of central London brought to a standstill, perhaps for several weeks in preparation and afterwards, for a grand prix to be held?

Earl Attlee: My Lords, I anticipated an Olympics question. My first advice to all users of transport is to visit http://www.getaheadofthegames.com, which provides extremely good advice on how to avoid congestion. It is inevitable that there will be some congestion if we are to have a successful Games.

NHS: Definition of Exceptional Case


3 pm

Asked by Baroness Masham of Ilton

To ask Her Majesty’s Government what is the definition of an exceptional case needing surgical and medical care through the National Health Service, and who makes the decision.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, the department has not issued definitive guidance on this difficult

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issue. Indeed, there is a paradox in the whole concept of defining an exception. However, good practice in the NHS suggests that a patient can be considered for treatment which is not normally provided locally if the patient has exceptional clinical need or is likely to derive exceptional clinical benefit. The decision is made by the local commissioner.

Baroness Masham of Ilton: My Lords, I thank the noble Earl for that reply. However, is he aware that there is a young doctor in Northallerton, North Yorkshire, whose PCT has denied her a vital operation for a genetic pancreatic condition? If she does not have this operation, she will remain in excruciating pain all the time, she will not be able to work, and there will be a risk of cancer.

Earl Howe: My Lords, I hasten to reassure the noble Baroness that I have every sympathy with the individual in question, and I was aware of this particular case. The chief executive of the NHS will shortly be writing to her clinical tutor to suggest a possible way forward. However, I should put on record my view that the commissioner is acting reasonably in insisting that its decision on exceptionality should depend solely on the clinical need of the patient, and not on any broader social factors. If there is now good clinical evidence to support the use of this particular treatment, commissioners should be considering whether to make it available to all patients with similar clinical needs, and not just to a few individuals.

Lord Ribeiro: Is my noble friend aware that the pancreatic unit at Leicester is not able to do any islet cell transplantation operations because the PCT refuses to fund them? The excuses used to justify not funding these operations are that these may be “procedures of limited value” and “experimental surgery”. There are, in fact, four clinical units throughout the UK doing islet cell transplantation, with good records and good outcomes. I want to know whether the PCTs are not funding these operations in order to present a clean sheet to the incoming CCGs in April 2013, or whether there is another reason.

Earl Howe: My Lords, no, that is not the reason. My noble friend is quite right that this treatment has been around for a little while. However, it is not yet in mainstream practice. It is expensive, it is not routinely available in the NHS, and indeed NICE has published interventional procedure guidance which concludes that it,

“shows some short term efficacy, although most patients require insulin therapy in the long term”.

That does not seem to me to be a resounding endorsement of this treatment.

Lord Winston: My Lords, will the Minister be kind enough to help us by defining what is meant by exceptional clinical needs?

Earl Howe: There is no clear-cut answer to that question. A patient might be suffering unusually severe symptoms from a given condition, or they might suffer

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from some comorbidity, with the result that in the absence of treatment his or her quality of life would be unusually severely affected. The underlying principle should be that the patient has some exceptional characteristic which would justify more favourable treatment being given to them than to the average patient with that condition.

Baroness O'Loan: Given the vulnerability of the patients, the exceptional nature of the illness in such cases, and the consequential problems in terms of access and capacity to appeal, will the Minister tell the House what arrangements exist to scrutinise the fairness and consistency of decisions by PCTs and by their exceptional cases review processes?

Earl Howe: My Lords, under the NHS Constitution, all patients have the right to an individual review of a decision not to fund a particular treatment if they and their doctor believe that it would be appropriate. They also have the right to an explanation of the basis of the decision. The commissioner must in turn have a process to enable such individual funding requests to be considered, so the watchwords here are transparency and publishing an explanation.

Baroness Gardner of Parkes: Does the Minister agree that there are other decision-making bodies? I refer in particular to the UK National Screening Committee. Is he aware that, probably correctly, it makes its decisions only on research results? Why does it claim that it does not have the money to spend on research into Streptococcus B infections, when international research shows a clear choice for screening as opposed to risk assessment? That change that has been made in other countries has resulted in reductions of strep B infections in children of 80% in the USA, 60% in Spain, 82% in Australia and 71% in France. The screening of pregnant mothers could prevent that very serious condition, which can be fatal, being passed to a small number of babies.

Earl Howe: My Lords, the UK National Screening Committee advises Ministers and the National Health Service in all four UK countries on all aspects of screening policy, including for group B Streptococcus carriage in pregnancy. The committee is currently reviewing the evidence for screening for that condition in pregnancy against its criteria. It will take into account the international evidence and a public consultation on the screening review will be opening shortly.

Lord Collins of Highbury: My Lords, the Minister said that this treatment is not routinely carried out. The doctor concerned, who works in the NHS, is aware that pancreatectomy is carried out in other PCTs. Can the noble Earl explain where it is being carried out so that we can understand what is routine and what is not?

Earl Howe: My Lords, I hope that my earlier answers gave a clear indication of the definition of exceptionality, which should demonstrate to the House that something that is exceptional is not routine. Our advice is that that treatment is not routinely available in the NHS. There is a handful of centres in England with doctors who are trained to carry out the operation, but although

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the technique has been in use since 1977, it is available only in a few centres worldwide, which does not suggest to me that other countries are ahead of us in this area.

Delegated Powers and Regulatory Reform Committee

Membership Motion

3.08 pm

Moved by The Chairman of Committees

That Lord Marks of Henley-on-Thames be appointed a member of the Select Committee in place of Lord Carlile of Berriew, resigned.

Lord Foulkes of Cumnock: Can the Chairman of Committees give us a clear assurance that the removal of the noble Lord, Lord Carlile, from this important committee is not connected in any way with his excellent article in the Telegraph describing Mr Clegg’s House of Lords reform proposals as third rate?

The Chairman of Committees (Lord Sewel): My Lords, I have to be a bit careful here. I am sure that the generous comments of the noble Lord, Lord Carlile, on Mr Clegg’s proposals were not at all a consideration in this effect.

Motion agreed.

Northern Ireland Act 1998 (Devolution of Policing and Justice Functions) Order 2012

Northern Ireland Act 1998 (Devolution of Policing and Justice Functions) Order 2012

Motion to Refer to Grand Committee

3.09 pm

Moved by Earl Attlee

That the draft order be referred to a Grand Committee.

Lord Cormack: I would like to point out to those who are concerned with the future of this place that we have on the Order Paper today a number of things, each one of which could be debated at length. However, because we are such a restrained, responsible House, we shall not be debating them at length, but an elected Chamber at odds with the other place might well choose to do so.

Earl Attlee: My Lords, this is a very simple Motion. It refers the instrument to a Grand Committee and that has been agreed by the usual channels.

Motion agreed.

Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2012

Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2012

Data Protection (Processing of Sensitive Personal Data) Order 2012

Data Protection (Processing of Sensitive Personal Data) Order 2012

2 July 2012 : Column 493

Public Bodies (Abolition of Her Majesty’s Inspectorate of Courts Administration and the Public Guardian Board) Order 2012

Public Bodies (Abolition of Crown Court Rule Committee and Magistrates’ Courts Rule Committee) Order 2012

Motions to Refer to Grand Committee

3.10 pm

Moved By Lord McNally

That the draft orders be referred to a Grand Committee.

Motions agreed.

Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2012

Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2012

Motion to Refer to Grand Committee

3.11 pm

Moved by Lord Wallace of Saltaire

That the draft regulations be referred to a Grand Committee.

Motion agreed.

Electoral Registration Data Schemes Order 2012

Motion to Approve

3.11 pm

Moved by Lord Wallace of Saltaire

That the draft order laid before the House on 9 May be approved.

Relevant documents: 2nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 25 June.

Motion agreed.

Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012

Motion to Approve

3.11 pm

Moved by Baroness Wilcox

That the draft order laid before the House on 15 May be approved.

Relevant documents: 2nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 25 June.

Motion agreed.

2 July 2012 : Column 494

Crime and Courts Bill [HL]

Committee (5th Day)

3.12 pm

Relevant documents: 2nd Report from the Delegated Powers Committee, 2nd Report from the Constitution Committee.

Amendment 135

Moved by Lord McNally

135: After Clause 19, insert the following new Clause—

“Transfer of immigration or nationality judicial review applications

(1) In section 31A of the Senior Courts Act 1981 (transfer from the High Court to the Upper Tribunal)—

(a) in subsection (2), for “, 3 and 4” substitute “and 3”,

(b) omit subsection (2A),

(c) in subsection (3), for “, 2 and 4” substitute “and 2”, and

(d) omit subsections (7) and (8).

(2) In consequence of the amendments made by subsection (1), section 53(1) of the Borders, Citizenship and Immigration Act 2009 is repealed.”

The Minister of State, Ministry of Justice (Lord McNally): My Lords, this amendment will remove restrictions contained in Section 31A of the Senior Courts Act 1981. It will enable applications for or permission to seek judicial review in immigration, asylum and nationality cases to be transferred from the High Court in England and Wales to the Upper Tribunal.

As noble Lords will be aware, this House has considered this issue before. In 2009, the House thought it appropriate to allow the High Court to transfer fresh claim judicial reviews to the Upper Tribunal. These are judicial reviews that relate to a refusal by the Home Secretary to treat further submissions as fresh asylum or human rights claims on the basis that they are not significantly different from the material previously considered. These cases have been heard in the Upper Tribunal since October 2011 and the process is working well. This amendment would potentially enable any class of immigration, asylum or nationality judicial review to be heard in the Upper Tribunal.

The further categories of cases that would be transferred to the Upper Tribunal would have to be set out in a direction, or directions, made by the Lord Chief Justice with the agreement of the Lord Chancellor under the provisions in the Constitutional Reform Act 2005. We envisage that the transfers will take place in a staged fashion to increase slowly the types of judicial review dealt with by the Upper Tribunal. The ability to transfer such cases would play an important role in improving access to justice. Immigration and asylum judicial review cases currently form a high proportion—around 70%—of the caseload in the administrative court. The total number of these cases has doubled in the past five years, with around 8,800 being received in 2011. Many of these cases are relatively straightforward. This volume of cases is unsustainable for the administrative court. It keeps High Court judges from other complex civil and criminal cases that they should be hearing. It has created a backlog and has added to waiting times for all public law cases heard by the administrative court.

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I recently met the president of the Queen’s Bench Division and the president of the Upper Tribunal immigration and asylum chamber to discuss the progress that has been made in the Upper Tribunal since it was created in 2010. I am persuaded that it now represents the most appropriate venue for the majority of judicial reviews of this type. As the avenue for appeals against a decision of the First-tier Tribunal, the Upper Tribunal deals with thousands of appeals each year. Since acquiring this jurisdiction it has received nearly 200 fresh claim judicial reviews, which have been dealt with more quickly. Fresh claim cases are on average dealt with in seven weeks, compared to an average of 11 weeks for the administrative court. This has not been at the expense of quality. The judges who sit in the Upper Tribunal have a high level of expertise, particularly in relation to in-country conditions and human rights implications, and are regularly joined by judges of the administrative court.

The Upper Tribunal’s expertise in the field of asylum and country guidance cases has been recognised by the higher courts in the UK and the European Court of Human Rights. It is able to make well informed decisions that will deliver justice in these types of judicial review cases, in the same way as the High Court has done in the past. I beg to move.

Lord Avebury: My Lords, this amendment would allow judicial reviews of immigration and asylum cases and nationality matters to be transferred from the High Court, where judicial review is currently heard, to the Upper Tribunal, as my noble friend has explained. To many of your Lordships, this must feel like Groundhog Day. Parliament made clear its views on whether JRs should be transferred from the High Court into the tribunals once in 2007, during debate on what is now the Tribunals, Courts and Enforcement Act 2007, and again in 2009, during debates on what is now Section 53 of the Borders, Citizenship and Immigration Act 2009. It has said no and has said so powerfully. The arguments against the Upper Tribunal being entrusted with this responsibility still hold good.

The 2007 Act established a new regime, bringing together several tribunal jurisdictions into one structure comprising the First-tier Tribunal and the Upper Tribunal, or UT for short. The Act allowed for the transfer of certain JR applications from the High Court to the UT but, as a result of amendments made during its passage, excluded immigration and nationality JRs from the cases that could be transferred. Parliament returned to this matter, as my noble friend has reminded us, in 2009 during debates on the then Borders, Citizenship and Immigration Bill and again rejected a proposal that would permit the wholesale transfer of immigration and nationality JRs.

The compromise reached was that a JR concerned with a decision on a fresh claim for asylum—that is, one made after an earlier claim and any appeals against its refusal had finally been rejected—was made transferable. Since 2009, the once separate Asylum and Immigration Tribunal has been transferred into the two-tier structure, with an immigration and asylum chamber in the First-tier Tribunal and in the UT. Meanwhile, on a case-by-case basis, the High Court has transferred a few JRs against local authorities

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concerning the age of separated children seeking asylum to the UT where they have ended up in the immigration and asylum chamber. However, age-dispute JRs can be transferred because they are not decisions about immigration or nationality and are therefore not affected by the 2007 Act. These cases start in the administrative court, but can be transferred to the UT on a case-by-case basis. There have been only four reported cases to date.

Fresh-claim JRs are transferred as a class. There are no reported cases yet and only one case that the tribunal was to hear. The UT has no experience of hearing JR cases so there is no way of assessing whether it is likely to cope well or badly with them. Meanwhile, although there is power to transfer fresh-claim judicial reviews from the Outer House of the Court of Session in Scotland to the UT, that power has never been exercised. I can do no better than cite the comments of the late Lord Kingsland on Report on the Tribunals, Courts and Enforcement Bill. He said,

“first, the Government have broken their promise to your Lordships’ House not to introduce primary legislation permitting the transfer of judicial review matters in asylum and immigration cases until we have sufficient evidence that the system for judicial transfers in other classes of case are working well. Secondly, the Opposition and the noble Lord, Lord Thomas of Gresford, would be extremely unhappy to permit such transfers unless we were satisfied that the transferred AIT single-tier regime to the Upper and Lower Tribunals did indeed have the effect of leading to much fairer and more timely decisions, thus reducing substantially the overall number of judicial review cases … Thirdly, as I have indicated, judicial review is a crucial component in the struggle to protect the individual. Many of these cases raise issues, at best, of the freedom of the individual and, at worst, of torture and death. It is vital that it remains open to someone in such cases to have the application heard by a High Court judge”.—[

Official Report

, 1/4/09; cols. 1126-27.]

There is no such evidence yet. Powers to transfer JRs into the UT are being sought when it has done only a handful of age assessment cases and has not built up any track record whatever in dealing with fresh-claim JRs. High Court judges have sat in the UT, but there are also judges in that chamber who were adjudicators and special adjudicators of the former Immigration Appellate Authority and its successors. They have never heard cases outside the immigration and asylum tribunal jurisdiction, but the amendment would allow them to deal with JRs on which they have zero experience.

Speaking for the then Government in 2007, the noble Baroness, Lady Ashton of Upholland, accepted that JRs in immigration cases were particularly sensitive. The point was underlined by a forceful observation from the noble and learned Baroness, Lady Butler-Sloss, in Grand Committee in 2006. She said:

“I support my noble and learned friend Lord Lloyd of Berwick in relation to the requirement to have someone of the level of a High Court judge to hear a judicial review in the tribunal. It would be invidious for there not to be a judge of that rank dealing with it. I support my noble and learned friend very strongly”.—[Official Report, 13/12/06; col. GC 68.]

Then there was the noble and learned Lord, Lord Lloyd of Berwick, who said at Second Reading of the Borders, Citizenship and Immigration Bill:

“If the effect ... is that the administrative court would be bound to transfer judicial review applications in all immigration cases, I would be strongly opposed to it”.—[Official Report, 11/2/09; col. 1142.]

2 July 2012 : Column 497

The then Minister, the noble Lord, Lord West, winding up that debate, said that,

“the senior judiciary are very supportive of the clause”—[

Official Report

, 11/2/09; col. 1211.]

that is, the clause providing for the transfer—which he said was shown by the responses of the President of the Queen’s Bench Division, the Master of the Rolls and the Senior President of Tribunals to the consultation on immigration appeals. However, the Master of the Rolls had merely indicated that he supported the views of the President of the Queen’s Bench, who in turn stated that proposals for transfer of JRs in general were welcome, but emphasised that:

“Some of them are plainly suited to the Administrative Court and should remain there”.

The Senior President of the Tribunals agreed with him. The Court of Session judges did not welcome the proposal. They said that,

“any decision as to a more general transfer of judicial review jurisdiction in this area—


“should be made only once the Upper Tribunal has gained extensive experience of implementing its proposed remit”.

No such extensive experience has been gained. Others, including the Immigration Law Practitioners Association, the Constitutional and Administrative Law Bar Association, the Glasgow Immigration Practitioners’ Group, the Law Society, the Refugee Legal Centre, the Refugee Council and individual lawyers, have expressed views similar to those of the judges of the Court of Session.

Lord Woolf: As the noble Lord has made clear, there is a considerable history here. When he is referring to the bodies that have indicated their objections, could he help the House by indicating whether the objections are indeed to the present amendment or to an earlier one?

Lord Avebury: As I understand it, my Lords, these representations and views have been expressed by the bodies that I have mentioned in response to this particular legislation. I am relying particularly on the excellent briefing that we have received from ILPA, which quotes all those authorities.

The amendment would allow for the transfer of any immigration or nationality JR by decision of the High Court, the Northern Ireland High Court or the Court of Session in the individual case, and empower the Lord Chief Justice, with the agreement of the Lord Chancellor, to direct that all immigration and nationality JRs or any specific class of these JRs must be transferred. The temptation would be to exercise the powers in an effort to reduce the load on the higher courts, but the right solution is to improve the quality of decision-making so that there are fewer litigants seeking JRs. The number is likely to fall in any case because of the LASPO Act provision that legal aid is no longer available for ordinary immigration cases.

ILPA has set out constructive suggestions for reducing the number of JR applications and indeed the burden on the appeals system as a whole. In 2009, for instance, it requested that UKBA disclose information on the

2 July 2012 : Column 498

number of immigration and asylum JRs that are conceded by the agency or in which the agency has agreed to make a fresh decision without the need for the process to be seen all the way through. The agency told ILPA that it was too expensive to retrieve this information, but it gave some data on the very large number of immigration JRs that are withdrawn: 1,185 cases in 2006 and 1,532 in 2007. We do not have more recent figures but I hope that my noble friend will tell us what the latest figure is for 2011, to compare with a total of some 9,000 given by my noble friend Lord McNally in his letter to the chair of the JCHR on 12 June.

As was recognised in 2006-07, immigration and asylum JRs are particularly sensitive. It remains the case that the tribunal has not demonstrated the same ability to deal with UKBA’s conduct as a litigant as has the High Court. The agency’s failures to respond in a timely manner to directions from the tribunal to disclose relevant matters or adequately to plead its case are problems that continue to beset all too many cases.

I will not try the House’s patience by going through all ILPA’s suggestions, but there is one that I think will particularly appeal to your Lordships. The Home Office could address the many hundreds of Zimbabwean cases that have contributed substantially to the workload since 2005 by reviewing and, where appropriate, conceding. Many of these cases will include findings of fact justifying a grant of refugee status in the light of the country guidance determination in RN (Zimbabwe), which has just been held not to have been overturned in JG and CM (Zimbabwe), the text of which is awaited.

In conclusion, the reasons given in your Lordships’ debates in 2007 and 2009 for not transferring more JR cases to the UT—that immigration and asylum JRs were the most sensitive cases, and the new chambers’ handling of JRs required testing first—still hold good. The number of cases going to the High Court and Court of Appeal could be reduced by other means, and restricting access to the higher courts would merely encourage or allow for poor decision-making. Decisions of the Court of Appeal on appeals from the UT show that it continues to be the higher courts, rather than the UT, that call for the UK Border Agency to account for its conduct as a litigant.

3.30 pm

Lord Woolf: My Lords, I will say a few words in support of this amendment. In order to understand its importance, one has to take into account the matters that were so clearly outlined by the noble Lord, Lord Avebury, just before I rose to my feet. The history that he has described indicates that this is not an amendment that should be lightly accepted. Time has moved on since some of the matters to which he referred arose, and the experience so far of the quality of the tribunals, particularly the Upper Tribunal, has been particularly good.

The other important matter is the resource of High Court judges. The demands for the services of High Court judges are extensive. At present, there is the grave danger that judicial review will not be able to achieve one of its most necessary characteristics, which

2 July 2012 : Column 499

is to deal expeditiously with the urgent applications that come before it. This is critical because sometimes the very fact of the application for judicial review can and does delay matters of great importance—I hope am not overstepping the mark in saying matters, often, of national importance. The information that is available as to the pressure on High Court judges makes clear that they are overstrained. That is one side of the picture.

The other side of the picture is that the Upper Tribunal has huge expertise, which except in a very small number of cases is not available to High Court judges. Therefore, it is not apparent that they have the ability to deal with these cases as expeditiously and effectively as the tribunal. The danger in not accepting this amendment is that the desire for excellence could be the enemy of the good, and I urge the Committee to be sympathetic to it. It is my belief that justice can and should be ensured, as it always is in this country when these matters are dealt with by the tribunal as proposed here.I know that those who are responsible for arranging the proper dispatch of business in the different parts of the High Court attach the greatest importance to this amendment. They see it as a lifeline.

Lord Beecham: My Lords, I was not a Member of your Lordships’ House at the times when, as the noble Lord, Lord Avebury, reminded the Committee, similar matters were debated at some length. Therefore, I come to this amendment with an open mind, which creates something of a precedent in my case. I listened very carefully to the Minister’s explanation and justification of the amendment and, of course, to the critique of it from the noble Lord, Lord Avebury. Although many of us have received extensive briefings about various aspects of this Bill and other legislation, I have not received any particular briefing from any of the organisations referred to by the noble Lord, Lord Avebury, on this point.

I initially leant towards his line of argument, but am comforted in the first instance by the fact that the Lord Chief Justice’s role will be critical in initiating any further transfers, as well as by the wisdom and experience of the noble and learned Lord, Lord Woolf, of course, who commends the amendment to the Committee. Perhaps when he replies the Minister will indicate whether it is the Government’s intention to review progress at some stage, perhaps in conjunction with the Lord Chief Justice, to see whether the fears that the noble Lord, Lord Avebury, enunciated are grounded in relativity, and if they are to create an opportunity for a change in policy, either slowing down the additional transfers or possibly rethinking the policy.

As we have been reminded on previous occasions, it is the Government’s policy to conduct a post-legislative review within three to five years. Perhaps an indication that that will also be the case in relation to this matter might satisfy—for the time being, at any rate—some of the doubts that have been raised. If it is necessary to step back in the light of experience, that could then happen. For the moment, I am disposed to accept the Government’s amendment and rely very heavily on the support given to it by the noble and learned Lord, Lord Woolf.

2 July 2012 : Column 500

Lord McNally: My Lords, I am very grateful to the noble Lord, Lord Beecham, for that indication of the Opposition’s support for this amendment. I gladly give him, and the noble Lord, Lord Avebury, an assurance that what we are doing will be kept under review in close consultation with the judiciary.

It is true that this matter was discussed in 2009, as the noble Lord, Lord Avebury, said, but we have now had three years’ experience of the workings of the Upper Tribunal in these areas and we have also had representations from the senior judiciary about how the present system is clogging up the High Court and bringing some of the pressures to which the noble and learned Lord, Lord Woolf, referred.

I have not taken lightly the decision to bring this back to the House. In a meeting, the president of the Queen’s Bench Division and the president of the Upper Tribunal convinced me of two things: first, that we would be taking some pressure off the High Court and High Court judges by doing this; and, secondly, that by moving these cases to the Upper Tribunal we would in no way diminish the quality of justice available. On the contrary, as the noble and learned Lord, Lord Woolf, indicated, a great deal of the expertise for judging these cases is in the Upper Tribunal.

I take the point that the noble Lord, Lord Avebury, made about the UK Border Agency’s withdrawals. There are varied reasons for cases being withdrawn but, coupled with other government reforms, we are getting a better system for dealing with these cases from the UKBA. The senior judiciary is broadly in favour of the amendment as a sensible solution to the backlogs in the High Court and an opportunity to transfer cases to the most appropriate part of the justice system. There has been strong judicial involvement in the discussions preparing for this amendment, and the judiciary is keen to ensure that it is successfully introduced. As the noble Lord, Lord Beecham, said, the Lord Chief Justice will be closely involved with the Lord Chancellor in gauging the pace of movement on this so that we get the twin benefits of faster, efficient, high-quality justice in immigration cases and some elbow room in the High Court to deal with the important cases that the noble and learned Lord, Lord Woolf, mentioned.

I hope the noble Lord, Lord Avebury, will be content to take those assurances and to accept that this decision has been taken on the basis of the experience of the past three years, which we believe is entirely favourable to the move that we are making. That is coupled with the assurance that we will keep the matter under review and will be in close contact and consultation with the senior judiciary to ensure that the move is completely in keeping with the access to good justice that is the aim of this amendment.

Lord Avebury: My Lords, can my noble friend answer the question I put to him about how many cases were withdrawn by the UKBA—to correspond with the figures I gave for 2006 and 2007? If a very large number are being withdrawn, and thus the UKBA is conceding that the original decision was wrong, surely that proves that there are other methods of reducing the pressure on the High Court rather than transferring all these cases to the tribunal.

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The Earl of Sandwich: My Lords, I am not sure that the Minister answered the point made by the noble Lord, Lord Avebury, about the relative inexperience of the Upper Tribunal in immigration. He quotes the wise and the good, and we have heard from the noble and learned Lord, Lord Woolf, but surely we are not making a decision on the basis of advice only but on the actuality of the court over the period.

Lord McNally: The point was made that the Upper Tribunal over the past three years has demonstrated very clearly that it has both the experience and the expertise to deal with these matters. The Upper Tribunal’s expertise in reducing backlogs in the Administrative Court has been demonstrated. I do not have the most up-to-date figures on UKBA withdrawals, but in my closing remarks I accepted that one issue was the UKBA’s tendency in the past to withdraw objections. Reforms that are being taken forward by my right honourable friend the Home Secretary aim to deal with some of those criticisms of the UKBA.

However, that does not take away the central thrust of this proposal that since 2009 the Upper Tribunal has shown itself to be working well, and we are not rushing our fences in this case. Both the Lord Chancellor and the Lord Chief Justice will be closely involved in gauging the movement of cases to the Upper Tribunal, but no one has seriously doubted its competence or expertise to deal with these matters. On the contrary, it has shown itself to be remarkably efficient at cutting time for dealing with cases, which must be in the interests of justice.

Amendment 135 agreed.

Schedule 13 : Deployment of the judiciary

Amendment 136

Moved by Lord McNally

136: Schedule 13, page 202, line 33, after “Wales)” insert “or the President of Employment Tribunals (Scotland)”

Amendment 136 agreed.

3.45 pm

Amendment 137

Moved by Lord McNally

137: Schedule 13, page 203, line 39, leave out “1” and insert “2”

Lord McNally: My Lords, these amendments all relate to the provisions on the deployment of the judiciary. Of particular note is Amendment 140, which introduces an emergency procedure regarding the appointment of deputy judges of the High Court when there is an urgent need to do so. The Bill introduces a Judicial Appointments Commission process for appointing deputy High Court judges and authorising circuit judges and recorders to sit in the High Court. This is an important reform to increase transparency regarding these appointments.

Amendment 140 would deal with situations where there is an urgent and unforeseen demand for a deputy High Court judge and it is not practicable to draw on

2 July 2012 : Column 502

any judges of the High Court or any of those who have been selected previously by the Judicial Appointments Commission, or to deploy any other judge who is authorised to sit in the High Court or Crown Court in the time available.

The amendment inserts new Section 94AA into the Constitutional Reform Act 2005. The purpose of this new section is to specify clearly circumstances in which the normal Judicial Appointments Commission selection exercise may not be applied in the appointment of a deputy judge of the High Court for a definite period. This may be needed in exceptional circumstances, such as a number of judges being unwell or suffering some other unexpected misfortune, meaning that a particular area of expertise is required at short notice. The amendment specifies what criteria must be applied if the Judicial Appointments Commission is not to select deputy judges of the High Court. It also clearly limits the duration of the appointment to the disposal of the particular business that gave rise to the use of the power.

Amendment 145 inserts a new Part 3A into Schedule 13 of the Bill. The new part deals with the deployment of judges to the Court of Protection. Our new deployment policy has been applied in this jurisdiction and all judicial officeholders are now able to be nominated to sit in the Court of Protection, including deputies and temporary appointees. Of course, in this and all jurisdictions, judges may be deployed only if the Lord Chief Justice determines that the judge possesses the necessary expertise and experience and deems in all other circumstances that it is appropriate for that particular judge to be deployed to that specific jurisdiction. In this jurisdiction, there has been a particular difficulty in ensuring that the court is fully resourced with judges that have the necessary skills and ability to hear these complex and often difficult matters. The amendment enables the Lord Chief Justice to provide appropriate judicial resources from a broader pool of candidates; it also widens the group of judges who can be appointed to act as the senior judge of the Court of Protection, handling certain administrative functions to that court.

The other amendments in this group on judicial deployment are either consequential or drafting amendments to ensure that we have made all the necessary changes and adjustments to Schedule 13 of the Bill. I will not detain the Committee further with this group of amendments, but I can provide further details of these amendments if needed. I beg to move.

Baroness Butler-Sloss: Perhaps I could ask the Minister what may be a rather stupid question. Unfortunately, I do not have the Mental Capacity Act in front of me, but I assume that the President of the Family Division and the judges of the Family Division and the Chancery Division are still on the list of those who will be trying these cases, as they are usually the judges who do it.

Lord McNally: I tread on very thin ice, but I think that I can assure the noble and learned Baroness that that is the case. If not, I shall make sure as soon as possible that the Committee knows that I am wrong.

Baroness Hamwee: I want to ask my noble friend a question about Amendment 140. He described the circumstances and need for flexibility in the ability to

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appoint temporary High Court deputy judges. I would like to ask about the business for which they would be needed, in proposed new Section 94AA(2)(a), which refers to both an “urgent need” and the “disposal of particular business”. He mentioned the need for special expertise, but has he any further examples of what the “particular business” might be? I take it that we are not being asked to agree to temporary appointments to deal with urgent business per se. It is the term “particular business” that interests me. I could have pictured this clause better if it did not refer to “particular business” but to “business” in general. I am sorry that I did not give the Minister notice of the question. He may wish to come back to it at a later point.

Lord McNally: I, too, am rather sad that my noble friend did not give me notice of the question. I am pleased that we are bringing in a role for the Judicial Appointments Commission in the appointment of deputy High Court judges. To put it bluntly, there was a suspicion in some areas that the appointment of deputy High Court judges was the last surviving remnant of the “tap on the shoulder” system of appointments. Therefore the proposals to bring the appointments commission into the process are important.

However—I say this in the presence of the noble and learned Lord, Lord Woolf, with all his vast experience—we were determined not to put the Lord Chief Justice of the day into a straitjacket. He has to be responsible on a day-to-day basis for deploying the judiciary and, if there is a need to appoint a deputy in an emergency, we should have the ability to do so. Hence, in introducing the provision, there are many references to exceptional circumstances and a definite period so that this emergency procedure would not lead, again, to a way of appointing deputy High Court judges by a tap on the shoulder. It leaves the Lord Chief Justice of the day with the wriggle room to deploy efficiently but makes sure that the main appointment of deputies now comes within the ambit of the Judicial Appointments Commission.

As for specific examples, the best I can do is to write to my noble friend giving her some examples, which I hope will reassure her. I shall, of course, put a copy of the letter in the Library of the House for the benefit of the Committee.

Baroness Turner of Camden: Fairly recently I asked questions in the House about employment tribunals and I was told by the Government that an investigation into them was currently proceeding and that we would be told the results in due course. Does the change of title listed in Amendment 146 from “chairmen of employment tribunals” to “Employment Judges” form part of that general investigation?

Lord McNally: Yes, my Lords, it is part of the general process of reform at both the tribunal level and in other parts of the judiciary. So there will be employment judges from now on.

Lord Thomas of Gresford: Perhaps I may help my noble friend by illustrating the kind of particular business there could be. In the old days it was not so much a tap on the shoulder as a ring-round by the

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Lord Chancellor’s Department to find someone who could go and do particular cases on very short notice. I recall being asked to go to Leeds with the inducement that I could stay in the judges’ lodgings—not much of an inducement, I may say—to try three large medical negligence cases. They said, “Don’t worry, they’ll all settle”. In fact, they all stood up. That is the sort of instance when counsel on both sides are all ready to go ahead on a fixed date but there is no High Court judge to take it. Everybody assumes that the cases will settle but they do not.

Lord McNally: Not for the first time when I find myself out on the thin ice, my noble friend supplies a plank for me to walk back to dry land. I thank him for that intervention.

Lord Beecham: I am glad that the noble Lord is not emulating Rasputin in terms of his trips across the ice.

The Opposition do not take issue with the amendments but it is interesting that in a move to simplify the system we have a complex series of amendments. They add several pages to Schedule 13. By sheer chance today, a Mr Patrick O’Brien, a research associate of the Constitution Unit, has written a blog—I suppose that is what it is—about the issue of judicial appointments under the Bill. He makes the point:

“The new system in its entirety will, if anything, be even more complex than the present arrangements. It will be a hydra with three heads—the Lord Chancellor, Lord Chief Justice and the Senior President of Tribunals (and indeed five heads if you include the formal roles of the Prime Minister and the Queen), all of whom will have roles in approving appointments of various types—and at least five variants of appointment commissions/panels in addition to the JAC. There is the potential for further variations on these commissions/panels though the use of regulations. As things stand, the use of regulations in the Bill adds complexity and uncertainty to the CRA rather than removing it”.

Can the noble Lord give an indication of when, if at all, regulations will be introduced and what they might cover? Mr O’Brien goes on to say: “The CRA”—Constitutional Reform Act—

“is not just addressed to civil servants”—

or Members of your Lordships’ House or indeed the other place. He continues:

“It has constitutional significance and”,

should be,

“comprehensible to the general public”.

The noble Earl, Lord Attlee, referred to improvements in satnav technology when he was answering a Question on transport earlier. The implication of Mr O’Brien’s article is that we need the equivalent of satnav to navigate through this complex field of appointments. Having said that, we do not object in principle but it would be helpful if a guide were available to the public as well as to the practitioners so that they can see how the new system is supposed to work. Again, as with the previous amendment, I assume that the Government will be monitoring developments and will ensure that problems are dealt with in due course.

Lord McNally: My Lords, I am extremely grateful to the noble Lord, Lord Beecham, for his indication of support and for some sensible suggestions that I hope will assist the Committee. We will be publishing draft regulations before Report. The idea of a simplified guide on how these will impact is very sensible and I

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will take that back to my right honourable friend the Lord Chancellor. Amending existing legislation can be extremely complex when fitting in new proposals to existing legislation.

The noble and learned Lord, Lord Falconer—I was going to say my noble friend—along with the noble and learned Lord, Lord Woolf, showed a certain pride of authorship in the new disposition of our legal system after the reforms of the earlier part of this century. What we are trying to do, in our different ways, is build on reforms that have given us an effective system. These include promoting greater diversity in our judiciary. As we were discussing the other day, we are also conscious of the important nexus of the system, with the President of the Supreme Court, the Lord Chief Justice and the Lord Chancellor.

4 pm

We want the benefits of the Legal Appointments Commission and transparency in appointing our judiciary but we do not want to impinge on, or to put into a straitjacket, the ability of the Lord Chief Justice of the day to deploy judiciary as and when needed. That is why I was grateful to my noble friend Lord Thomas of Gresford for giving such a good example. What we are trying to do, particularly in Amendment 140, is to give the flexibility that allows the phone call to get the judge to the right place so that a whole range of people—engaged barristers, witnesses, et cetera—are not all put to discomfort because a judge is not available.

I will take back and look at some of the points made in this debate; not least, once we have these reforms in place, how we can make them more cohesively understood by the public so that they have confidence in the transparency of appointment, the method of deploying the senior judiciary and the interrelation between the two. I will also look at point the noble Lord, Lord Beecham, made—that the regulations that are such a key part of our proposals should be made available to this House before Report. With that, I hope that the Committee has the confidence to accept these amendments.

Amendment 137 agreed.

Amendments 138 to 146

Moved by Lord McNally

138: Schedule 13, page 203, line 41, leave out “Chancellor” and insert “Chief Justice”

139: Schedule 13, page 204, line 4, leave out “1 of”” and insert “2 of”, and

(b) paragraph 38 of Schedule 12 has effect—

(i) as if a reference to the office of deputy judge of the High Court were inserted at the beginning of the list in sub-paragraph (4) of that paragraph, and

(ii) as if “second” were substituted for “first” in sub-paragraph (5) of that paragraph”

140: Schedule 13, page 204, line 4, at end insert—

“(3) After section 94A of the 2005 Act (appointments not subject to section 85: courts) insert—

“94AA Appointments not subject to section 85: High Court deputy judge

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(1) Where this section applies to an appointment, section 85 does not apply.

(2) This section applies to the appointment of a person as a deputy judge of the High Court if it appears to the Lord Chief Justice, after consulting the Lord Chancellor, that—

(a) there is an urgent need to take steps in order to facilitate the disposal of particular business in the High Court or Crown Court,

(b) it is expedient as a temporary measure to make the appointment in order to facilitate the disposal of the business, and

(c) there are no other reasonable steps that it is practicable to take within the time available in order to facilitate the disposal of the business.

(3) An appointment to which this section applies is to be made—

(a) so as not to extend beyond the day on which the particular business concerned is concluded, or

(b) so as not to extend beyond the later of—

(i) the day on which the business is concluded, or

(ii) the day expected when the appointment is made to be the day on which the business is concluded.”

(4) In section 85(2A)(d) and (4) of the 2005 Act after “94A” insert “, 94AA”.”

141: Schedule 13, page 204, line 41, leave out “chairmen of employment tribunals” and insert “Employment Judges”

142: Schedule 13, page 204, line 42, after “Wales” insert “or for Scotland”

143: Schedule 13, page 205, line 36, leave out “chairmen of employment tribunals” and insert “Employment Judges”

144: Schedule 13, page 205, line 37, after “Wales” insert “or for Scotland”

145: Schedule 13, page 205, line 41, at end insert—

“Part 3ADeployment of judges to the Court of Protection

5A (1) Section 46 of the Mental Capacity Act 2005 (judges of the Court of Protection) is amended as follows.

(2) In subsection (2) (persons who may be nominated as court’s judges) omit the “or” at the end of paragraph (d) and, after paragraph (e), insert “,

(f) a District Judge (Magistrates’ Courts),

(g) a judge of the First-tier Tribunal, or of the Upper Tribunal, by virtue of appointment under paragraph 1(1) of Schedule 2 or 3 to the Tribunals, Courts and Enforcement Act 2007,

(h) a transferred-in judge of the First-tier Tribunal or of the Upper Tribunal (see section 31(2) of that Act),

(i) a deputy judge of the Upper Tribunal (whether under paragraph 7 of Schedule 3 to, or section 31(2) of, that Act),

(j) the Chamber President, or Deputy Chamber President, of a chamber of the First-tier Tribunal or of a chamber of the Upper Tribunal,

(k) the Judge Advocate General,

(l) a Recorder,

(m) the holder of an office listed in the first column of the table in section 89(3C) of the Senior Courts Act 1981 (senior High Court Masters etc),

(n) a holder of an office listed in column 1 of Part 2 of Schedule 2 to that Act (High Court Masters etc),

(o) a deputy district judge appointed under section 102 of that Act or under section 8 of the County Courts Act 1984,

(p) a member of a panel of Employment Judges established for England and Wales or for Scotland,

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(q) a person appointed under section 30(1)(a) or (b) of the Courts-Martial (Appeals) Act 1951 (assistants to the Judge Advocate General),

(r) a deputy judge of the High Court,

(s) the Senior President of Tribunals,

(t) an ordinary judge of the Court of Appeal (including the vice-president, if any, of either division of that court),

(u) the President of the Queen’s Bench Division,

(v) the Master of the Rolls, or

(w) the Lord Chief Justice.”

(3) In subsection (2)(b) for “Vice-Chancellor” substitute “Chancellor of the High Court”.

(4) In subsection (4) (a judge nominated under subsection (2)(d) or (e) must be appointed senior judge of the court) for “or (e)” substitute “to (q)”.

(5) In section 4(5)(f) of the Human Rights Act 1998 (things done by certain judges in Court of Protection) for “Vice-Chancellor” substitute “Chancellor of the High Court”.”

146: Schedule 13, page 208, line 17, at end insert—

“Part 7Amendments following renaming of chairmen of employment tribunals

12 (1) In the following provisions for “chairmen”, or for “chairmen of employment tribunals”, substitute “Employment Judges”—

Constitutional Reform Act 2005: section 3(7B)(d) and (e),

Courts Act 1971: Part 1A of Schedule 2,

Courts and Legal Services Act 1990: Schedule 11,

Employment Tribunals Act 1996: sections 3A, 5A, 5B(4), 5D(2)(e) and 7B(6),

Judicial Pensions Act 1981: section 12(1)(c),

Judicial Pensions and Retirement Act 1993: section 26(12A)(i), and

Tribunals, Courts and Enforcement Act 2007: sections 4(1)(e) and (3)(d) and 47(5)(c)(iii), paragraph 12(1)(c) of Schedule 1 and paragraph 7(1)(a) of Schedule 2.

(2) In the following provisions for “chairman of employment tribunals” substitute “Employment Judge”—

Constitutional Reform Act 2005: Part 3 of Schedule 14, in both places,

Tribunals, Courts and Enforcement Act 2007: paragraph 6(1)(e) and (4)(b) of Schedule 7, and

Judicial Pensions and Retirement Act 1993: Schedules 1 and 5.

(3) In sections 10(4) and 30(2B)(b) of the Employment Tribunals Act 1996 for “Chairman” substitute “Employment Judge”.

(4) In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975 for “or member of a panel of persons appointed to act as chairmen or other members of employment tribunals” substitute “Employment Judge, or member of a panel of members of employment tribunals that is not a panel of Employment Judges”.

(5) In paragraph 5(2)(g) and (5)(vii) of Schedule 7 to the Judicial Pensions and Retirement Act 1993 before “chairman” insert “Employment Judge, before 3 November 2008 called”.”

Amendments 138 to 146 agreed.

House resumed.

EU Council


4.03 pm

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, this may be a convenient moment to repeat a Statement made by the Prime Minister about the European Council. The Statement is as follows.

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“I am sure that the whole House will be deeply saddened by the death of three British servicemen in Afghanistan yesterday. These brave soldiers were demonstrating great courage to prevent Afghanistan once again becoming a haven for international terrorists and helping to keep us safe here in the United Kingdom. The suspected perpetrator is in custody and we will do everything in our power, with the Afghan national security forces, to ensure that justice is done. This tragic incident again demonstrates the very real risks that our soldiers face every day and we will learn all the lessons that arise from it. I know that everyone in this House will want to send their support to our brave troops and their families at this difficult time.

Turning to the European Council, Britain had three objectives at last week's European Council. The first was for eurozone members to take the urgent action needed to deal with the immediate crisis. The second was to secure a comprehensive growth package firmly focused on Britain's priorities and the third was to send a clear message to the rest of Europe about what Britain expects from the budget negotiations to come.

Under the previous Government, we could have been liable for financial support for these measures, as members of the EU bailout fund. But this Government have repatriated that power, so the British taxpayer is not involved.

On longer-term issues, eurozone members agreed important steps towards closer integration following a discussion of a report by the president of the European Council and others. It is vital for Britain—and for the strength and prosperity of the whole European Union—that they do this in the right way. I secured agreement that as this work goes ahead the “unity and integrity of the single market” will be fully respected. On the specific proposal of a banking union, I ensured that Britain will not be part of any common deposit guarantees or under the jurisdiction of any single European financial supervisor. I am very clear that British taxpayers will not be guaranteeing any eurozone banks and I am equally clear that, while we need proper supervision of our banks, British banks will be supervised by the Bank of England, not the ECB.

The original draft of the growth compact included a whole section on economic and monetary union which implied that a banking union might apply to all 27 countries. A number of countries worked to ensure that that whole section was removed.

We want a budget that is focused on growth not a focus on growth in the budget. EU members as a whole are €3.5 trillion more in debt now than when the last budget was negotiated and we have to face up to that tough reality. I made it clear that without the British rebate we would have the largest net contribution in the EU as a share of our national income. Without the rebate, it would be double that of France and almost one and a half times bigger than that of Germany. So the British rebate is not up for renegotiation. It is fully justified.

On foreign policy, the Council welcomed the EU oil embargo against Iran which came into force yesterday. On Syria, we called for united action by the UN

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Security Council to add more robust and effective pressure on Assad’s regime, including the adoption of comprehensive sanctions.

Europe is changing rapidly and fundamentally, and this presents real challenges for all countries. Those inside the eurozone have to face fundamental choices about whether to limit their national democracy and provide financial support to the weaker members, and like others outside the eurozone, in Britain we also face big choices too.

As Europe changes to meet the challenges of the eurozone, so our relationship with Europe will change too. There are those who argue for an in-out referendum now. I do not agree with that because I do not believe that leaving the EU would be best for Britain. But nor do I believe that voting to preserve the exact status quo would be right either. As I wrote yesterday, I do not believe that the status quo is acceptable. But just as I believe it would be wrong to have an immediate in-out referendum, so it would also be wrong to rule out any type of referendum for the future.

The right path for Britain is this. First, we must recognise that in the short term the priority for Europe is to deal with the instability and chaos. Secondly, over time we must take the opportunities for Britain to shape its relationship with Europe in ways that advance our national interest in free trade, open markets and co-operation. That should mean, as I argued yesterday, less Europe not more Europe: less cost, less bureaucracy, less meddling in issues that belong to nation states.

Thirdly, all party leaders will have to address this question. But it follows from my argument that far from ruling out a referendum for the future, as a fresh deal in Europe becomes clear, we should consider how best to get the fresh consent of the British people.

Finally, as I have said, as the eurozone moves to a banking union, we must ensure that Britain can take responsibility for sorting out its own banking sector. On the unfolding banking scandal here in the UK, we need to take action right across the board, introducing the toughest and most transparent rules on pay and bonuses of any major financial centre in the world, increasing the taxes banks must pay, ensuring tough civil and criminal penalties for those who break the law, and above all, clearing up the regulatory failure left by the previous Labour Government.

The British people want to see two things. They want to see that bankers who act improperly are punished and they want to know that we will learn the broader lessons of what happened in this particular scandal. On the first, the Serious Fraud Office is looking at whether there are any criminal prosecutions that can be brought, and it is using the full force of the law in dealing with this. On the second, I want to establish a full parliamentary committee of inquiry involving both Houses and chaired by the chairman of the Commons Treasury Select Committee. This inquiry will take evidence under oath, have full access to papers, officials and Ministers, including Ministers and special advisers from the previous Government, and it will be given, by the Government, all the resources it needs to do its job properly. The Chancellor will be making a full Statement, but this is

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the right approach because it will be able to start immediately, it will be accountable to this House, and it will get to the truth quickly, so we can make sure this never happens again.

I commend this Statement to the House”.

4.11 pm

Baroness Royall of Blaisdon: My Lords, I thank the Leader of the House for repeating the Statement by the Prime Minister on the outcome of the European Council meeting.

On the tragic news from Afghanistan, all our thoughts are with the families and friends of the soldiers concerned. This news reminds us once again of the risks our troops face daily and of our duty to do everything we can to protect them.

The Prime Minister in the other place included in his Statement on Europe a statement on banking. Leaving aside the admirable vote of confidence in his Chancellor, who is following the Prime Minister's Statement with his own Statement on banking, we on these Benches believe that it is right that the Prime Minister has reconsidered the position that he set out last week on the need for a full inquiry. However, we are not convinced that the way forward on this issue is the Joint Committee that he is proposing. It does not suggest that the Government have grasped the scale of the problem. We know that politicians investigating bankers will not convince the people of this country; nor is it the way we can build the consensus that is needed for real change. After all, there have already been a number of Select Committee reports into the banking crisis.

The crisis surrounding the banks now demands an inquiry similar to the inquiry into press behaviour currently being carried out by Lord Justice Leveson. We appreciate that the Leveson inquiry has been uncomfortable for politicians on all sides, but that is exactly how it should be. We will continue to argue for a full and open inquiry, independent of bankers and politicians, and we will table an amendment to the Financial Services Bill to this effect in order to get a proper inquiry that will be trusted by the people. We do not believe that we will rebuild public trust by having politicians investigating bankers. Like the Leveson inquiry, an inquiry needs to be searching, to expose what has been happening and to get to the truth. Furthermore, as we on these Benches hope will be the case with the Leveson inquiry, it needs to bring forward remedies to stop the practices, whether in journalism or in banks, that the public and all Members of this House oppose. That is how eventually trust will be rebuilt.

I turn now to Europe and the European Council meeting. On Syria, let me associate these Benches with what the Statement said. There was an agreement reached at Geneva on Saturday, but in truth there was little progress. The divisions within the international community on this issue mean that too little is being done to bring the escalating violence to an end. In that context, can the noble Lord, the Leader of the House, update your Lordships’ House on the position of Russia regarding a future for Syria without President Assad?

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The European summit took place against a backdrop of the continuing crisis in the eurozone, a global recovery faltering, and a double-dip recession here in the UK. The central challenge is how we can have a Europe not of austerity and unemployment but of jobs and growth. On that central issue, the Government cannot be part of the solution because the Government are part of the problem. They have no answers and nothing to offer. On growth, the Prime Minister used an instructive phrase in his post-summit press conference. He said that,

“just as we had to tackle the euro crisis, so we have to tackle the growth crisis”.

He then added:

“Britain has been driving this debate”.

That really does suggest someone getting increasingly out of touch with reality because as the Prime Minister was speaking figures were coming in showing that the double-dip recession, created in Downing Street, was worse than we thought. The UK is one of only two countries in the G20 to be in a double-dip recession, with long-term youth unemployment having doubled during the past year. The summit agreed extra resources for the European Investment Bank for youth unemployment. Why do the Government appear to support action on this crucial issue in Europe while failing to act here at home? There can be no solution to the growth crisis unless we tackle the crisis of demand in the European economies and globally. Did the Prime Minister advocate any measures at the summit to bring this about?

On the banking regulator, what specific legal safeguards will the Government seek to secure between now and December’s final proposals to protect Britain’s interest in the single market? On the eurozone and bank recapitalisations, it is welcome that direct help can be provided to eurozone banks, but do the Government really believe that the funds that eurozone countries are making available are adequate? On the Patent Office, the Prime Minister says that the outcome is a sign of his success, but, as he argued for the office to be headquartered in London, how could the decision to base it in Paris be a diplomatic triumph?

I turn finally to the Prime Minister's position—or should I say positions?—on Europe. On Friday, the Prime Minister ruled out a referendum on Europe, saying:

“I completely understand why some people want an in/out referendum … I don’t think it’s the right thing to do”.

However, hours later, 100 Conservative Back-Benchers in the Commons and the former Defence Secretary called for an in/out referendum. Then, mysteriously, on Sunday, the Prime Minister hinted that he was ruling in a referendum. The Foreign Secretary then went on television and said:

“The Prime Minister is not changing our position”.

Three days, three positions. First, it was no; then it was yes; now it is maybe. Can this House have some clarity about the Government’s stance? First, has there been a change in the Government's position? Secondly, the Prime Minister spoke about a referendum being connected to the renegotiation of powers. Are the Government now saying that they might be in favour of withdrawal from the European Union if they do

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not get these powers? That would be a new position. Is it the Government’s position? Thirdly, can the Leader of the House explain the following? The Prime Minister said last October that,

“there is a danger that by raising the prospect of a referendum … we will miss the real opportunity to further our national interest”.—[

Official Report

, Commons, 24/10/11; col. 27.]

Why is the Prime Minister doing precisely that now?

Will the Leader of the House confirm that the Prime Minister’s raising this issue has nothing to do with the national interest? He is doing so not to sort out the crisis of growth here at home or across the EU, or to tackle the disgrace of youth unemployment, but in an effort to manage the divisions in the Conservative Party.

Five years ago, then in opposition, the Prime Minister said that his party should stop banging on about Europe, but now he is the man getting out the drum. The country is confused about this Government and Europe—a veto that never was, a referendum which may happen, but not now. This is a party, the party opposite, talking to itself and not to the country. Britain deserves better. It is time that the Government started doing better for the people of this country.

Lord Higgins: My Lords, could my noble friend make it clear whether we are having one Statement or two?

4.18 pm

Lord Strathclyde: My Lords, perhaps I may clarify to my noble friend that there will be two Statements this afternoon, the second of which will be repeated by my noble friend Lord Sassoon, as is laid out on the screens, and will come immediately after Back-Bench time on this Statement.

As ever, I thank the Leader of the Opposition for her remarks. She asked plenty of questions and I shall try to deal with them fully. She expressed dissatisfaction at the Prime Minister having said that there should be an inquiry into banking and the LIBOR problem, because it was the wrong sort of inquiry. She said that her party would put down an amendment to a Bill before this House. She expressed disappointment with what the Government were doing, which is a pity, because I would have thought that one place where there is a good deal of expertise was in Parliament. To have a Joint Committee of both Houses looking at this matter, with Members of our Economics Affairs Committee sitting with their colleagues in the House of Commons, should surely be enormously welcome. It should also be able to respond quickly. We hope that it will get to work straightaway, call witnesses over the next few months and report by Christmas so that recommendations can be included in the Vickers Bill in the New Year. That seems to be an appropriate way forward.

The noble Baroness asked for our thoughts on Syria. She correctly recognised what a difficult situation it is. The situation remains grave, with hundreds of people dying every week. However, the Foreign Secretary was engaged this weekend in intensive talks in Geneva on a transition plan which included the Foreign Ministers

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of Russia, China, and other countries. The result is one step forward, which is worth having. We agreed with Russia and China that there should be a transitional unity Government in Syria, which should be made up of people from the present Government, the opposition, and other groups on the basis of mutual consent. It would of course exclude President Assad. We must now try very hard to bring this about. We are putting a great deal of energy into doing so, but nobody is under any illusions of just how complex all of this going to be, given the situation that exists in Syria.

The noble Baroness, the Leader of the House—

Baroness Royall of Blaisdon: If only!

Lord Strathclyde: Sorry, the noble Baroness the Leader of the Opposition, the former Leader of the House, also talked about the Europe of jobs and growth. She said that the Prime Minister could not deliver this in the United Kingdom, and asked why he therefore thought he could deliver it in Europe. That is to completely misunderstand what this Government have been doing, and, of course, to misunderstand quite deliberately. We want to rebalance the economy, with private sector growth taking the place of government deficits. We want prosperity shared across all parts of the UK. We want to become a world leader in advanced manufacturing and knowledge-based industries and services, and to remain the world’s leading centre for financial services. We have done this by cutting corporation tax, ensuring access to finance, dealing with the red-tape challenge, and many other brave and sensible pieces of action which will take the Government forward, from where we were under Labour’s misrule towards long-term growth and prosperity based on real jobs.

The noble Baroness asked about the European Patent Office. She said that it was not going to be based in London. This has been discussed and debated for over 23 years. It is an area in which Britain excels. The Council has decided that the patent office should be based in three parts of the European Union: in London, Paris and Munich. The most significant part of it as far as we are concerned—pharmaceutical and life science industries—will be based here in London. It will bring a turnover of over £100 million-worth in legal services into the United Kingdom.

Much of what the noble Baroness asked about concerned the referendum. I have believed for a long time that the real muddle on European policy lies in the party opposite, and not in our party at all. We said that an in/out referendum is not the answer right now, and we stick to that. A referendum on a choice between the status quo and coming out completely when Europe is changing would be the wrong choice. It would be a bad time to make a decision. Europe is changing a great deal, probably more so currently than it has done for very many years. Indeed, it is entirely right for my right honourable friend the Prime Minister to look at how we want to change our relationship with Europe, and as the end point becomes clear, to consult the British people either in a general election or a referendum. I regard that as a very strong position. If the Labour Party disagrees with consulting the British people, they should say so.

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4.24 pm

Lord Dholakia: My Lords, first, I welcome the sentiment expressed by the Leader of the House and the Leader of the Opposition about the death of the three British soldiers in Afghanistan. Our prayers and thoughts will remain with their families and friends.

I have two questions for the Minister. On the compact for growth and jobs, which will release €125 million for immediate investment, the noble Lord was broad enough to explain the area that may benefit Britain. Could he be more specific about what the real benefit to Britain will be from that money? Secondly, it is proposed that a group of eurozone members might pursue various measures, such as a financial transaction tax, through enhanced co-operation among themselves. If they do, will the Government ensure that Britain’s rights under the single market are maintained?

Lord Strathclyde: My Lords, my noble friend’s last point is crucial. There was real concern at the European Council and suggestions from other countries that a European banking supervisory system would be precisely that—for all the banks in Europe, including those in the United Kingdom. My right honourable friend the Prime Minister and others said that that should not and could not be the case, and we ensured that the final terms of the agreement ensured that British banks would not be a part of that but would continue to be regulated by the Bank of England. Within the eurozone area, it is of course entirely appropriate that they look at ways to improve banking supervision, ensuring deposits and working more closely together. That, too, should be welcomed.

As for growth, we are all pointing in the same direction. We want deregulation. We want a clearer completion of the single market, particularly in digital and energy. That will have an important impact on the European economy and, in particular, on the United Kingdom economy.

Lord Hannay of Chiswick: My Lords, does the Leader of the House accept my welcome that the lessons of last December seem to have been learnt on this occasion and that the Prime Minister has recognised that the right way to protect British interests is to stay at the negotiating table, not to reject any participation in negotiations? In my view, that is highly welcome.

As the Prime Minister begins to dance with wolves on referendum issues, does the noble Lord agree that it does not make much sense to parody the situation and the choice before us by talking about more Europe or less Europe? If we read the European Council conclusions, which I am glad the Prime Minister subscribed to, we see a great deal of more Europe in them in relation to the single market. There are references to patents, to the digital single market and to the single market in services, all of which require more Europe. It makes no sense at all to say that the British position is in favour of less Europe.

On Syria, does the Minister recognise that the Russian situation may not be one that we can work our way around? I am not criticising for one minute the attempt made in Geneva to achieve common ground,

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but it is doubtful whether that achievement is real or just apparent. If it is not real, it will surely be necessary to go to the Security Council to table a resolution imposing measures on the Syrian regime if it does not observe and honour the provisions of the Annan plan and put it to a vote, come what may. The only way you can find things out in the Security Council is by eventually putting it to a vote. If the Russians wish to veto it, they will do so, and that will be their responsibility.

Lord Strathclyde: I shall take those points in order. The noble Lord welcomed the fact that the Prime Minister wants to work together with his European partners. Of course, that has always been the case, including last December, when my right honourable friend was ready to support treaty change for the 27 in return for specific and practical proposals, which we put forward to safeguard the integrity of the single market. These proposals were not an opt-out for the UK, as some have suggested; they would have applied to the EU as a whole. However, other countries blocked them, and without those protections it was entirely correct that my right honourable friend used his veto.

Of course, there are some vital parts of the EU that have a positive impact upon the United Kingdom, and we should seek to preserve these. Equally, it is right for the Government to conduct a national audit of what the EU does and what the implications are for this country. Extensive preparatory work is progressing, and when that is complete we shall make a further announcement to Parliament.

As for Syria, I see entirely the force of what the noble Lord has said about putting down a UN Security Council resolution. It is, of course, a delicate matter. I do not think that the issue has advanced as far as that, but the option must be open to the Security Council to put forward a resolution.

Lord Lawson of Blaby: My Lords, is it not clear that the present situation in the eurozone is unsustainable, that it remains unsustainable despite the changes agreed with the European Council, and that sooner or later—sooner better than later—countries that are part of the monetary union will have to decide whether they are going to enter into a full-blooded political union or whether they should dissolve the single currency altogether? If the former, which I do not think it will be, there is no way this country can remain part of the European Union. If the latter, as I hope, and the single currency is dissolved, we can remain in the Union and I hope they will have learnt their lesson.

On the LIBOR scandal, I welcome a proposal to set up a Joint Committee of both Houses under the chairmanship of my excellent former special adviser. I am particularly glad that it will be a Joint Committee that includes Members from this House.

Lord Strathclyde: My Lords, on the first question, I do not know whether the eurozone is unsustainable. I do know that there is a crisis that needs to be resolved, and the sooner it is resolved the better. Our view is that at the end of last week a bold step was taken in the direction of trying to solve the crisis. Certainly, the

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financial markets liked it. Whether it is going to be enough, quickly enough, it is too early to tell. As the Government have said, there is a remorseless logic to how the eurozone operates, which is why we decided not to join it.

I am glad that my noble friend welcomes the Joint Committee on LIBOR and the banks. I think he is a member of the Economic Affairs Committee of this House, so he may well find himself a member of that Joint Committee, which would see a reversal of the roles between its chairman and him.

Lord Barnett: My Lords, could I clarify the Prime Minister’s position on an in/out referendum? My noble friend the Leader of the Opposition asked the question and the Minister did not seem to be clear in his answer. Is the Prime Minister’s position that he is opposed to an in/out referendum, full stop?

Could I also, I think, congratulate the Government? The Minister seemed to confirm what was reported in the Times last week, but which I did not see anywhere else, that the Government and the Prime Minister have agreed to give €1.3 billion to the European Investment Bank to help growth in Europe. It seems an odd thing to do, given that I would have thought that the Prime Minister’s primary consideration was to promote growth here. However, I would welcome such a proposition. Could the Minister confirm this?

Lord Strathclyde: First, my Lords, I thought I had made it pretty clear that the Prime Minister and the Government are not in favour of having an in/out referendum now. It is not the answer right now, but who knows? I would not support one, and I do not think that the Government would, because it is not the right choice to make. The right choice to make is that since Europe is in flux we should see where it ends up and where the relationship changes, if it does. We already have provision, agreed by Parliament, that when power moves from the United Kingdom to Europe there should be a referendum, so referendums should not concern us very much. However, if that relationship changes, perhaps the right thing should be to consult the British people, either in a general election or in a referendum.

As for growth, we were very much part of the group that called for a credible EU growth agenda. The European Council endorsed our growth priorities on Friday. For instance, we secured agreement for the immediate implementation of actions to eliminate unjustified barriers on services. This alone could add 1.6% to EU GDP over the next few years.

Lord Ryder of Wensum: My Lords, is not the use of “growth” incredibly mistaken in the context not only of my noble friend’s Statement but of the European Council’s conclusions, which I have before me? Indeed, the first paragraph of the Council’s conclusions states:

“The European Union will continue to do everything necessary to put Europe back on the path of smart … and inclusive growth”.

Perhaps my noble friend can explain the difference between growth and “smart … and inclusive growth”. Furthermore, I would be very grateful to know precisely

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what the Prime Minister’s definition of growth is, because I have been confused in recent weeks by his understanding of it. Growth in the long term in the European Union can be sustainable only by continuing to liberalise every country within it and by introducing supply-side measures. If my noble friend agrees that the Prime Minister accepts this principle, can he please let us know what supply-side measures the Prime Minister has been trying to persuade his European colleagues to implement in recent weeks?

Lord Strathclyde: My Lords, I, too, read those words from the conclusions of the Council’s meeting, which say:

“on the path of smart, sustainable and inclusive growth”.

I suspect that in different countries within the EU, it means rather different things. The conclusions go on to say that it should provide,

“a coherent framework for action at national, EU and euro area levels, using all possible levers, instruments and policies”.

It then directs the reader to the annexe.

That leads me to my noble friend’s second question. I entirely agree with him that growth in Europe will come from sustaining, liberalising measures within the European economy. Again, we have been at the forefront of that by arguing for sound money, for spending European money better and more wisely, and wasting less of it, for decentralisation and for reducing bureaucracy. All these measures are the kind of things that have worked in the past and will work again.

Lord Stoddart of Swindon: My Lords, the Statement refers to the British rebate. If there are proposals for changes to Britain’s rebate, can the Leader of the House say whether they would they have to be agreed by veto or QMV? My second question concerns the growth arrangements that four countries agreed on before the summit. Will Britain be making a contribution to that and will it add to the £150 billion to which we are committed through the ECB and the European Investment Bank? Finally, does he agree with Dr Liam Fox that Britain should negotiate a new relationship with the European Union and, indeed, that,

“life outside the EU holds no terror”?

Lord Strathclyde: My Lords, on that last point, there is no proposal for the United Kingdom to leave the EU, so the whole question simply does not arise. No analysis has been made, nor is likely to be made, of what life would be outside, and my right honourable friend has no intention of proposing a referendum on whether we should be in or out of the EU. There are substantial benefits to our remaining a member.

Yes, we are committed to funding aspects of the European Investment Bank. Many of these have been debated and discussed in the past.

Finally, the British rebate is absolutely fundamental to our monetary relationship with the EU. We will not agree to giving it up. The noble Lord asked me whether, if it were to be changed, it would be under unanimity

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or under QMV. I think that I am right in saying that it would be under unanimity; if that is not the case, I shall write to him.

Baroness Falkner of Margravine: My Lords—

Lord Deben: Does my noble friend accept that we will be more likely to get the rest of Europe to help us, and do the things that we want in terms of growth, if occasionally we emphasise the advantages of our membership instead of constantly suggesting that all sorts of things have to be changed? Will he please ask for a bit more positivity in our discussions about Europe?

Lord Strathclyde: There are many of us on all sides of the House who no doubt would like to be positive about the EU, but there a number of aspects to change over the course of the past 15 years that we do not believe should be dealt with at a European level; we would like to repatriate some of these things back to the United Kingdom. I know that my noble friend Lord Deben may not be entirely in agreement with all of that, but dare I say that when we have seen this audit of competences, there may be more agreement around the House as to what should be done at a national rather than a European level than seems to be the case at the moment?

Baroness Falkner of Margravine: My Lords—

Lord Grocott: My Lords, I have listened very carefully to the Leader’s explanation of the Prime Minister’s position on a referendum. I think that I am an average member of the public and I still have not got the faintest idea what his position on a referendum is. Does he seek a fundamental renegotiation of the terms and conditions of our membership of the European Union, which he would then like to put to the people in a referendum? In which case, I ask the Leader what shred of evidence his leader has from his prime ministership of two years’ standing that any other member of the European Union is prepared to agree to a fundamental renegotiation of Britain’s position within the European Union. Should he fail to get a fundamental renegotiation, will he then put that failure to the British public in a referendum? Presumably, his recommendation then would be that we should say no, and come out.

Lord Strathclyde: My Lords, I do not think that the noble Lord was trying to be helpful there at all. He was making his own case and asking questions on his own terms. The plain fact of the matter is that there is currently a fundamental reorganisation within Europe, a reappraisal of different relationships, particularly within the eurozone, which is inevitable, given the crisis that has engulfed the eurozone countries. It may, therefore, lead to a renegotiation; whether or not that is fundamental, it is too early to say. All that my right honourable friend the Prime Minister was saying is something that I think is glaringly obvious: if, under those circumstances, we wanted to change our relationship with Europe, and if that end point became clear, why on earth would we not wish to consult the British people, either in a referendum or at a general election?

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Arrangement of Business


4.45 pm

Moved by Lord De Mauley

That the House do now adjourn for 10 minutes.

Lord De Mauley: My Lords, in view of the fact that the second Statement has not yet started in the other place, I am afraid that I am going to have to beg to move that the House do now adjourn during pleasure, I suggest for 10 minutes.

Baroness Falkner of Margravine: My Lords, in the 20 minutes that we have had for this European Council Statement, not a single female Member of this House apart from the noble Baroness, Lady Royall, was able to subject the Government to scrutiny. I therefore wonder whether the House will consent to hear me put a question to the noble Lord the Leader on the European Council. My question is to do with the banking union.

Lord Stoddart of Swindon: My Lords, the Motion is whether the House should adjourn.

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, the point is that the debate that we are now on is about whether or not the House should adjourn during pleasure for 10 minutes. I suspect that it is probably my fault that we are in this position. I said that the first Statement should not start before 4 pm; it started pretty much on the dot of 4 pm, and perhaps if we had delayed it for another 10 minutes we would have been able to continue without a gap at all. I am in a bit of a quandary because I would have hoped that the Statement in the Commons from the Chancellor of the Exchequer would have already begun.

Baroness Hayman: Perhaps I could offer a potential solution to this. If, on the debate on whether the House should now adjourn during pleasure, the noble Baroness were allowed to make the point that she had not been able to put certain questions to the Leader of the House on the previous Statement and to explain to the House what those questions would have been, and perhaps the feminist dimension to them, and then the noble Lord the Leader were to answer that, we might even find ourselves in a happier position regarding the second Statement.

Lord Strathclyde: That is an astonishingly good idea. Although we are still on the Question of whether or not the House should rise during pleasure for 10 minutes, perhaps my noble friend Lady Falkner could reconsider what she was going to say.

Baroness Falkner of Margravine: My Lords, I am extremely grateful to the House and to the noble Baroness, Lady Hayman, for coming up with that ingenious solution. My question would have been to do with the banking union and the lack of clarity

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about the relationship between the enhanced powers of the ECB, as it will be the banking regulator and supervisor, and the Bank of England, because significant issues of UK banking priorities would be affected by banking union. I wonder if the noble Lord might have been able to tell the House, had he had the opportunity, whether Section II of the report on EMU, which says that,

“Member States will be closely associated … and regularly consulted”,

would also apply not to the 17 countries that are not in the eurozone or the eight that are applying to be in the eurozone, but to those that are neither applicants nor in the eurozone in terms of the relationship between the banking authorities.

Lord Strathclyde: My Lords, if that is the question that my noble friend would have asked, perhaps I can crave the indulgence of the House in giving her the answer that I would have given if she had been within the 20 minutes for Back-Bench time. I am not entirely sure whether it makes a difference that we have not had a female Member of the House asking a question; I think that it is a wonderful thing that my noble friend has asked a question, but I would hate to be in a position where we reserved a certain amount of questions for either male or female Members. For my part, I think that the female Members of this House play a most valuable role, and in some debates rather a bigger role than some of the male Members.

My noble friend’s question was to do with the common regulatory regime for EU banks; in other words, what the relationship will be between the ECB in its new role in relation to regulators, supervisors and banks in non-eurozone countries. The euro countries have agreed to establish a single supervisory regime involving the ECB. Throughout this whole process, we have been entirely clear that the UK will not participate in that. The details need to be worked out over the coming months but we are very clear that any supervisor must not undermine the single market or UK financial services. The European Council has agreed that any proposals must include,

“concrete proposals on preserving the unity and integrity of the Single Market in financial services”.

I see that the Chief Whip has arrived on the Front Bench. We have an unusual convention that we repeat Statements and do not pre-empt them. I was rather hoping that the Prime Minister would have finished his Statement by now and that the Chancellor of the Exchequer would be on his feet. I wonder if it would be appropriate, even though we are still discussing this Motion as to whether or not we should adjourn for pleasure for 10 minutes—

Lord Foulkes of Cumnock: I will try, as usual, to be helpful by saying a few words on this Motion about adjourning for pleasure. I do not think that we should. At least the Leader of the House was candid enough to confess that this timetabling was his mistake, but it is not the first mistake he has made in relation to the business of the House. In fact, in this instance, he is a serial offender. He ought to be very grateful to the noble Lords, Lord Hamilton and Lord Myners, to myself and others for insisting—and putting it to a

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Division, which was won, with the support of the Opposition—that the Committee stage of the Financial Services Bill be held on the Floor of the House. Given the events of the last few days, it would have been outrageous if it had been taking place in the Moses Room, hidden from public attention. Now, we can be sure that all of it, including the amendments, will be taken here on the Floor of the House.

When we have that debate, I hope that we will have, for once, the presence of the Minister of State at the Department of Trade and Industry, the noble Lord, Lord Green, who is never here, never answers Questions, never participates in debates and leaves it all to the poor noble Lord, Lord Sassoon, who does a wonderful job under the circumstances. It would be particularly helpful to have the noble Lord, Lord Green, here, because on 28 November 2005, it was announced that he was to become group executive chairman of HSBC. He has more knowledge from the time when all of this took place. He was chairman of one of the biggest banks and so can give us some inside information, if he is allowed to. I hope the Leader of the House will confirm—

Lord Myners: I wish to be helpful to the House. It is also worth pointing out that the Minister, the noble Lord, Lord Green of Hurstpierpoint, was chairman of the British Bankers’ Association when these manipulations of the BBA’s LIBOR rate were taking place. It is reported that the executive of the BBA was aware that manipulation was taking place but took no action. How can this allow the noble Lord, Lord Green of Hurstpierpoint, to continue to be a credible adviser to the Chancellor of the Exchequer on banking, a role that he seems to have taken over from the poor noble Lord, Lord Sassoon, for whom we all have a great affection?

Baroness Royall of Blaisdon: My Lords, I wish to apologise. I am grateful to my noble friend Lord Foulkes for bringing these issues to the attention of the House. We have had a very worthwhile discussion but I wish to place on record my thanks to the government Chief Whip. As I understand it, it was at the Opposition’s request that the Statement was promptly at 4 pm, for the convenience of some Members of my Benches and of the whole House. I do not wish to cast aspersions on the Leader of the House when, in fact, I should be the one taking the blame.

Lord Strathclyde: I am very grateful for that. I have very broad shoulders on these things, but it demonstrates that I made yet another mistake in giving way to the noble Lord, Lord Foulkes.

As for the noble Lord, Lord Myners, let everybody just remember what his role was in all this as a very senior Minister in the Treasury in the previous Government.

Lord De Mauley: My Lords, in view of the fact that the Chancellor of the Exchequer has now started, I beg leave to withdraw my Motion.

Motion withdrawn.

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FSA Investigation into LIBOR


4.56 pm

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

“Mr Speaker, on Thursday I updated the House on the Financial Services Authority’s investigation into Barclays and the attempted manipulation of the LIBOR market in the years running up to and during the crisis. The House has just heard from the Prime Minister, and I would like to give more details of the steps we are taking.

This morning, I spoke to Marcus Agius, who confirmed that he was resigning as chairman of Barclays because of the unacceptable standards of behaviour within the bank. The Treasury Select Committee is calling the chief executive of Barclays to account for himself and for his bank on Wednesday. I look forward to hearing his answers.

As I also said last week, every avenue of possible criminal investigations for individuals involved in attempted manipulation of LIBOR is being explored. However, in the view of its chairman, the noble Lord, Lord Turner of Ecchinswell, the powers that were given to the authority do not allow it to pursue criminal sanctions. People in the country ask why it did not have the necessary powers. Those who set up the tripartite system must answer for that. People ask whether these gaping holes in the existing law mean that no action at all is possible. After all, fraud is a crime in ordinary business; why should it not be so in banking? I agree with that sentiment, and I welcome the Serious Fraud Office’s confirmation that it is actively and urgently considering the evidence to see whether criminal charges can be brought, particularly in relation to the current Fraud Act and in relation to false accounting. It expects to come to a conclusion by the end of this month. We would encourage it to use every legal option available to it.

I would like to address three further issues today. First, what happens to the money we get from the fines; secondly, urgent changes to the regulation of LIBOR and other markets to prevent such abuse occurring again and to ensure the UK authorities have the powers they need to hold those responsible to account; and thirdly, the wider issue of what went so badly wrong in the culture of our banking system and the way it was regulated which allowed such fundamental failures of basic standards of conduct to go unchecked and unchallenged.

Last week, I said that we wanted to ensure that fines paid by the financial services industry in future go to the Exchequer. Today, I can confirm we will propose amendments to the Financial Services Bill in the autumn to make this happen. This will remove a long-standing anomaly and bring the regulator into line with regulators in other sectors of the economy. The new arrangement will apply to fines received from 1 April 2012 so that it includes the Barclays penalty.

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From now on, the multimillion pound fines paid by banks and others who break the rules will go to the benefit of the public, not to other banks.

That brings me to the second question of the urgent changes we need to make to the regulation of LIBOR to prevent this ever happening again and to ensure that in future authorities have the appropriate powers to prosecute those who engage in market abuse and manipulation. I have today asked Martin Wheatley, the chief executive designate of the Financial Conduct Authority, to review what reforms are required to the current framework for setting and governing LIBOR. This will include looking at whether participation in the setting of LIBOR should become a regulated activity, the feasibility of using of actual trade data to set the benchmark, and the transparency of the processes surrounding the setting and governance of LIBOR.

The review will also look at the adequacy of the UK’s current civil and criminal sanctioning powers with respect to financial misconduct and market abuse with regard to LIBOR. It will assess whether these considerations apply to other price-setting mechanisms in financial markets to ensure that these kinds of abuses cannot occur elsewhere in our financial system.

We need to get on with this and not spend years on navel-gazing when we know what has gone wrong. I am pleased to tell the House that Mr Wheatley has agreed to report this summer so that the Financial Services Bill currently before Parliament or the future legislation on banking reform can be amended to give our regulators the powers they clearly need.

The review is essential to ensuring that we mend the broken regulatory system introduced by the previous Government, which allowed these abuses to happen. But the manipulation of the most-used benchmark interest rate reveals that there is a broader issue of the professional standards and culture in some parts of the financial services industry that was allowed to grow up in the years before the crisis and which may still need change.

I do not think a long, costly public inquiry is the right answer. It would take months to set up and years to report. We know what went wrong. We cannot wait until 2015 or 2016 to fix it. In just six months’ time we will be bringing forward the banking reform Bill that will implement the recommendations of Sir John Vickers’s Independent Commission on Banking. This will bring far-reaching, lasting change to the structure of British banks, ring-fencing retail banks from their investment banking arms. Let us see whether we can use this banking Bill to make any further changes needed to the standards of the banking industry, and the criminal and civil powers needed to regulate it and hold people to account for their behaviour.

As the Prime Minister said, we propose that Parliament establishes an inquiry into professional standards in the banking industry. The Government will, in the coming days, lay before both Houses a Motion to establish a Joint Committee drawn from the Commons and the Lords. It should be chaired by the chair of the Treasury Select Committee, the honourable Member for Chichester. He and his committee have already been quick off the mark in investigating the issue, and we certainly await their hearings this week to proceed.

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I propose that the terms of reference should be these: building on the Treasury Select Committee’s work and drawing on the conclusions of UK and international regulatory and competition investigations into the LIBOR rate-setting process, consider what lessons are to be learnt from them in relation to transparency, conflicts of interest, culture and the professional standards of the banking industry. I propose that it should be able to call witnesses under oath, including current Members of Parliament and Lords. I can confirm that we will provide the committee with the resources it needs to do the job. I would suggest to the House that we ask the Joint Committee to report by the end of this year, 2012. That is enough time to do the job—and to do it well—but not so long that this issue drags on for years, and it means, in very practical terms, that we can amend our banking Bill to take on board its recommendations.

I hope that all parties will support the Motion we put forward. The failure to regulate the banks in the boom years cost this country billions. The behaviour of some in the financial services has damaged the reputation of an industry that employs hundreds of thousands of people and is vital to the economic prosperity of the country.

We are changing the failure of regulation; reforming the banks. Now it is time to deal with the culture that flourished in the age of irresponsibility and hold those who allowed it to do so to account.

I commend this Statement to the House”.

My Lords, that concludes the Statement.

5.03 pm

Lord Eatwell: My Lords, I am most grateful to the noble Lord, Lord Sassoon, for repeating the Statement made by the Chancellor of the Exchequer in the other place. I welcome the content of the Statement as far as it goes, but it does not go far enough.

It is difficult to exaggerate the seriousness of the LIBOR scandal for three reasons. First, because of the manipulation of this key benchmark rate, a London standard recognised throughout the world has accordingly affected financial transactions worldwide, directly impacting on the financial well-being of millions of families and firms.

The Serious Fraud Office has powers to investigate and to bring prosecutions in cases of fraud defined as,

“an act of deception intended for personal gain”.

This includes publishing false information to mislead investors as well as fraudulent trading. I am no lawyer, but common-sense interpretation of those words would suggest that the people with whom we are dealing have indeed been practising deception for personal gain. But they are not simply persons with some sort of criminal bent; they have been moulded by the environment in which they work and by what is regarded as acceptable practice on a day-to-day basis—fine for the firms for which they work, just so long as they make money for them.

Secondly, their actions have done enormous damage to our financial services industry in general and to the City of London in particular. They have not merely undermined but blown up the City’s hard-earned

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reputation for integrity and fair dealing and, most of all, destroyed the trust without which no honest financial system can operate. Every honest firm should welcome effective regulation. I am sick of hearing that regulation limits the operations of free markets and that if legislation results in more effective regulation banks will leave the country. Now we know just how free those markets actually are. We should not be held to ransom.

Thirdly, the financial services industry is, I am afraid, an industry with form. In the same week as we learnt of the manipulation of LIBOR, we learnt of the mis-selling of interest rate swaps, following on from the PPI mis-selling scandal. As the Chancellor commented, all of this is on top of the irresponsible lending practices at home and abroad that brought about the international financial crisis—practices in which British banks played a leading role, inflicting huge economic costs on the British people.

In the light of those three factors, an inquiry should meet the following criteria. First, it must address the culture of banking and the financial services industry as a whole in relation to the internal organisation of industries and the regulatory framework in which they operate. Secondly, it must address the key question of the boundaries of civil and criminal culpability. Thirdly, it must fundamentally reassess the scope of regulated activities. The inquiries that have been announced today meet only one of those criteria—the second, on the boundaries of civil and criminal culpability. I am delighted to hear that Martin Wheatley will conduct a speedy investigation into the narrow issue of the setting of LIBOR and the related issues of criminal sanctions.

The proposal for the parliamentary inquiry fails on the following grounds. First, the scope of the terms of reference, although it sound quite broad, is in fact limited to the lessons learnt from,

“regulatory and competition investigations into the LIBOR”.

So it is just about the lessons learnt from that particular problem, not the broader issues of professional standards in the industry as a whole and the structure of the industry. Secondly, it fails to address the overall question of the scope of regulated activities. Thirdly, a parliamentary inquiry will fail to restore public trust by creating a national consensus about what has got to be done. I have great respect for the chairman of the Commons Treasury Select Committee, not least because of the excellent critique of the Financial Services Bill by his Select Committee. Let us note that the most important elements of that critique have been pointedly ignored by the Government. A parliamentary inquiry is bound to appear to the public to be too introverted—a closed, establishment shop to which they have limited access, working within terms of reference that are far too restrictive. That is why there must be a full public inquiry that addresses all the issues at stake. As the Chancellor said, we know what has gone wrong. Yes, indeed, we do—but, at the most fundamental level, we do not know why or how.

I quite understand the argument that a proper inquiry might take too much time, but that can be easily dealt with by instructing the public inquiry to deal with issues sequentially. After Mr Wheatley’s report there could be an interim report on the immediate

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LIBOR issue, described in the terms of reference for the parliamentary committee. Following on from that, a much more considered report on corporate failings in compliance, culture, governance and organisation throughout financial services is the only full answer to the question: why did this happen? We owe the honest, committed people in the financial services industry that inquiry to lift the cloud that will otherwise hang over them.

The development of the financial services industry in this country has been guided by great public inquiries: the Macmillan Committee in the 1930s and the Radcliffe Committee in 1958 produced landmark reports. Now is the time for another. The reforms of the 1980s, while bringing many benefits, have had potentially disastrous, unintended consequences. There is a need for fundamental reform to the structure, style and content of the financial services industry to provide a framework for successful development in the future.

The Government have been bold in establishing the Vickers inquiry and bringing forward the current proposals and they deserve credit for that. However, the current proposal for a parliamentary inquiry, I regretfully say, by its very limitations—and especially the limitations of the terms of reference—can only do harm.

I should like to ask the Minister a couple of brief questions. First, why have the Government limited the scope to lessons drawn from international regulatory and competition investigations into the LIBOR rate-setting process? Why does it not go wider? Secondly, when did the Treasury first know of the substance of the FSA inquiry into LIBOR-fixing at Barclays?

5.11 pm

Lord Sassoon: My Lords, I am grateful for the welcome that the noble Lord, Lord Eatwell, gave to the Statement. However, I am sorry that he thinks that the immediate action that the Government have taken is not appropriate and that he would like it to go further.

I cannot think of a better way of getting a national consensus and getting rapidly to the heart of these issues than through a Joint Committee of the two Houses—not least because, as we saw two weeks ago in the Second Reading of the Financial Services Bill, there is extraordinary and relevant expertise that can be brought to bear from this House alone. There was a remarkable debate on that Bill in which two former Chancellors, three former Treasury Permanent Secretaries, former members of the Court of the Bank of England, other former Treasury Ministers and leading financial journalists all spoke. We should not undersell the great expertise that can be brought to bear through the Joint Committee, which will have public hearings and be able to call, under oath, whomever it chooses to call. I do not agree with the noble Lord that we should go through some other route.

I remind your Lordships that recent public inquiries and those that are still live have taken an extraordinary amount of time and cost a huge amount of public money. Leveson, established in July 2011, has so far cost £2.8 million; Baha Mousa, started in May 2008, ran for more than three years at a cost of £13 million; the Mid-Staffs inquiry started in June 2010 and is still

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running—it is nearly finished—and so far has cost £11.8 million. These are expensive and long inquiries. For the safety and good order of our financial services markets, we need to get on with the inquiry and a Joint Committee is the appropriate way to do so.

The proposed terms of reference will come back to your Lordships’ House via a Motion that will go through both Houses. I do not read them as being limited in the way that the noble Lord, Lord Eatwell, seeks to limit them. The proposed terms of reference refer to drawing on and building on both the Treasury Select Committee’s work and the conclusions of the UK and international regulatory and competition investigations into the LIBOR rate-setting process. Then I read what follows, which states,

“consider what lessons are to be learnt from them in relation to transparency”—

that is LIBOR and the work of the Treasury Select Committee—

“conflicts of interest, culture and the professional standards of the banking industry”.

I read that as the committee being able to go extremely wide in its investigation and I am sure that it will do so. I certainly do not believe that there is a problem of the sort identified by the noble Lord.

As to when the Treasury first knew about the substance of the LIBOR-fixing allegations and investigation at Barclays, naturally Treasury officials have been in contact with the FSA during its investigations to consider LIBOR policy as it is in contact with FSA officials about many other things that they do. As was the case under the previous Government, it would be inappropriate to disclose the details of meetings while this is an area of developing policy.

5.16 pm

Baroness Kramer: My Lords, I said last week that there was public outrage, and that outrage has only been growing. Mr Diamond remains in post; he just does not get it. That now raises questions about the fitness of Barclays’ board, which also just does not get it. Does the Minister agree that this matters? I very much welcome the review that Martin Wheatley will lead. Whatever changes are made to the rate-setting of LIBOR will always depend on engagement with the major banks. Therefore, there must be confidence that the banks fully understand their role in providing that information.

The other area of outrage, as I recognise it, is the perceived impotence of the FSA in being able to pursue sanctions for activities that are so widespread that, according to the Telegraph, they have their own technical term—the,

“dislocation of Libor from itself”.