8.19 pm

Lord Stoneham of Droxford: My Lords, I welcome the debate and thank the noble Baroness, Lady Whitaker, for initiating it. I found it difficult to disagree with anything that has been said so far in the six speeches tonight—but I suppose that noble Lords would expect me to say that, particularly of my own colleagues.

I declare my interest as chair of Housing 21, a national housing and care provider for the elderly. The Future Homes Commission report shows the continuing severe gap between the current housing supply and what is actually needed. It also shows the potential of housing investment stimulating the national growth rate, since £1 spent in housing creates £2.84 elsewhere in the economy. Good housing design and energy- saving initiatives underline the social benefits of new housing, and pension fund investment in UK rental and shared ownership housing is overdue and needed. It can be used to keep the pressure off the government deficit.

Housing must be one of the key drivers of the coalition Government’s growth strategy. It played this role in the 1930s recession while government spending was constrained and interest rates were low. No one can doubt its potential now. Although I hope that there has been an improvement this autumn, the problem is that we have been going backwards in the past year. In the 12 months to September 2012, new housing starts, at 98,020 homes, were 9% down on the previous

4 Dec 2012 : Column 626

year, ending in September 2011. More worryingly, in the same 12 months to September 2012, housing association new starts were down 23% at 16,810. I hope that this is simply a case of worse before better, but we have to ask why this performance has been so disappointing.

We know that the mortgage market is still difficult and restrictive and lenders have been cutting back. In March 2012, the Government aimed their new-buy indemnity scheme to help, but there remains a problem with the higher interest rates now charged on these new-buy mortgages. Housing associations have also suffered from uncertainty due to changes in grant funding and the change in their overall funding arrangements, as they have had to move to private bond placements as banks have reduced their previous dominance in this sector. Sadly, confidence among potential house buyers has remained low out of fear of unemployment, and because the fall in house prices may not yet be complete. Changes in the planning system have also caused uncertainty in the market, but as the noble Baroness, Lady Whitaker, said, there remain some 400,000 potential homes with planning permission still to be built.

So what is to be done? First, the Government, through the HCA, must ensure the current programme of funded social housing must is be delivered. There is a lot to do in the last two years of this Government, and the recent further government initiative on retirement housing is also welcome. We just need to get on with it, but we also need to do much more. In September, the Government announced their £10 billion guaranteed housing loans for private sector renting and social housing. This is a real opportunity, but I fear we remain a little cautious about the extra housing we will get from it. The indication that I have received is the Government’s target by 2015 is for 15,000 extra homes. I hope that the Minister could clarify this. I believe that, given average house prices, it should be three times this, and if we spent a higher proportion of this funding on actual development projects its impact on the economy, as the Future Homes Commission demonstrates, would be three times the housing investment.

Pension funds could provide further funds for private rented, council and other forms of social housing, where funding streams could be secure. We should ask whether the Government are going to allow councils to borrow now that they control their housing revenue accounts so a further impetus on new housing could be sourced.

I finally return to a previous theme of mine. To be successful in government, you need people who can demonstrate that they can pull the right levers to get things done. We need to get the most from the guaranteed housing loans. We have to keep the pressure on public sector departments to release land which could be used for housing development. We have to keep the dialogue going with lenders and developers to improve confidence in the sector and wider funding opportunities. We have to work with housing associations and councils to maximise their plans for more housing. So we need the drive and determination of a Minister, such as a Heseltine or a young Macmillan, to direct and galvanise all this work. We also need to give the Minister an

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objective of doubling our current annual housing development by 2015. The Future Homes Commission has shown us the potential of what is required. The coalition must now grasp the levers and deliver.

8.24 pm

Lord McKenzie of Luton: My Lords, I, too, would like to thank my noble friend Lady Whitaker for the chance to discuss, albeit briefly, the report of the Future Homes Commission. As the noble Lord, Lord Best, said, it is one of a string of important reports on housing that we have received recently. We welcome this report, which contains a number of innovative proposals to tackle the worst housing crisis in a generation.

We find ourselves in a situation where we are building fewer than half the new homes needed to keep pace with new household developments, let alone to address the backlog. There are some 2 million people on housing waiting lists; homelessness is increasing; and the private rented sector has rising rent levels and inadequate regulation where, according to the commission, some 37% of property fails to meet the decent homes standards. As the noble Lord, Lord Greaves, says, there is a shortage of affordable housing, and as the noble Lord, Lord Stoneham, has just told us, housing stocks are actually declining. This is at a time when growth in our economy is weak at best, and is dragged down by the dramatic decline in the construction sector, where every £1 of construction output could generate nearly £3 of demand in the economy. Where people need homes and jobs, young people need skills and apprenticeships, the economy needs growth and the construction sector needs work, the imperative of building more homes should be something on which we can all agree. To increase the number of new homes built every year to over 300,000 certainly sets an ambitious target—indeed, a step change.

However, this is not just a numbers game. It is about the quality of the homes provided; crucially, it is also about how this scale of investment is to be funded—a matter spoken to by my noble friend Lord Whitty in particular. We very much support the emphasis of the commission in highlighting the key role of local councils in helping to create sustainable communities. We share the vision of mixed communities living in well designed and high quality homes in neighbourhoods with good facilities where people want to live. However, sustainable communities will not be helped if people are shunted from pillar to post because of draconian housing benefit rules. What is clear is that in the current climate, traditional forms of finance from the Government and banks will not be sufficient to deliver the scale of funding required. There is a lack of mortgage finance for those who wish to buy and a current dearth of institutional investment for those who want to rent. The Future Homes Commission drew attention in particular to the demand for private sector rental property as being a huge and neglected issue, driven not so much by those who cannot afford to buy, but by those who choose to rent, particularly for job mobility.

As we have heard, the suggestion is that the funding gap can be filled by institutional investors. The analysis seems to show that the percentage of UK financial institutions’ property portfolios held in the residential

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sector, at 1%, is significantly less than in many other countries. The RIBA points out that typically, for residential property, the institutions do not wish to take on planning or construction risk and that currently there is very little for them to invest in. There is a lack of good quality, large-scale rented and shared ownership schemes.

The commission proposes that there should be a local housing investment fund of £10 billion, created by pooling 15% of the assets of the largest 15 local authority schemes. This 15% is the current maximum of the assets of such schemes which can be invested in infrastructure, although the Government are consulting on increasing this to 30%. Do the Government support this recommendation? We should clearly be mindful that any investment of pension fund assets has to be in the best interests of the members. Following the review by Sir Adrian Montague, can the Government outline what they now consider to be the main barriers to significant institutional investment in housing?

My noble friend Lady Whitaker, supported by a number of noble Lords—the noble Baroness, Lady Maddock, my noble friend Lord Sawyer and the noble Lord, Lord Greaves—alighted on the recommendations about the need to change attitudes to poor design, including space standards. These matters affect not only the well-being of households that occupy properties but their very willingness to buy new homes in the first place. Good design is also a component of getting the acceptance of communities to new developments. We acknowledge that the Government have announced a review of housing standards, but would not wish to see the ability of local councils to set standards being diminished. We certainly subscribe to the concept that local authorities should have a pivotal leadership role at every stage in developing new housing provision. This is essential in tackling what the commission describes as a fragmentation of the development process. However, we remain dismayed at the latest government proposals to bypass local planning authorities which are contained in the Growth and Infrastructure Bill.

The commission concludes that to realise its vision,

“land will be needed in or close to virtually every city, town and village”.

This will certainly test the leadership of local authorities and, indeed, the effectiveness of the duty to co-operate.

8.30 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, I join other noble Lords in thanking the noble Baroness, Lady Whitaker, for drawing this report to the attention of the House. I do not think there is any disagreement among any of us about the importance of it. It is aspirational and practical and draws attention to a lot of the things we all know exist. It also draws attention to things that we all know we would like to see. There is a small problem with finance at the moment but that does not mean to say that we cannot all look forward and take serious steps to deal with it.

I agree with all the points that have been made about making sure that we have adequate and affordable housing and a mixture of tenures. A number of noble Lords have specifically mentioned that any new housing

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should be of good design and good quality. It is a complete waste of money not to do that. One has to be able to send messages out to developers that it is important that a block of flats is not just thrown up that looks like any other block of flats that is thrown up elsewhere. Therefore, I have no difficulty with any of those points, and I do not think that any other noble Lords have either.

I do not think any of us would disagree with the fact that we are not building enough homes—we are not. We know that. My honourable friend the Minister for Planning made that very clear in an interview the other day. There is government recognition that there has to be a doubling in the number of houses that are built over the next few years. That may be aspirational, but we know that it is required. However, things are moving gently. There is a projected growth of 232,000 households per year until 2033. We know that there were 117,000 completions last year and the expectation is that at least that figure will be met this year and going forward. However, it is clear that that will still not be enough.

The Government also support the necessity to support people’s aspiration to own their own home. A number of noble Lords pointed that out. I think that the noble Lord, Lord Sawyer, pointed out that the security of knowing that they have a home in which they want to live is a real part of people’s lives. Therefore, the quality of homes, both of rented and affordable housing, is very important.

However, the report recognises that not just government action is needed. A response is also needed from the industry: that is, housebuilders, mortgage lenders and landowners. That includes public land. As noble Lords will know, we are beginning to put pressure on departments and local government to release the land they do not need. Assembling land in this way will also be an important aspect of ensuring that there is enough land available on which housing development can take place.

The noble Lord, Lord Best, mentioned four reports that are all pouring out at the same time. I thank him for what he has done and acknowledge that the happy reports on housing for older people to which he referred have raised very important issues, particularly the fact that if older people can get housing which they like and want to move to, which may not be as big as their current family home, they release those homes for families and other people.

The report, as has been said, calls for an increase in the number of new homes built every year to 300,000, which of course is substantially above the current predictions. It also looks for a £10 billion local housing development fund, to be financed by local authority pension funds. Practically all noble Lords who have taken part have referred to the pension funds. There is no disbarment to local government pension funds doing that at the moment. They can already choose to invest in affordable housing projects, although there will be constraints on how much they can put into it—I believe that a figure of 15% was put forward. However, this is not something for which the Government need to legislate or do anything other than encourage—as they are doing—the local authority pension funds to

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think about making that investment. As everybody has said, it is correct that this money could be used to boost home ownership and development, and once we can get the construction industry moving, that will itself contribute to the economy; it will create new jobs and skills—the noble Lord, Lord McKenzie, referred to apprenticeships—and it begins to open up and unlock all sorts of problems.

The Government are investing a lot of money in housing; the noble Lord, Lord Greaves, perhaps rather unaccommodatingly suggested that there were a plethora of announcements coming out on this. However, to be fair, there is a lot of money and a lot to be said about it. Investing £4.5 billion—a significant sum of money—along with £15 billion from the private sector, will deliver 170,000 new, affordable homes over the period of the spending review. In the September package we provided an extra £300 million to deliver 15,000 additional affordable homes and to bring a further 5,000 empty homes back into use. The Government, therefore, are investing heavily in housing and are encouraging others to do so.

A £10 billion debt guarantee will support more rented housing, including affordable rents. Our reforms to the planning system, which have already been mentioned, will all improve the speed and quality of planning decisions and will bring in local people in order to get their enthusiasm and encouragement for development. So often, as we know, local people are very resentful about any development. Neighbourhood planning should ensure that there is not only a better idea of where housing should go, but there should also be a better idea of quality of housing, what that housing is for, whether or not it is family housing, and where it is placed. Therefore there will not be so much antagonism to development. Part of the Localism Act underscored the point that developers ought to talk to local people about what they want to do in order to try to get that accepted before it goes to a planning committee. We also announced in September that the Government and housebuilders are together investing an additional £900 million in FirstBuy, which will help first-time buyers into home ownership.

These are not trivial sums of money but rather mega-sums, which will generate a renaissance of housebuilding and homebuilding. As noble Lords know, I never like to be unkind, but I point out that the previous Government were not absolutely shining white in terms of the numbers of homes that were delivered. I believe I am correct in saying that the number of homes we are building is well in excess of those built over the last few years of the previous Government. We need to move on all of that.

The Deputy Prime Minister announced last week that the European Investment Bank is going to inject £400 million into affordable housing, particularly to deal with energy-efficient homes—again, a matter that was raised in the report. Another £225 million of government money will leverage private investment to help unlock the large housing sites. The housing development fund is intended to bring together local government pension funds for investment in housing. As I said earlier, that can be done without further legislation.

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Any investment decisions made by the Local Government Pension Scheme must be made by its local administering authorities. They must act in a way that protects taxpayers and local services. I know that the Local Government Association is already bringing together people associated with local government pension funds to discuss what can be done.

I am rapidly running out of time. The best that I can do now is to say that I hope that I have given to the House a sense of the fact that we welcome this report as being aspirational and pragmatic. There is plenty in it for everyone to work on. We acknowledge that design and space issues are important, and we clearly acknowledge that we need more affordable housing, and more housing, in this country. The ways of achieving that against the background of a not very secure financial position are important. However, the ideas that are flowing in from all areas are very similar, and on much of this we will be able to harness the future housing of the country.

I thank the noble Baroness again for introducing this debate. I know that we will return over and over again to the matters raised in the report, to which the Government are already directing their attention and addressing in many ways.

Crime and Courts Bill [HL]

Crime and Courts Bill

Report (2nd Day) (Continued)

8.42 pm

Amendment 109A

Moved by Lord Beecham

109A: Clause 21, page 18, line 26, at end insert—

“75B Minimum size of charging order

The Secretary of State shall by regulation prescribe the minimum amount above which a charging order may be granted in respect of a judgment debt, which shall be laid before, and approved by a resolution of, each House of Parliament.”

Lord Beecham: My Lords, this amendment relates to yet another matter affecting very often the poorest in our society and certainly those facing acute financial difficulties. Some time ago, the Government launched a consultation about the financial threshold below which charging orders on property would not be available to enforce debts. The previous Government made some legislative provision potentially allowing for this and they consulted on the matter. The intention was to legislate subsequently but the consultation ended in February 2010, which did not leave that Government very much time.

A month later, the Office of Fair Trading issued a guidance document on irresponsible lending and recommended that creditors should make it clear to borrowers at the time of entering into any loan agreement that there was a possibility of a charging order being made against their property. I am afraid that subsequently nothing happened about that. Time went by and the Government then launched their own consultation, having indicated in the coalition agreement that there would be a threshold of £25,000 below which enforcement

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action could not take the form of a charging order against property. That was in the coalition agreement but it would appear that, as a result of the consultation, the industry persuaded the Government that this was insufficient. Consequently, the policy is now apparently that the threshold will be only £1,000. We are talking here not about mortgages but about unsecured debts. Therefore, with only £1,000 owing, it would be open to a creditor to seek a charging order, which could lead to the loss of a home and, for that matter, to a great deal of anxiety and stress for the debtor.

In the debate in Committee, the noble Baroness, Lady Northover, did not really give an answer as to why the Government had changed their position from that outlined in the coalition agreement, which seemed a perfectly sensible provision. She made some reference to the fact that an alternative might be worse, inasmuch as creditors might go for bankruptcy proceedings, although of course a creditor has that possibility in any event. The protection of the family home must surely be a major consideration, particularly where there are children, as there very often will be in these cases.

8.45 pm

Therefore, the amendment seeks to give the Secretary of State the option to prescribe a minimum amount above which a charging order may be granted in respect of a judgment debt. It does not stipulate £25,000 or any particular figure but it does set out a procedure under which an affirmative resolution will be required to approve the level that the Government ultimately opt for. My hope is that it would be very much closer to the figure of £25,000 than the pitifully low figure of £1,000, which apparently is now government policy.

I am not quite sure where we are in relation to implementation of the Government’s proposals. Perhaps the Minister will be able to enlighten the House about that. However, assuming that the Government continue to take that stance, I ask why they have chosen to abandon their position in the coalition agreement and what the potential implications are for other costs—the kind of costs that have been referred to in earlier debates that might fall on local government or, indeed, the benefits system—in terms of families being dispossessed and having to be rehoused, with children possibly being taken into care and all the other consequences that can follow from the loss of a home. Furthermore, why do the Government seem so anxious to protect the interests of creditors, who clearly, in the light of the warnings from the Office of Fair Trading two years ago, are certainly not always of the most reputable kind? In particular, the Office of Fair Trading warned against threats and harassment on the part of creditors seeking to recover their debts in this way.

I do not know whether the Government have definitely established a position—perhaps we shall find out shortly—but I hope they have. They will revert much more closely to the coalition agreement’s projected figure than the abysmally low figure that was canvassed in Committee, although the Government have now happily decided to deal with payday loans and the extortionate rates of interest charged there. Of course, payday loan lenders could be taking advantage of this

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very provision, whatever rates of interest they charge. On present form, with a debt of as little as £1,000, they could seek possession of property via a charging order on the debtors. That would be an appalling outcome and, given that the Government have sensibly accepted the proposals of my noble friend Lord Mitchell in respect of some elements of the activities of these lenders, I hope they will apply a similar approach to the issue in this case. If it is not possible to deal with this amendment today, perhaps this matter could be dealt with at Third Reading. I beg to move.

The Minister of State, Ministry of Justice (Lord McNally): My Lords, as explained by the noble Lord, Lord Beecham, this amendment raises the issue of charging orders. Noble Lords will be aware from the debate in Committee that the power to prescribe the minimum amount above which a charging order may be made already exists in Section 94 of the Tribunals, Courts and Enforcement Act 2007. It makes provision for the Lord Chancellor to make regulations that a charging order may not be made to secure a sum of money below a certain amount. It remains the Government’s intention not to exercise this power. There are several reasons for that.

The Government are committed to providing the right level of protection to genuinely vulnerable debtors. However, we must not do that at the expense of the effectiveness of the civil justice system. We have a duty to ensure that creditors have reliable methods available to them to enforce their debts and charging orders are a legitimate and proportionate option for them to pursue. It is essential to remember that a charging order does not compel a debtor to sell their property. That can be achieved only through an order for sale. Most creditors never apply for orders for sale; only 0.5% of the creditors who have applied for a charging order go on to place an application for an order for sale. Nevertheless, the Government have ensured that there are effective safeguards in place for debtors who are subject to such an order.

In November this year, following a public consultation on this subject, we laid before Parliament draft regulations which set a £1,000 financial threshold for orders for sale relating to Consumer Credit Act cases. These regulations are subject to the affirmative procedure so there will be a separate opportunity for your Lordships’ House to consider those. Responses to the Ministry of Justice consultation on solving disputes in the county court in 2010 indicated that £1,000 was the most appropriate threshold. Respondents to the consultation felt that a higher threshold would risk pushing creditors to seek more draconian methods of recovering their money, such as bankruptcy proceedings, which would expose debtors to a significantly increased likelihood of losing their homes, an outcome that none of us would wish to see.

We must also remember that orders for sale are subject to judicial discretion. The court must take into account all the circumstances of the case before deciding whether to make an order. That provides essential protection against disproportionate action. The consultation showed that a high financial threshold for the making of an order for sale would restrict judges’ discretion in individual cases—for example

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where a debtor has all their assets tied up in property including investment properties or stocks and yet owes a number of small debts to multiple creditors. It may be equitable to grant an order for sale to release some of that capital.

With the new order for sale regulations in place, creditors have the assurance that they can recover what is owed to them while debtors are not in danger of disproportionate enforcement action. The Government believe that these regulations are proportionate and an effective approach to achieving the necessary delicate balance between creditors and debtors. They therefore do not plan to introduce a financial limit on charging orders. In the light of that explanation I hope that the noble Lord will be prepared to withdraw his amendment.

Lord Beecham: My Lords, that is a very disappointing response, which echoes the response given by the noble Baroness, Lady Northover, in Committee in July. Neither she nor the noble Lord have explained why the coalition agreement, which is very explicit in terms of laying down a £25,000 threshold for an order for sale, which of course follows on from a charging order, has been abandoned. The noble Baroness said:

“In terms of the coalition's commitment to a threshold for orders for sale at £25,000, evidence in the consultation did not support a £25,000 limit”.—[Official Report, 2/7/12; col. 542.]

But we do not know—at least I do not know—what that evidence was and from where it was derived. It was presumably from the creditors. I cannot imagine that there would be significant evidence from those who owed money or those who advise those who entered into consumer credit arrangements who were in difficulties suggesting that £25,000 was too high a limit.

Furthermore, at the last count, the Government were at least contemplating a £1,000 limit. That is much too low in my submission but even that has been abandoned without any explanation. The Government are falling over backwards to help creditors in this position—many of them are not the most desirable organisations operating in the financial services world—at the expense of the worry and disturbance that can be caused to borrowers and their families and ultimately to the taxpayer, because in so far as these orders are enforced, homelessness and all the other social consequences will follow which will be a burden for the taxpayer.

It is extremely disappointing that the Government have caved in to pressure from the industry at the expense, I repeat, of very vulnerable people and the taxpayer at large. But as it is clear that the Government are not disposed to make any move consistent with their original policy, I feel obliged to beg leave to withdraw the amendment.

Amendment 109A withdrawn.

Amendment 110

Moved by Lord McNally

110: After Clause 21, insert the following new Clause—

“Disclosure of information to facilitate collection of fines and other sums

4 Dec 2012 : Column 635

(1) Schedule 5 to the Courts Act 2003 (collection of fines and other sums) is amended as follows.

(2) Paragraphs 9A to 10 (disclosure of information by Secretary of State to court officer to help court decide whether to apply for benefit deductions etc) become Part 3A of the Schedule.

(3) Accordingly, after paragraph 9 insert—

“Part 3ADisclosure of information, and meaning of “relevant benefit” etc”.

(4) In the heading before paragraph 9A, after “Disclosure of information in connection with”, insert “making of attachment of earnings order or”.

(5) For paragraph 9A (power of Secretary of State to disclose information to help court decide whether to apply for benefit deductions) substitute—

“9A (1) The Secretary of State or a Northern Ireland department, or a person providing services to the Secretary of State or a Northern Ireland department, may disclose social security information to a relevant person.

(1A) Her Majesty’s Revenue and Customs, or a person providing services to the Commissioners for Her Majesty’s Revenue and Customs, may disclose finances information to a relevant person.

(1B) The disclosure authorised by sub-paragraph (1) or (1A) is disclosure of the information concerned for the purpose of facilitating the making, by the relevant court or a fines officer, of any of the following—

(a) a decision as to whether to make an attachment of earnings order in respect of P,

(b) a decision as to whether to make an application for benefit deductions in respect of P, and

(c) such an order or application.

(2) In this paragraph—

“finances information” means information which—

(a) is about a person’s income, gains or capital, and

(b) is held—

(i) by Her Majesty’s Revenue and Customs, or

(ii) by a person providing services to the Commissioners for Her Majesty’s Revenue and Customs in connection with the provision of those services,

or information which is held with information so held;

“social security information” means information which is held for the purposes of functions relating to social security—

(a) by the Secretary of State or a Northern Ireland Department, or

(b) by a person providing services to the Secretary of State, or a Northern Ireland Department, in connection with the provision of those services,

or information which is held with information so held.

(2A) The reference in sub-paragraph (2) to functions relating to social security includes a reference to functions relating to any of the matters listed in section 127(8) of the Welfare Reform Act 2012 (statutory payments and maternity allowances).

(3) In this paragraph “relevant person” means a person who is appointed by the Lord Chancellor under section 2(1) or provided under a contract made by virtue of section 2(4).”

(6) In paragraph 9B(1) (limits on onward disclosure)—

(a) for “9A(3)” substitute “9A”, and

(b) for the words after “making” substitute “, by the relevant court or a fines officer, of such a decision, order or application as is mentioned in paragraph 9A(1B).”

(7) In paragraph 9B(2)(b) (use of information otherwise than in connection with decision mentioned in sub-paragraph (1)) for “as is mentioned in that sub-paragraph” substitute “, order or application as is mentioned in paragraph 9A(1B)”.

(8) In paragraph 9B(3) (disclosures that are not unlawful)—

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(a) in paragraph (a) (disclosure in accordance with order of a court etc) after “order of a court” insert “or of a tribunal established by or under an Act”, and

(b) in paragraph (b) (disclosure of information previously lawfully disclosed) after “disclose” insert “or use—

(i) any information which is in the form of a summary or collection of information so framed as not to enable information relating to any particular person to be ascertained from it, or

(ii) ”.

(9) In paragraph 9B(5) (offence of wrongful use or disclosure of disclosed information punishable on summary conviction by a fine not exceeding level 4) for the words from “liable” to the end substitute “liable—

(a) on conviction on indictment—

(i) to imprisonment for a term not exceeding 2 years, or

(ii) to a fine, or

(iii) to both;

(b) on summary conviction—

(i) to imprisonment for a term not exceeding 12 months, or

(ii) to a fine not exceeding the statutory maximum, or

(iii) to both.”

(10) In paragraph 9B after sub-paragraph (5) insert—

“(6) Sub-paragraph (5)(b) applies in relation to offences committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (general limit on power of magistrates’ courts to impose imprisonment) as if the reference to 12 months were a reference to 6 months.

(7) A prosecution for an offence under sub-paragraph (2) may be instituted only by or with the consent of the Director of Public Prosecutions.”

(11) Omit paragraph 9C(2) and (4) (meaning of “benefit status” and “prescribed”).

(12) In paragraph 9C (interpretation etc of paragraphs 9A and 9B)—

(a) in sub-paragraph (1) for “This paragraph applies” substitute “Sub-paragraphs (3) and (3A) apply”, and

(b) after sub-paragraph (3) insert—

“(3A) “Relevant court” has the same meaning as in Part 3 of this Schedule.

(3B) In paragraphs 9A and 10 (as in the provisions of this Schedule which extend to England and Wales only)—

“fines officer” has the meaning given by section 36;

“P” has the meaning given by paragraph 1.”

(13) Paragraphs 9A, 9C and 10, as amended by the preceding provisions of this section, extend to Scotland and Northern Ireland (as well as to England and Wales).

(14) Accordingly, in section 111(1) of the Courts Act 2003 (subject to subsections (2) and (3), Act extends to England and Wales only) after “(3)” insert “and to section (Disclosure of information to facilitate collection of fines and other sums)(13) of the Crime and Courts Act 2013 (extent of paragraphs 9A, 9C and 10 of Schedule 5)”.”

Amendment 110 agreed.

Amendment 111

Moved by Baroness Meacher

111: After Clause 21, insert the following new Clause—

“Regulation of bailiffs

(1) The Secretary of State shall establish arrangements for the regulation of enforcement services and enforcement agents, as defined in Part 3 of the Tribunals, Courts and Enforcement Act 2007.

4 Dec 2012 : Column 637

(2) In establishing a regulatory system for enforcement services and agents, the Secretary of State shall, by order, make arrangements for the licensing and accreditation of companies whose activities involve judicial or quasi-judicial enforcement of debts, collection of fines and seizure and sale of goods.

(3) The Secretary of State may, by order, designate a person or body (“the Regulator”) to authorise persons to provide enforcement services, and regulate the conduct of such authorised persons and businesses.

(4) In carrying out functions as are conferred on the Regulator by or under this section, the Regulator shall—

(a) carry out inspections as it considers necessary of authorised persons holding licences or accredited under this section;

(b) provide for, or procure the provision of, training and accreditation;

(c) keep under review generally the activities of bailiffs and enforcement agents;

(d) establish an independent complaints system for debtors to use in cases where bailiffs and enforcement agents have abused their powers.”

Baroness Meacher: My Lords, Amendment 111 would introduce a new clause, Clause 22, to establish an independent regulator for enforcement services and enforcement agents—known to most of us as bailiffs.

The importance of this amendment lies in the enormity of the problem. For years, banks have used hard-sell techniques on the doorstep to foist loans onto vulnerable people, many of whom have no prospect at all of repaying that debt. Many others find themselves with debts that they can just about cover on condition that life carries on fairly calmly. But of course if crisis strikes—serious illness, disability or mental breakdown—the debts become unmanageable. And a third issue is now looming. Next year we will see the biggest cuts in welfare spending ever experienced in this country. Evidence from a small survey in Haringey suggests that the cumulative impact of the local housing allowance cap, the overall benefit cap and cuts in council tax benefit—just those three things alone—will cut the income of couples with two children by just over £108 per week, leaving such families with only £150 per week to cover food, fuel, clothes, transport and other necessities. They will not cope; it is quite simple. I am very grateful to the Zacchaeus 2000 Trust for those figures.

9 pm

In my view we are going to see an explosion of unmanageable debt in this country next year and the years following. Bailiffs will be worked off their feet; thousands and thousands more will have to be employed; and the misery of vulnerable people will increase from very high levels to heights that we have never known. We also know that if a bailiff becomes involved a £50 debt turns into a £125 debt, just from the issue of a liability order. That debt then doubles if the bailiff actually has to visit the home. Those who cannot pay their debt because they are sick, disabled or mentally ill suddenly find that debt growing when they have no control over the situation.

Our amendment seeks simply to ameliorate the suffering of people with unmanageable debts by requiring the licensing and accreditation of companies and the authorisation of individuals to undertake enforcement activities. It also requires the inspection of such services, the training of bailiffs and the provision of an independent

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complaints process. It is not really that unreasonable. Having spent some time close to these matters, and considering the job they do, I cannot think of any other group of employees in the country who probably more need to be regulated than bailiffs. We know that for decades inadequately trained, unsuitable people have knocked on the doors of the vulnerable, making unreasonable demands that people cannot deal with, threatening those people and then removing their meagre possessions. It is pretty tough stuff.

I welcome the Government’s consultation exercise and the impact assessment. The major question for this House is whether the Government’s preferred option will sufficiently protect vulnerable people from harassment and, in many cases, ongoing terror—leading to mental breakdown, hospitalisation and in some cases, and we know this to be true, suicide.

The first requirement of a regulatory system is that it must ensure that bailiffs are suitable people to do this sensitive work; that they can identify a vulnerable person when they see one; and that they know how to react if someone clearly needs help to deal with their financial and other problems. Very welcome is the Government’s decision that to do nothing is not an option—I really thank Ministers for that; at least that is something. Ministers want to balance the need to minimise the regulation of businesses with the need protect customers. I think that we are used to that position. They want to do this through an improved certification process. The question for your Lordships is whether the right balance can be struck within the certification process.

I put a number of concerns to the Minister at a meeting yesterday. Although I am grateful to the Minister for finding the time to meet me, I was deeply disappointed to find that the details of the certification system are in the very early stages of development. It is therefore impossible to judge how far the requirements of this amendment could be met through a robust certification process. To do this job properly we need to know what it is we are talking about. The fact is that we do not.

One important element is that these people will have to do a CRB check. But will this be an enhanced CRB check? If it is not then, frankly, it will not be much help. It should be an enhanced check. Perhaps the Minister can respond to that.

Another important element will be the need for the bailiff to prove that he has achieved the necessary competence to do the job. There are seven elements to the competence required in the Government's consultation document but only one refers to the business of identifying those with vulnerability and knowing what actions to take in that case. Dealing with vulnerable clients is surely the toughest part of the bailiff's job. Vulnerable people include people with learning difficulties, psychosis, depression, physical disabilities, single parents with small or disabled children, elderly people with a degree of dementia and so forth. What will the training tell an applicant about the vast range of problems they will encounter? How vulnerable does a debtor have to be in order to be considered vulnerable? I hope that the Minister can respond to these really important questions. Without such knowledge, the bailiff simply cannot do the job other than in an incredibly cruel way.

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Will those designing the training take account of the research done by the Royal College of Psychiatrists and the Money Advice Trust into debt collection and mental health? I shall take just one example of what they talk about. People are happy to talk about physical disability. They will tell someone who comes to the door, “I’ve got asthma” or “I’ve got a heart condition”, but the last thing you do is tell a stranger that you have a mental health problem. It is important that bailiffs are sensitive, thus enabling a person to disclose a mental health problem, otherwise the situation will soon get out of hand. What will enforcement officers be trained to do if they come across a vulnerable person? At the meeting the Minister gave me a reassurance about what would happen, and I would be grateful if he could give that assurance on the Floor of the House because it is important that we should know what happens when a bailiff comes across a vulnerable person.

Finally on the training issue, how long will the training take? If it is going to be two days, we know that it is not at all serious in terms of dealing with the issues I am covering. What about the personal specification for bailiffs? The Government will need to ensure that people with empathy are appointed to do this demanding job. They have to be tough, but they also have to understand. If I may put it bluntly, in the future the job will need to be done in an entirely different way. The debts of vulnerable people may have to be written off, and that should be done quickly rather than having people knocking on doors, or indeed knocking in doors, when they are dealing with an impossible situation.

Another matter of concern is the proposed approach to complaints. The consultation document refers to most enforcement agencies belonging either to the Civil Enforcement Association or the High Court Enforcement Officers Association. These bodies have codes of practice and in-house complaints processes. As we know, internal complaints procedures are pretty unsatisfactory unless they finish up with an independent appeal process. Can the Minister say whether the Government’s proposals will at the very least include an independent complaints appeal process? Also, what plans do the Government have for enforcement officers who do not belong to a trade association? What will happen about complaints made against those officers?

I note the proposals for the Bailiffs and Enforcement Agents Council to become the licensing body, possibly including the private parking industry in order to achieve economies of scale. I hope that the Minister will give the House the benefit of the Government’s thinking on these proposals because they could be quite interesting. This amendment does not prescribe the precise form that regulation should take because that is a matter for regulations and orders made under the Bill, but it does prescribe the necessary elements of independent regulation. We recognise that there are several options for undertaking the regulatory work, and the Financial Conduct Authority may be the preferred option. Others include direct regulation from within government with compliance functions outsourced to, for example, trading standards. That is a model which the Government may prefer.

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I believe that the elements set out in this proposed new clause are essential to any effective regulatory system for enforcement agents. Can the Minister explain to what extent he believes—I realise that it can be only a belief—the Government’s plans will include the necessary requirements to end the maltreatment of vulnerable householders? In particular, what will the certification process include by way of inspections, training and an independent complaints appeals process? I beg to move.

The Earl of Listowel: I rise to speak briefly because I am moved by what my noble friend has just said. No doubt the Minister will want to reassure her as far as possible, but of course we recognise that people will owe money and that that money needs to be reclaimed, if that is possible. I would appreciate some information about how these bailiffs are recruited and how they are trained. These are matters that my noble friend raised. In particular, what happens when there are children in the home? What responsibilities do these practitioners have in terms of families? What if the mother is pregnant or has a child aged under 12 months? Perhaps these are details that will be worked out further down the line, but I would certainly appreciate any information that the Minister can provide. I imagine the Minister has had opportunities to meet with the charities which serve these families and I would be interested to hear what discussions have been had in that regard.

I share the concerns of my noble friend Lady Meacher. She helpfully highlighted the impact of various factors, including the welfare cuts which will take place next year. I was speaking to the chief executive of Action for Children last week and, if I remember correctly what she said, she described a mother she had met who had been obliged to move out of central London because of the housing benefit cuts but wanted to keep her daughter in the school she was used to. So she travelled into London each day to take her daughter to school but then had to spend the rest of the day on the streets in London, with her young infant child, because she could not afford to make the journey home and then back out again.

There are real challenges to families in the current climate and I would appreciate all the reassurance and information that the Minister can provide so that, whatever is done here, any risk to families is minimised.

Lord Beecham: My Lords, this topic has a long history. It is five years since the Tribunals, Courts and Enforcement Act 2007 envisaged a code which would cover the powers of bailiffs, the fees they could charge and the processes they would be allowed to undertake. Part 3 of that Act contained the notion of a system of independent regulation—a phrase which we hear in another context at the present time. Subsequently, nothing much has happened. It is fair to say that the present Government, in January of this year, introduced some national standards, on a voluntary basis, to be adopted by local authorities and those working for them, presumably in connection with council tax and matters of that kind. However, beyond that, there has been very little.

When this House debated an amendment in my name in July, we were told by the Minister—again, the noble Baroness, Lady Northover—that, as we had already understood, the consultation period on the

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Government’s proposals in respect of Part 3 of the Act had ended on 14 May and we would receive the Government’s response by the autumn. I asked a subsequent Parliamentary Question in the autumn and was told that there would be a response in the autumn. Autumn is indeed a season of mists and mellow fruitfulness but we have, on the face of it, more mist than fruitfulness when it comes to an outcome of the Government’s deliberations. The Minister indicated that the response would be coming soon but we are now out of autumn and into winter—as the temperature in this Chamber clearly affirms—and we do not yet see the Government’s direction of travel. Having regard to the disappointment that I voiced over the last issue, I am not over-confident that we will get a resolution that will meet the requirements of the case.

In Committee, I cited a number of instances of what can only be described as appalling behaviour by bailiffs; I am referring to private bailiffs as opposed to the enforcement officers employed directly by the courts. I can update your Lordships’ House with a few more cases. One case involved a company which had a distress warrant and threatened that the defendant would go to prison. In another case, the same company was issued with a distress warrant and the defendant tried to make an arrangement to pay. The defendant received texts, notices through their door and, on one occasion, the bailiff banged on the door. The defendant and her partner were out and two children aged 6 to 8 and a 14-16 year-old were at home. They explained that their parents were out and the bailiff threatened these children that they would take all their possessions and toys and that their mother would go to prison if the monies were not paid.

9.15 pm

On another occasion, a woman whose daughter had a brain tumour and was constantly in and out of hospital was visited by the bailiffs. The mother would not answer the door because her daughter was in a bad state on that particular day. The bailiff spent some time kicking the door and returned a warrant to the court with the footnote, “Defendant very aggressive”. One might think that that was quite a projection on the part of the bailiff.

On another occasion, a private bailiff clamped the work van of a defendant, who was then told he would have to pay a lot of money to have it released. The bailiff said he would have it towed and sold to pay the civil car parking charges. The defendant took his tools and left the keys with the bailiff; the van was simply locked up and subsequently vandalised where it had been clamped.

Those are but three examples of some of the behaviour. Not all private bailiffs, of course, behave in this manner but sufficient of them do to raise very serious concerns. The concerns are not limited to misbehaviour of that kind. There is also the question of charges, to which the noble Baroness has referred. There is no national scale of fees for bailiffs enforcing magistrates’ court fines, and it has been reported that a £45 fine can give rise to charges of £300 or more. The question of charges arose in earlier debates this evening. Again, it is clear that this can be quite excessive in relation to the amount that is in issue.

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Citizens Advice has long raised problems with bailiffs. In 2011-12, it dealt with just under 25,000 inquiries involving problems with private bailiffs—25,000 problems in 52 weeks. By my calculation, that is 500 problems a week, or 100 per working day nationally. That is a very significant number but will not completely cover the extent of the problem by any means.

Citizens Advice has constantly raised problems about misrepresentation of powers, intimidating behaviour of the kind that I have described, excessive fees—sometimes in excess of what is allowable in law—failure to accept reasonable offers of payment, and failing to recognise debtors in vulnerable situations. These are almost exclusively the provenance of private bailiffs as opposed to county court bailiffs. However, there is also a concern that the Government’s policy is intended to encourage further use of private bailiffs as opposed to the direct employment of bailiffs by the courts, where these problems are very much less and virtually insignificant.

We really do need to hear from the Government about when they will come forward with recommendations. It must, surely, be imminent after all this time and I very much hope that we will have information within weeks rather than further months. If the noble Lord is in a position to outline what those are likely to be, can he also indicate how the matter will be progressed, and whether regulations will be brought for approval by Parliament or what process will be invoked? This has now gone on far too long. Far too many people are suffering and far too many irresponsible people seeking to collect money are behaving in an irresponsible fashion. This is, frankly, achieving the proportions of a scandal that we really have to deal with in the interests of the justice system, as well as of those directly affected by the malpractices of some of these private bailiffs.

Lord McNally: My Lords, I think that we all agree that the kind of issues raised by the noble Baroness, Lady Meacher, and the noble Lord, Lord Beecham, are of concern. The problem hitherto has been insufficient unanimity as to what should be done about bailiffs. It is vital that our proposals strike the right balance between providing effective enforcement and protection for the vulnerable in society, while not imposing unnecessary burdens on business. However, the Government have brought forward a significant programme of reform, focusing on addressing the power of bailiffs, the fees they charge, and better regulation.

I share noble Lords’ concerns about the inappropriate behaviour of some bailiffs and the unnecessary distress that this can cause to those who already find themselves in an often difficult and distressing situation. I assure the House that the Government remain committed to bringing forward effective proposals that protect the public by ensuring that bailiff action is proportionate. However, the need to protect debtors from the aggressive pursuit of their debt must be balanced against the need for effective enforcement. A workable means to enforce the payment of debts and fines is essential to both the economy and the justice system. Without assurance that it is possible, with due process, to recoup money from

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debtors unwilling to pay, it would be too risky for creditors to lend, and the effectiveness of the courts would diminish.

As the noble Baroness is aware, the Government launched a public consultation on bailiff reform in February this year, which set out proposals aimed at improving clarity so that both debtors and creditors know where they stand, strengthening protections for the vulnerable and ensuring that individuals can collect the money owed to them. Any regulation of bailiffs must comply with the general principles of regulation: it must be proportionate, accountable, consistent, transparent and targeted. While at its heart it must provide protection for consumers, it cannot do this by placing an undue burden on business. If we do not find this balance, we risk replacing one set of concerns with another.

As we indicated in the consultation paper, the Government’s preferred option is not to introduce an independent regulator. The Government’s response will address this in more detail, but we have received no new evidence to suggest that the creation of an independent regulator would be a proportionate response to the concerns that have been raised about the practice of some bailiffs. In addition, regulation costs money. Regulation would necessarily impose a cost on the enforcement sector and, as a result, the industry would recoup the cost through fees, with the risk of the cost being passed on to debtors.

The proposals set out in the consultation paper are intended to work as a package. Reforming the fee structure, addressing the powers of enforcement agents, tightening certification and introducing competence criteria and specific training will tackle the majority of abuses by rogue bailiffs. We need to make sure that the profession attracts the right people and that they can demonstrate they are fit to do the work, which will include providing a satisfactory CRB check and undertaking the necessary training. Bailiff standards must improve.

Since a bailiff on the doorstep may be the first time a person has had to face their financial situation, any training needs to cover not only what they can and cannot do but how to handle what could be very vulnerable people. It is important that they know how to assess the situation and decide which cases should be referred back to the creditor for their specific instructions on how the matter should proceed. That is the answer that the noble Baroness asked me to put on the record: where the bailiff faces a situation where they believe that they are dealing with a vulnerable person, they should refer back to reassess how matters should proceed. The consultation paper covered the issue of vulnerability and training, and I am working with Helen Grant MP, who has responsibility for these reforms, to ensure that full consideration is given to the level of CRB check, and the content, level and length of training a bailiff will need to undertake.

We are aware that reform in this area has been long and widely awaited. This subject attracts a great deal of interest and very diverse views. We have a responsibility to ensure that we have fully evaluated these views and taken them into account in our response. Many of the

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issues that have been raised today were either explored in the consultation or provided in a response. As I have explained, it is essential that our reforms maintain the value of enforcement while protecting those who find themselves in debt. This is a delicate balance and we need to make sure that we get it right.

The consultation response is being finalised and will be published in due course; I am afraid that that is as good as I can do on that. All that I can say in defence is that tomorrow we are having the Autumn Statement. I understand the impatience, which I share, and we will push ahead. In the mean time officials are working with all stakeholders to ensure improvements continue to be made in this area. Once the response has been published, we will work closely with stakeholders to deliver its recommendations. I hope that, having had the opportunity to raise the issue, the noble Baroness will be prepared to withdraw her amendment and await the Government’s proposals.

The Earl of Listowel: Before the Minister sits down, is it appropriate at Report to ask him one brief question? Does he expect pregnant women and mothers with children under the age of two to come within that criterion of vulnerability?

Lord McNally: I hesitate to respond to what is clearly a very emotive situation as laid out by the noble Earl, Lord Listowel. There is danger in all of these cases—and even the noble Lord, Lord Beecham, fell into it—of using illustrations in an emotive fashion. We are trying to get a balance. I suggest that what you are saying and the assurance that has just been given by the noble Baroness, Lady Meacher, come within some assessment of vulnerability which will require further guidance. This is not me laying down the law from the Dispatch Box. I am trying to make a common-sense assessment. I regret that I cannot start responding to various speculations in advance of the publication of the work that we have done.

Baroness Meacher: I thank the Minister for his response, but I have to say that it is deeply distressing that we are having this debate when we do not really know what we are talking about. We do not have even the response to the consultation. We do not know what the Government’s plans really are. We should be having significant amendments debated and completed at Report stage, yet we cannot do that.

Will the Minister make clear whether the consultation response, or indications about the key points in it, could be made available to us before Third Reading? That is one important point. Secondly, I hope to have a meeting with Helen Grant and obtain some information from her. I would like to reserve the right to bring something back at Third Reading, hopefully on the basis of some rather better information than we had today. As Lord Beecham said, I am aware of this matter going on for 20 years. I was involved in the bailiff issue 20 and indeed 30 years ago, when I worked at the CAB. It is not new. It is overdue and we are in grave danger of having too little too late. Will the Minister say whether he can produce some information before Third Reading.

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Lord McNally: My Lords, I can only say that I can in due course—in so many different ways, in due course.

Baroness Meacher: I have no option but to withdraw the amendment.

Amendment 111 withdrawn.

9.30 pm

Amendment 112

Moved by Lord Pannick

112: Before Clause 23, insert the following new Clause—

“Supreme Court security officers

(1) In Part 3 of the Constitutional Reform Act 2005 (the Supreme Court) after section 51 insert—

“Court security

51A Security officers

(1) A Supreme Court security officer is a person who is—

(a) appointed by the President of the Supreme Court under section 49(1) or provided under a contract, and

(b) designated by the President as a Supreme Court security officer.

(2) The President may give directions as to—

(a) training courses to be completed by Supreme Court security officers;

(b) conditions to be met before a person may be designated as a Supreme Court security officer.

(3) For the purposes of sections 51B to 51E, a Supreme Court security officer who is not readily identifiable as such (whether by means of uniform or badge or otherwise) is not to be regarded as acting in the execution of the officer’s duty.

(4) In those sections “court building” means any building—

(a) where the business of the Supreme Court, or of the Judicial Committee of the Privy Council, is carried on, and

(b) to which the public has access.

51B Powers of search, exclusion, removal and restraint

(1) A Supreme Court security officer acting in the execution of the officer’s duty may search—

(a) any person who is in, or seeking to enter, a court building, and

(b) any article in the possession of such a person.

(2) Subsection (1) does not authorise a Supreme Court security officer to require a person to remove any of the person’s clothing other than a coat, jacket, headgear, gloves or footwear.

(3) A Supreme Court security officer acting in the execution of the officer’s duty may exclude or remove from a court building, or a part of a court building, any person who refuses—

(a) to permit a search under subsection (1), or

(b) to surrender an article in the person’s possession when asked to do so under section 51C(1).

(4) A Supreme Court security officer acting in the execution of the officer’s duty may—

(a) restrain any person who is in a court building, or

(b) exclude or remove any person from a court building, or a part of a court building,

if it is reasonably necessary to do so for one of the purposes given in subsection (5).

(5) The purposes are—

(a) enabling business of the Supreme Court, or of the Judicial Committee of the Privy Council, to be carried on without interference or delay;

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(b) maintaining order;

(c) securing the safety of any person in the court building.

(6) A Supreme Court security officer acting in the execution of the officer’s duty may remove any person from a courtroom at the request of—

(a) a judge of the Supreme Court, or

(b) a member of the Judicial Committee of the Privy Council.

(7) The powers given by subsections (3), (4) and (6) include power to use reasonable force, where necessary.

51C Surrender, seizure and retention of knives and other articles

(1) If a Supreme Court security officer acting in the execution of the officer’s duty reasonably believes that an article in the possession of a person who is in, or seeking to enter, a court building ought to be surrendered on any of the grounds given in subsection (2), the officer must ask the person to surrender the article; and, if the person refuses to surrender the article, the officer may seize it.

(2) The grounds are that the article—

(a) may jeopardise the maintenance of order in the court building (or a part of it),

(b) may put the safety of any person in the court building at risk, or

(c) may be evidence of, or in relation to, an offence.

(3) Subject to subsection (4), a Supreme Court security officer may retain an article which was—

(a) surrendered in response to a request under subsection (1), or

(b) seized under that subsection,

until the time when the person who surrendered it, or from whom it was seized, is leaving the court building.

(4) If a Supreme Court security officer reasonably believes that the article may be evidence of, or in relation to, an offence, the officer may retain it until—

(a) the time when the person who surrendered it, or from whom it was seized, is leaving the court building, or

(b) the end of the permitted period,

whichever is the later.

(5) In subsection (4) “the permitted period” means such period, not exceeding 24 hours from the time the article was surrendered or seized, as will enable the Supreme Court security officer to draw the article to the attention of a constable.

(6) Subsections (3) to (5) do not apply where a knife is—

(a) surrendered to a Supreme Court security officer in response to a request under subsection (1), or

(b) seized by a Supreme Court security officer under that subsection,

but, instead, the knife must be retained in accordance with regulations under section 51D(3) unless returned or disposed of in accordance with those regulations or regulations under section 51D(1).

(7) If a Supreme Court security officer reasonably believes that a retained knife may be evidence of, or in relation to, an offence, nothing in subsection (6) prevents the officer retaining the knife for so long as necessary to enable the officer to draw it to the attention of a constable.

(8) In this section “knife” includes—

(a) a knife-blade, and

(b) any other article which—

(i) has a blade or is sharply pointed, and

(ii) is made or adapted for use for causing injury to the person.

51D Regulations about retention of knives and other articles

(1) The Lord Chancellor may by regulations make provision as to—

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(a) the provision to persons—

(i) by whom articles have been surrendered in response to a request under subsection (1) of section 51C, or

(ii) from whom articles have been seized under that subsection,

of written information about the powers of retention of Supreme Court security officers,

(b) the keeping of records about articles which have been so surrendered or seized,

(c) the period for which unclaimed articles have to be kept, and

(d) the disposal of unclaimed articles at the end of that period.

(2) In subsection (1) “unclaimed article” means an article—

(a) which has been retained under section 51C,

(b) which a person is entitled to have returned,

(c) which has not been returned, and

(d) whose return has not been requested by a person entitled to it.

(3) Without prejudice to the generality of subsection (1), the Lord Chancellor must by regulations make provision as to—

(a) the procedure to be followed when a knife is retained under section 51C;

(b) the making of requests by eligible persons for the return of knives so retained;

(c) the procedure to be followed when returning a knife pursuant to a request made in accordance with the regulations.

(4) In subsection (3)—

“eligible person”, in relation to a knife retained under section 51C, means—

(a) the person who surrendered the knife under subsection (1) of section 51C or from whom the knife was seized under that subsection, or

(b) any other person specified in regulations under subsection (3);

“knife” has the same meaning as in section 51C.

51E Assaulting and obstructing Supreme Court security officers

(1) Any person who assaults a Supreme Court security officer acting in the execution of the officer’s duty commits an offence.

(2) A person guilty of an offence under subsection (1) is liable on summary conviction—

(a) to imprisonment for a term not exceeding 12 months, or

(b) to a fine not exceeding level 5 on the standard scale, or

(c) to both.

(3) Subsection (2) applies—

(a) in England and Wales in relation to offences committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (general limit on magistrates’ court’s power to impose imprisonment), and

(b) in Northern Ireland,

as if the reference to 12 months were a reference to 6 months.

(4) A person who resists or wilfully obstructs a Supreme Court security officer acting in the execution of the officer’s duty commits an offence.

(5) A person guilty of an offence under subsection (4) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.”

(2) In section 48(3)(a) of the Constitutional Reform Act 2005 (delegation of President’s functions to chief executive) after “under section 49(1)” insert “or 51A(1)(a) or (b)”.”

4 Dec 2012 : Column 648

Lord Pannick: My Lords, Amendment 112 is in the names of the noble and learned Lord, Lord Phillips of Worth Matravers, and myself. The noble and learned Lord is abroad today and sends his apologies to the House.

The amendment seeks to give security officers at the United Kingdom Supreme Court the same powers as those available to court security officers in the other courts of England and Wales under Sections 52 to 57 of the Courts Act 2003. Those sections give court security officers statutory powers to search people, to exclude or remove people from court buildings or to restrain them in court buildings, and to seize, retain and dispose of offensive articles in court buildings. The provisions also create a criminal offence of assaulting or obstructing a court security officer.

There is at present a gap in the law because the Courts Act 2003 confers these powers only on staff appointed and then designated as security officers by the Lord Chancellor in relation to those courts where he is responsible for running an efficient and effective service. In the case of the Supreme Court, the Constitutional Reform Act 2005 vests in the president of the court the power to appoint staff, and the chief executive is under a duty to run an efficient and effective service. The powers conferred by the Courts Act are therefore not at present available to Supreme Court security officers.

Although, of course, Supreme Court security officers would hope never to have to use such powers, it is necessary for them, and for the judges, lawyers and members of the public they are protecting, to know that they have these vital powers at their disposal as security officers should the need arise. Unhappily, as we all know, there have been cases of such powers being needed in courts around the country.

I am sorry that your Lordships do not today have the advantage of hearing from the noble and learned Lord, Lord Phillips, the immediate past president of the Supreme Court, but I hope I have said enough to persuade noble Lords, and, in particular, the Minister that this amendment is necessary. I beg to move.

Lord Goldsmith: My Lords, I support this amendment. I understand that the Government may be in a position to say something favourable about it, so there is no need to say anything further, other than that the amendment may anticipate a little bit the debate that may take place on the next amendment about the importance of recognising the Supreme Court as an independent court no longer dependent on the Lord Chancellor.

Lord Carswell: My Lords, I support this amendment. For most of my 50 years in courts, this function was carried out by police officers who had the authority and the presence to be able to keep order. At times in my rather coloured career, that was necessary. At one time, we received intelligence that a gun was being smuggled into court to shoot either a witness or me or both of us. Happily, it did not arrive. The police presence was phased out, as it has been in other parts of the United Kingdom, and it has been necessary to appoint security officers. In my experience, they have

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never had to use these powers. They are needed because a lot more people attend the Supreme Court than used to attend the Appellate Committee upstairs or the Privy Council hearings. I support the amendment as one that it would be wise to have.

Lord Ahmad of Wimbledon: My Lords, this amendment concerns the security arrangements for the UK Supreme Court. As the noble Lord, Lord Pannick, has so elegantly explained, Amendment 112 would provide UK Supreme Court security officers with powers similar to those of court security officers appointed by the Lord Chancellor in accordance with the Courts Act 2003 in England and Wales and would address that gap.

The Government accept that UK Supreme Court security officers should have the same broad powers as court security officers in England and Wales, subject to appropriate safeguards, including in respect to training and security clearance. Having looked at the amendment, the Government are happy to commend it to the House.

Amendment 112 agreed.

Amendment 112A

Moved by Lord Pannick

112A: Before Clause 23, insert the following new Clause—

“Chief Executive of the Supreme Court of the United Kingdom

(1) The Constitutional Reform Act 2005 is amended as follows.

(2) For section 48(2) (chief executive), substitute—

“(2) The President of the Supreme Court shall appoint the Chief Executive in accordance with the arrangements for the time being in force for the selection of persons to be employed in the civil service of the State.”

(3) In section 49(2) (officers and staff), omit the words “with the agreement of the Lord Chancellor.””

Lord Pannick:My Lords, again, this amendment is tabled in the names of the noble and learned Lord, Lord Phillips of Worth Matravers, and myself. It raises two issues of fundamental importance concerning the independent status of the Supreme Court—that is, its independence from the Executive. The first issue is that it would make the president of the Supreme Court and not the Lord Chancellor responsible for appointing the chief executive of the Supreme Court. The current position is that Section 48(2) of the Constitutional Reform Act 2005 provides that:

“The Lord Chancellor must appoint the chief executive, after consulting the President of the Court”.

The process for the appointment of the first and current chief executive, Jenny Rowe, involved an ad-hoc commission chaired by a Civil Service commissioner and which included three of the then Law Lords along with a retired senior civil servant as the external member. The Ministry of Justice provided the commission with secretarial support and a firm of head-hunters was used to identify potential candidates. The amendment does not envisage any change in the substance of that process. It worked well and produced an appointee who is widely recognised as deserving much of the credit for the successful birth and early years of our

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Supreme Court. However, in principle this is an appointment which should be made by the president of the Supreme Court and not by the Lord Chancellor.

The power to appoint all the other officers and staff of the Supreme Court is already invested in the president of the court by Section 49(1) of the 2005 Act, even if, in practice, he delegates the exercise of this power to the chief executive. Section 48(4) of the 2005 Act says that the chief executive has to act under the direction of the president, so it is an anomaly that the power to appoint the chief executive is not also a matter for the president.

There is also an important question of principle: of course, the Supreme Court acts independently of the Executive, but it must also be seen to do so. Indeed, that was the major reason why the Supreme Court was created by the 2005 Act and why the Law Lords left this place. For the president of the Supreme Court to have the responsibility for appointing the chief executive would emphasise to all concerned that this is an independent institution.

The noble and learned Lord, Lord Phillips, has asked me to tell your Lordships that in his experience of the first three years of operation of the Supreme Court, the existing appointment provision led more than once to confusion in parts of the government machine that the chief executive should in some sense be acting at the behest of Ministers. The amendment is designed to put it beyond doubt that this is not the case. If the appointment power were to be vested in the president, there then arises the question why the Lord Chancellor should be consulted at all on this matter, particularly given that the chief executive is and would continue to be appointed in accordance with civil service recruitment rules, and the process is and would continue to be presided over by a Civil Service commissioner.

The Lord Chancellor is, of course, no longer a judge, and any role he might have in the process could only now be as a politician and government Minister.

I can tell your Lordships that the justices of the Supreme Court, including the noble and learned Lord, Lord Neuberger, the new president, simply do not understand how it can be constitutionally appropriate for the Lord Chancellor to exercise any such role. So the amendment would therefore confer responsibility on the president of the Supreme Court for appointment of the chief executive of that court, and would remove the role of the Lord Chancellor.

A second issue is raised by this amendment, arising from the terms of Section 49(2) of the Constitutional Reform Act 2005, which provides that the chief executive of the Supreme Court requires the consent of the Lord Chancellor when she decides on the number of officers and staff of the court, and the terms on which officers and staff are to be appointed. The noble and learned lord, Lord Phillips, has said publicly that he considers it critical to the court’s independence, and the perception of its independence, that the chief executive owes her primary loyalty to the president of the court and not to a Minister. The justices of the Supreme Court believe it would be preferable for the statutory provisions to be changed to make it even clearer that the chief executive has a direct accountability

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to Parliament for the proper use of the court’s resources and that she acts entirely independently from ministerial direction.

This is not just a matter of principle, important though the principle of independence is. The practical reality is that it makes no sense whatever for the chief executive to have to agree with the Lord Chancellor, which means of course his officials, on the number of officers and staff of the court. The justices of the Supreme Court are clear that neither the Lord Chancellor nor his officials can be in any position to second guess decisions that the chief executive makes in consultation with, and, if necessary—although the noble and learned Lord, Lord Phillips, assures me that it never came to that during his time—at the direction of the president, about the staffing requirements of the court.

In any event, the chief executive already has two separate disciplines upon her in making those staffing decisions—the budget that Parliament has decided to make available to the court, and the requirement on her as chief executive under Section 51(1) of the Act that the chief executive must ensure that the court’s resources,

“are used to provide an efficient and effective system to support the Court in carrying on its business”.

The amendment would therefore remove the need for the chief executive to seek the agreement of the Lord Chancellor to these matters, to make even clearer her direct accountability to the president on the one hand and to Parliament, if needs be via the Public Accounts Committee, on the other. I can tell your Lordships that the current president of the Supreme Court, the noble and learned lord, Lord Neuberger, supports this amendment on both of the matters that it covers: removal of the role of the Lord Chancellor in the appointment of the chief executive and in relation to staffing issues at the Supreme Court.

I understand that discussions are continuing on these important issues. I hope that the Minister will agree to consider these important issues further between now and Third Reading so that we can, if necessary, return to the matter then. I beg to move.

Lord Mayhew of Twysden: It seems almost trite to make the point that wherever you have a chain of command within an organisation, that chain of command should be clear and not muddled or uncertain. If you find that those defects are present, you are bound to get trouble sooner or later—and it will probably be sooner. In the case of the United Kingdom Supreme Court, it seems to me to be very important that there should be no such blemish in its constitutional arrangements, for the very reason that has been explained so powerfully to us this evening, and which the noble and learned Lord, Lord Phillips—with the support of all his brethren—would have been adopting, we understand, were he present. The whole point of the setting up of the Supreme Court is that it should be operationally squeaky clean of any contamination by the Executive. That was the point of moving it away from the Judicial Committee of your Lordships’ House, something that many of us regretted. If that is to be the case, however, then it is particularly important that there should be no capability of misunderstanding

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and resulting conflict—let alone litigation—arising out of an assertion that there is a dual chain of command here.

9.45 pm

It is not necessary to go into the statutory provisions of the 2005 Act, which have already been explained to us this evening. This amendment proposes that the Lord Chancellor shall no longer be the appointer, but the president, of the court. I suggest that that must be right, if one bears in mind the overriding importance of the operational independence of that court. I very much share the hope, expressed at the end of his speech, of the noble Lord, Lord Pannick, that as a result of their discussions the Government will come to the conclusion that this is an amendment which should in its substance be supported. If it is not possible for that to be achieved, then I very much hope that we shall have a very clear explanation why, and of what is thought to be achieved by a Government who insist on keeping the appointment in the hands of the Lord Chancellor—particularly when it falls to the chief executive, under the present constitutional arrangements, to appoint all the other officers and officials of the court. I very much support this amendment.

Lord Goldsmith: My Lords, I, too, support this amendment. The noble and learned Lord, Lord Mayhew of Twysden, has underlined what is critical on this amendment, which I very much hope the Government will consider. It is right that they will be considering this amendment between now and Third Reading.

There are two points. One is the practicality of the arrangements which the amendment proposes: they cannot be doubted. Arrangements for the appointment of the chief executive which include the president of our Supreme Court and the arrangements provided by the Civil Service rules seems to me undoubtedly to be a very proper way of proceeding. One cannot doubt that it will be effective. Certainly, the ad hoc way that the present chief executive was appointed was very successful. I had the privilege to have Miss Jenny Rowe working in my office for some time while I was Attorney-General; they could not have hoped for a better first chief executive.

So there can be no objection in principle by the Government to this proposal; and there is every reason in principle why they should want to see this amendment accepted. It is this worrying question of perception—is the Supreme Court really independent? I recall, in one of your Lordships’ committee rooms a long time ago, explaining to a group of Argentinian politicians, I think, how it came about that a decision had been made in relation to General Pinochet by the Judicial Committee of your Lordships’ House. I explained that the committee was entirely independent and that it was called a Judicial Committee, of professional judges, appointed to that role, who had no political affiliation. They nodded wisely and at the end of it all and said, “So why did the Government let it happen?”.

And that is the problem. If we have these apparent connections between Parliament, judges, the Lord Chancellor who is a serving Minister and now is really only a political Minister, and the court, people will think, “Ah, well, there must be some string-pulling

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going on”. We must remove all of those suggestions, and therefore I strongly support this amendment. I understand that it will not be moved to a vote this evening, but I very much hope that it will not be necessary to move it to a vote on a future occasion, because the Government will accept it.

Lord Bach: My Lords, in bringing up the rear, as it were, on this point, I will be very brief. I was the junior Minister with some responsibility for the Supreme Court while the building was being refurbished and finished. It was exciting to see noble and learned Lords in their hard hats going around the building as it was being refurbished. It has developed into an extraordinarily effective court which is a great credit to all those involved in it and is now a natural part of our constitutional settlement. I was also a Minister when the Supreme Court was actually opened. That, too, was an exciting time. I have a lasting interest in how the Supreme Court functions. I strongly support the amendment moved by the noble Lord, Lord Pannick, as it seems to me to go to an issue of independence. The independence of that court is of supreme importance, if I may use the expression. It is very important that the general public and the world outside understand that that court is at the very top of the British judicial system and is independent of the Executive in every way. That is why I support the amendment.

Lord Beecham: My Lords, I rise briefly to place on record the full support of the Opposition for this amendment. I hope that the Government will accept its spirit, if not the precise wording, today. It seems to set the final stone in the arch, as it were, of the construction of the Supreme Court. It clearly makes sense and I endorse entirely the observations of noble and learned Lords, the noble Lord, Lord Pannick, and my noble friend Lord Bach.

Lord Ahmad of Wimbledon: My Lords, I am minded of the fact that during the dinner break one of my noble friends remarked how cold the House had become given that we are in the winter months. I hope that some of my words may warm the temperature spiritually if not physically. Before I deal with the substance of what has been laid in front of us, I assure the House that Her Majesty’s Government fully and utterly respect the independence of the judiciary, and that there is no question of our duty to uphold that independence.

As the noble Lord, Lord Pannick, has alluded to, and as many noble Lords will recall, this House considered what are now Sections 48 to 50 of the Constitutional Reform Act 2005. Then, as now, the concern was how the court’s independence might be maintained following the Appellate Committee of the House of Lords transition into the UK Supreme Court. Several noble Lords have already made strong arguments as regards the current situation. I am not here to revisit arguments that have been raised historically. However, the Government retain a fundamental concern with regard to accountability and proper lines of accountability which need to be established so that the elected Government are responsible for the proper fiscal and managerial operation of the court.

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The noble Lord, Lord Pannick, my noble and learned friend Lord Mayhew and the noble and learned Lord, Lord Goldsmith, who was the Attorney-General, made very specific points about the challenges faced by the Lord Chancellor in appointing the chief executive, and the fact that a chief executive appointed by the Lord Chancellor has two masters in effect—one judicial and the other ministerial—and, as was argued, this breaches the principle of the separation of the Executive and the judiciary.

As I have said, the Government will listen to the arguments and have an open mind on the issue. As the noble Lord, Lord Pannick, alluded to, we are indeed engaging with the Supreme Court in order to consider the impact of this arrangement and of the amendment as tabled, and to resolve any concerns it may have about its independence and how this might best be preserved. However, it is our considered view that this constitutional change should not be rushed and that the Government and the Supreme Court should continue to discuss and consider together how any reform may be taken forward.

Reference has been made to Third Reading. I cannot at this time give an absolute concrete assurance from the Despatch Box, which I am sure noble Lords will appreciate, as to whether we will have concluded our consultation with the president of the Supreme Court, but these discussions are of course ongoing.

In lieu of these comments, I hope that the noble Lord, Lord Pannick, will be content to withdraw Amendment 112A on the understanding that this is a live issue which is being looked at, and which has been raised directly with the president of the court.

Lord Pannick: I am very grateful to the Minister. Of course, he gives no absolute concrete assurance, but I take from that that he gives a more qualified assurance that he will at least do his best to ensure that these important matters can be brought to a conclusion in time for Third Reading. It may be appropriate to seek to bring these matters back at that time, particularly as I do not understand the Minister to have identified any factor that can explain how it can be compatible with respect for the independence of the judiciary—which he says, and which of course I accept, the Government fully uphold—to maintain the constitutional provisions that this amendment seeks to remove.

The only factor to which the Minister referred that could come anywhere near providing any possible explanation was accountability. However, the whole point about the independence of the Supreme Court is that it is not accountable to Ministers; it is accountable to Parliament, of course, and it is answerable to Parliament in the sense that Parliament can override any decisions that the Supreme Court makes, and it is Parliament which decides on the resources that are provided to the Supreme Court in order that it can perform its function.

We have not heard any possible explanation of how these constitutional arrangements can be maintained consistently with the independence of the judiciary. I thank all noble Lords who have contributed to this debate. I will say to the Minister that I am sure that when and if it is necessary to bring this matter back before the House at Third Reading—I hope at an

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earlier time of day—there will be rather more noble Lords, and noble and learned Lords, who I am sure would wish to express similar views to those that the House has heard tonight. However, for now, I beg leave to withdraw this amendment.

Amendment 112A withdrawn.

Parliamentary Privilege

Message from the Commons

A message was brought from the Commons that they concur that it is expedient that a Joint Committee of Lords and Commons be appointed to consider the Green Paper on Parliamentary Privilege presented to both Houses on 26 April (Cm 8318), and that they have ordered:

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that a Select Committee of six Members be appointed to join with the Committee appointed by the Lords;

that the Committee should report by 25 April 2013; and

that the Committee shall have power

(i) to send for persons, papers and records,

(ii) to sit notwithstanding any adjournment of the House,

(iii) to report from time to time,

(iv) to appoint specialist advisers, and

(v) to adjourn from place to place within the United Kingdom.

House adjourned at 9.58 pm.