15 July 2013 : Column 521

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House of Lords

Monday, 15 July 2013.

2.30 pm

Prayers—read by the Lord Bishop of Norwich.

Introduction: Lord Livingston of Parkhead

2.38 pm

Ian Paul Livingston, Esquire, having been created Baron Livingston of Parkhead, of Parkhead in the City of Glasgow, was introduced and took the oath, supported by Lord Reid of Cardowan and Lord Green of Hurstpierpoint, and signed an undertaking to abide by the Code of Conduct.

Death of a Member: Lord Chitnis


2.43 pm

The Lord Speaker (Baroness D'Souza): My Lords, I regret to inform the House of the death of the noble Lord, Lord Chitnis, on 12 July. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.

Retail: Portas-plus Package


2.44 pm

Asked by Lord Naseby

To ask Her Majesty’s Government, further to the Answer by Baroness Hanham on 12 February (HL Deb, col. 557), what proposals they have to boost independent retailers in addition to the Portas-plus package.

Lord Naseby: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest in that a member of my family works in the retail trade.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, following the Portas review, we have lifted planning restrictions, doubled small business rate relief to help small shops, and provided communities across the country with a multimillion pound package of support so that they can drive new ideas for their local economy. Beyond the Portas pilots, the Government have invested millions through the High Street Innovation Fund and high street renewal awards. This is alongside more than £115 million of government funding to boost enterprise and initiate business start-ups.

Lord Naseby: Is the Minister aware that the Portas proposals and the extensions to them that she has just announced are enormously welcome to everybody in the retail trade? Nevertheless, two dimensions are hitting Britain’s high streets today. The first is low demand for the past two and a half years, which we all

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understand, because of the state of the economy and what we inherited in that dimension. The second, however, is business rates. Business rates have now reached the extent that they are the largest single overhead of any retailer, particularly the independent retailers. Against that background, can my noble friend confirm that there will be a commitment from the coalition Government to find a fairer way to tax both the high street and the online traders?

Baroness Hanham: My Lords, as the noble Lord will know, the Government have doubled the level of small business rate relief for the past three and a half years, and the higher level of relief will be available throughout the next year. Approximately half a million small businesses in England are estimated to benefit from that. We have also given authorities powers to grant their own business rate discounts, and central government is funding 50% of that. We have also reduced, and are reducing, corporation tax for larger businesses and corporate structures. Although I understand that concern is expressed by some about their business rates, I am not aware of any plans to change the system.

Lord Cotter: My Lords, pro rata to turnover, small shopkeepers provide more jobs than the big supermarkets do, although we are also seeing a great increase through mini-expresses and other means employed by the supermarket chains. It is welcome that the Government have come forward with schemes for business rates but those schemes lack a certain breadth and viability for many people. Will my noble friend look into the unfair situation whereby small shopkeepers frequently pay considerably more in business rates, based on turnover, than the big chains do?

Baroness Hanham: My Lords, I am not totally sure that they do. Business rates, as the noble Lord knows, are levied on the rate of rent paid so that, whatever happens, payments will be consistent. I am aware that there is concern about this, as I have acknowledged. However, I think that the Government feel at the moment that there is nothing to do to change that except to give small businesses the relief that I have already described.

Lord McKenzie of Luton: My Lords, the Question of the noble Lord, Lord Naseby, refers to “independent retailers”. Is that a distinction which is reflected in government policy, and what definition has been adopted?

Baroness Hanham: My Lords, I have accepted my noble friend’s interpretation. Independents, of course, are small retailers which, as the term suggests, are not part of a chain. On the other hand, small retailers may be part of a chain. It depends on the size of the business. To be clear, we are looking to ensure that small businesses can thrive in high streets. I have outlined the measures that we have taken to try to ensure that and to support them over the coming years.

Lord Phillips of Sudbury: Will my noble friend please take into account, when considering improvements to this already useful package, the fact that we are, in our times, seeing a decrease in the cohesion of local

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communities? Independent shopkeepers give character to town centres but also, more importantly, very often support local community activities in a way that the supermarkets totally fail to do. Will the Government take account not only of that but of the crazy disparity in tax payments between the little local shop on the high street and some of the big online retailers?

Baroness Hanham: My Lords, I totally agree with my noble friend that local, small and independent shops help provide community cohesion. There are many in my area which I know are very valued for the work that they do. One of the reasons why we are very anxious to see the high street flourish is that these independent traders are there, as well as others. After all, they are the centre of local communities, and they should be the generator. You meet people in the local butcher’s, and you meet people on the high street. They are also keen to take part. I fully accept that from my noble friend.

Baroness Farrington of Ribbleton: My Lords, will the Minister tell the House whether any government support or money is available for the conversion of space above high street shops to housing accommodation? There is a great demand for affordable housing in the centres of many of our towns and small cities. What are the Government doing to assist that?

Baroness Hanham: My Lords, as I indicated in my opening remarks, the Government have made changes to the planning regime which will enable local shops to become residences if that is a suitable change. I totally agree with the noble Baroness about the empty space above so many shops. Yes, we are very anxious to see those brought into use, and under permissive development they could be, but there are often structural reasons why they cannot, for example because they have no separate entrance. However, I take the noble Baroness’s point, which is very well made.

Medical Litigation: Impact on Medical Innovation


2.51 pm

Asked by Lord Saatchi

To ask Her Majesty’s Government what assessment they have made of the impact of medical litigation on medical innovation.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, it is the Department of Health’s view that no assessment is required as no changes are needed to the law or medical guidance in this area. The current system allows for doctors to initiate novel treatments provided that they are evidence-based, in the best interests of the patient, and with patient consent. While the law does not seek to block innovation, it does require new forms of treatment to be rigorously tested before being introduced.

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Lord Saatchi: My Lords, would my noble friend allow me to share the latest figures with your Lordships’ House? The number of lawsuits filed against the NHS last year was double the level of four years ago. Last year the payout of claims against the NHS was £1.2 billion. The current Treasury provision for likely payouts in the future for litigation against the NHS is now over £19 billion. Against that backdrop, is there not a danger that the growing fear of medical litigation leads to a growing bias against medical innovation? Will my noble friend consider the warnings of judges about the tendency of current law to inhibit medical progress? For example—

Noble Lords: Too long!

Lord Saatchi: I will shorten what I was going to say. Will my noble friend consider the warnings of judges, including that of the noble and learned Baroness, Lady Butler-Sloss, that under current law no innovative work—such as the use of penicillin, or performing heart transplant surgery—would ever be attempted?

Earl Howe: My Lords, naturally I share my noble friend’s concern about the level of litigation in the NHS. Having said that, I have seen no evidence that a particularly large or indeed significant element of that bill relates to medical innovation. We need to reflect that all treatments in routine use in the NHS today began as innovative treatments. We continue to support the introduction of new and innovative treatments in the NHS. I think that, if anything, doctors have more concerns about being reported to the General Medical Council than they do about being sued.

Lord Campbell-Savours: My Lords, is there not a danger that the requirement to publish the patient mortality rates of individual surgeons will act as a disincentive for surgeons to innovate and take risks in circumstances where patients themselves might want those surgeons to take a risk?

Earl Howe: There is indeed a danger that if the information that is published has not been carefully scrutinised to make sure that it is balanced and reflects faithfully the performance of the individual surgeon or the surgical team. I share the noble Lord’s concern that we should not just release information that has not been carefully examined in that sense, but there is a value, I suggest, to patients and clinicians themselves to have benchmarking metrics against which to judge performance.

Lord Walton of Detchant: My Lords, does the Minister agree that there is a longstanding Bolam judgment—which to the best of my knowledge is still active—to the effect that, in the management of a particular patient, a doctor is not negligent if he or she has acted in accordance with the views of a group of informed medical opinion? It does not have to be the majority medical opinion so long as the individual has acted in accordance with the views of a well recognised group of other doctors.

Earl Howe: I agree with the noble Lord, subject to one qualification, which was the judgment in Bolitho, which held that a doctor may be negligent even if there is a body of medical opinion in his favour.

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Lord Mawhinney: My Lords, by how much are litigation figures reduced by the intervention of mediators or arbitrators?

Earl Howe: I cannot give my noble friend a figure for that, but I can tell him that mediation and arbitration are increasing features in cases of this kind. We are very keen for that mechanism to grow, because the more that cases get into the hands of lawyers—I say this with great respect to noble Lords who are lawyers—the higher the bill to the NHS and the more distress there is to patients and families.

Baroness Wall of New Barnet: My Lords, I congratulate the noble Lord, Lord Saatchi, on linking these two important issues of innovation and litigation. I worry that the innovation that has become part of the Liverpool care pathway has had the reaction that it has. We understand today that there is going to be a cessation of that care pathway, because people are reporting being tarnished by it, whereas many patients have had great experiences and families’ involvement in that. It concerns me that we will either stop something because there is an issue about it or stop innovating.

Earl Howe: I share the noble Baroness’s concern, but at the same time I recognise that the noble Baroness, Lady Neuberger, and her expert group have done a very thorough job of work. It is now up to the Government and the whole medical community to consider and reflect on the conclusions that the noble Baroness has reached. One thing that she has said is that her decision is not a recommendation to move away from best practice in end-of-life care.

Lord Marks of Henley-on-Thames: My Lords, while of course we need to be cautious about encouraging a compensation culture, does my noble friend agree that medical litigation not only secures compensation for many who deserve it but does a great deal to maintain and improve medical standards in this country?

Earl Howe: My noble friend makes an extremely important point. Our policy is that it is right that NHS patients who are injured as a result of clinical negligence should be able to obtain correct and full compensation. Under the current system, compensation is in general paid only where legal liability can be established. The underlying principles are clear cut and enshrined in common law.

Lord Patel: My Lords, does the Minister agree that the only bar to surgeons introducing new surgical procedures is that they subject them to external audit to make sure that they do not harm patients?

Earl Howe: As far as I am aware, the noble Lord is absolutely right. That is a very important point.

Airports: Passenger Numbers


2.59 pm

Asked by Lord Clinton-Davis

To ask Her Majesty’s Government how many passengers used each of the United Kingdom’s main airports in May 2013; and how many in May 2012.

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Lord Clinton-Davis: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare that I am life president of BALPA.

Earl Attlee: My Lords, the noble Lord asks for a lot of data. The Civil Aviation Authority publishes monthly statistics on the number of passengers at each reporting airport. By way of example, passenger numbers at Heathrow exceeded 6 million in May this year, up 5% compared with May last year. At Gatwick, passenger numbers exceeded 3 million, up 8% from the same time last year.

Lord Clinton-Davis: I thank the noble Earl for that information. Does he agree that inordinate delay in selecting a new hub airport can only give Paris, Amsterdam and Frankfurt a real, perhaps decisive, advantage, which will be immensely difficult, if not impossible, to reverse? Why do the Government not recognise that, with improved access, Heathrow will provide a speedier answer than any other airport in existence today—one that would hugely benefit British aviation and our economy as a whole?

Earl Attlee: My Lords, I do not agree that there is inordinate delay. This is an extremely important decision. There is no right answer and when we find our solution we must have national consensus. The Airports Commission is the right way of determining the right answer and getting national consensus.

Lord Spicer: My Lords, how long will it take to complete the latest Boris Johnson wheeze?

Earl Attlee: My Lords, I am sure that the Airports Commission will take into account the practical difficulties and advantages of “Boris Island”.

Lord Foulkes of Cumnock: My Lords, does the Minister agree that there would be many more flights out of United Kingdom airports if air passenger duty was not so high? This is particularly the case for the Caribbean: the friends and family of people who live there are unable to go back to visit them because of the very high level of air passenger duty. A proposal has been put to the Department for Transport to change the level for to the Caribbean, but we have not yet had a response. Could the Minister say when that response will be forthcoming? I hope that he will give it sympathetic consideration.

Earl Attlee: My Lords, it is first important to understand that air passenger duty is essentially a revenue-raising tax—that is its purpose. It is not so much an environmental tax. APD is not a tax on international aviation fuel, which would be prohibited by the Chicago Convention. As I said, APD is a revenue-raising tax, which needs to be clear and simple and to ensure a fair contribution from the sector to public finances.

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Lord Bradshaw: My Lords, I wonder whether the noble Earl agrees that, in answer to the Question of the noble Lord, Lord Clinton-Davis, the key issue is how many people move from one aeroplane to another at airports; and to exclude from some of these large figures all the people who stop here for a period? That way, we can separate the number of interlining passengers from the destination passengers.

Earl Attlee: My Lords, as usual, my noble friend is on the money. The Airports Commission has access to the statisticians and data available at the Department for Transport to inform its research and decisions.

Baroness Scotland of Asthal: My Lords, I wonder whether the noble Earl would reconsider the answer he gave to my noble friend Lord Foulkes, when he said that air passenger duty is simply a revenue-raising tax? Is the noble Earl suggesting that Her Majesty’s Government do not take into account the severe impact that such a tax has on a region that is vulnerable and in need of help and support?

Earl Attlee: My Lords, the Government do consider the effect of APD. For instance, we have devolved APD to Northern Ireland because we faced competition from Dublin, which meant that the Belfast airports were getting into difficulties with the transatlantic trade. I understand the noble and learned Baroness’s point and that of the noble Lord, Lord Foulkes, about families wanting to go to the Caribbean, but I should also point out that there is quite a lot of holiday traffic to the Caribbean as well.

Lord Naseby: How can it be right that this tax is lower if you go all the way to Los Angeles than it is to get to the Caribbean? We do not have too many families going to Los Angeles on the lower rate but we have thousands who want to go to the Caribbean.

Earl Attlee: My Lords, as I tried somewhat clumsily to explain, we have to make sure that air passenger duty is not a tax on fuel. Therefore, we cannot tax per mile because, effectively, that would be a tax on fuel and we would fall foul of the Chicago Convention. It is, I accept, a fairly crude calculation and you can get peculiar results, as my noble friend suggests.

Lord Faulkner of Worcester: Can the Minister give an assurance that the claims of Birmingham Airport will be considered in the airport review, bearing in mind that it is the one airport in the country that has spare capacity; that there is not the degree of opposition to expansion and building new runways there that exists at Heathrow, Gatwick or Stansted; and that it will be less than an hour from London by high-speed train?

Earl Attlee: My Lords, I can assure the noble Lord that the Airports Commission will take into account the benefits of Birmingham Airport and, in particular, the arrival of HS2, because that will make a big difference. I am certain that that will be within its calculations.

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Lord Davies of Oldham: My Lords, the Minister must have noticed considerable activity by airport interests in putting their case before the public. When the Minister travels by Tube, as I am sure he does, in recent weeks he must have left this House and walked past advertisements raising that issue. What reply do the Government give to those important interests? Is it the same lame reply of long delays that we get in this House?

Earl Attlee: My Lords, I am confident that the Airports Commission is well able to see past an advertising campaign.

Digital Strategy


3.06 pm

Asked by Baroness Lane-Fox of Soho

To ask Her Majesty’s Government what plans they have following their digital strategy to enable adults to acquire the necessary skills to make use of digital services.

Baroness Lane-Fox of Soho: My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in so doing, declare an interest as chair of Go ON UK.

Lord Wallace of Saltaire: My Lords, we are setting up a cross-government team to lead and co-ordinate the Government’s work on digital inclusion. This will help offline adults and businesses to develop their digital skills. The team will work closely with Go ON UK, as the noble Baroness is well aware.

Design of assisted digital provision is in the early stages. This is how offline adults will access central government digital services. We are considering how to include an element of learning in that provision to encourage offline adults to use digital services independently in future.

Baroness Lane-Fox of Soho: My Lords, I thank the Minister for his Answer, and I commend the Government’s use of digital services. However, as he will be aware, all the data show that it is the lowest income households who have the most to gain from those services but are often the hardest to reach. I wonder what steps the Government are taking to ensure that this complex problem is addressed and that no one is left behind.

Lord Wallace of Saltaire: My Lords, I was visiting a large housing association in Bradford on Friday morning and was happy to learn that it provides for its tenants centres where people who do not have the skills can go to be helped to use the internet. That is very much part of what is in line. The noble Baroness will be aware that there is a joint DWP-DCLG scheme, which is working with the private sector to provide that for social landlords. That is one way in which one reaches one of the harder areas of the population which we must reach.

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Lord Clement-Jones: My Lords, as regards the Government’s digital strategy, the NAO has recently pointed out that there are slipping projections for superfast broadband to rural areas, a lack of competition and the need to change the procurement model. Are not these serious criticisms, and is not the plan not to implement the Digital Economy Act until 2015 another disappointment?

Lord Wallace of Saltaire: My Lords, I am something of an expert when it comes to which parts of the Yorkshire Dales National Park one cannot get mobile access. I am conscious that there are all sorts of contradictions in wanting to develop rural broadband, with national parks resisting having mobile phone masts put up all over them.

Some weeks ago, the Chief Secretary to the Treasury announced, as part of the Investing in Britain’s Future package, that there will be an additional £250 million match-funded to extend superfast broadband to such hard-to-reach areas.

Baroness Bakewell: My Lords, are the Government aware that more and more councils are going online? In fact, they are offering a bribe—a reduction for people who pay their bills online—thus penalising the millions of older people who are not willing or able to go online themselves. Surely the health cost of isolating more and more older people from the free running of society and their councils is something the Government should take into account.

Lord Wallace of Saltaire: My Lords, the Government very much take that into account. Incidentally, the statistics do not show that all older people are incapable of using digital services. The assisted digital scheme is precisely a means of helping people who do not find it easy to access the internet. They are given incentives to encourage them to ask their friends and others in care homes and elsewhere to help them to access the internet. I admit that the only government service that I have yet used online is renewing my driving licence. I understand that the most complex procedure that you can currently do entirely online is the enduring power of attorney, which I suspect one needs younger people to help with.

Baroness Wheatcroft: My Lords, instead of a subsidised TV licence or free television licence for the elderly, might not subsidised broadband be a good idea?

Lord Wallace of Saltaire: My Lords, I had better take that one away and think about it.

Lord Wright of Richmond: My Lords, is the Minister aware—I doubt whether he is yet—that one way to acquire digital skills is to have as many grandchildren as possible?

Lord Wallace of Saltaire: Yes. I have also discovered that one of the ways to go backwards in digital skills is for your son to emigrate. You cannot then ask him to help in the middle of the night.

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Lord Reid of Cardowan: My Lords, the disconcerting element of the Minister’s Answer to the noble Baroness in the first case was that this is at an early stage. We are now decades into the internet. We are at least a decade on from envisaging digital services. Whether it is a matter of the social justice of excluding people who cannot use this, of hygiene and security on the internet or, indeed, of the chronic shortage of skills that we have as regards cyber for the future, will the Minister reassure us that, while he may be at an early stage in this process, rapid progress will be made? I declare an interest as a twice-over grandfather.

Lord Wallace of Saltaire: My Lords, things are actually moving quite fast. This is not simply something that central government are attempting to impose. I am encouraged by how much is being done at the local level by voluntary organisations and by partnerships between the public and the private sectors. The assisted digital scheme is intended to pull a number of these together and make sure that they are encouraged to help precisely in those areas of the country where digital skills are least well developed. The speed at which people are moving over to digital as mobile smartphones expand is very rapid.

Lord Avebury: My Lords, I am sure my noble friend is aware that according to the Office for National Statistics, 3.8 million disabled people have never used the internet. How are those people going to claim universal credit when the applications have to be made online? If they all go to the centres that he mentioned, will they not be completely overwhelmed?

Lord Wallace of Saltaire: My Lords, that is precisely what the assisted digital and digital inclusion schemes are intended to deal with. They encourage people to learn how to use the internet themselves and, where they find it difficult to do so, to assist them and advise them on how to gain the access they need.

Lord Stevenson of Balmacara: In the last quarterly report of the GDS, the figure of 20% of the population needing some sort of assistance is quoted. I make that about 10 million people. Will the Minister comment on the fact that in the recent report on the rural broadband programme, the chairman of the Public Accounts Committee said that only 9 of 44 locally managed programmes are expected to meet the 90% superfast broadband coverage target? The programme now will not be delivered until March 2017—nearly two years late. What is plan B?

Lord Wallace of Saltaire: My Lords, things are actually changing very rapidly. I am fed up in Saltaire with the number of letters Virgin has put through my door telling me that it has now wired the entire village. The speed at which superfast broadband is being expanded is very rapid. This is not a matter simply for the Government. One of the things that worries me about the current statistics of where the Government need to catch up is that 60% of the population have shopped online and continue to shop online but less than 30% have accessed government services online. That is where we hope to catch up.

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Highway and Railway (Nationally Significant Infrastructure Project) Order 2013

Public Bodies (Abolition of BRB (Residuary) Limited) Order 2013

Motions to Approve

3.15 pm

Moved by Earl Attlee

That the draft order laid before the House on 15 and 16 May be approved.

Relevant documents: 3rd Report from the Secondary Legislation Scrutiny Committee, 2nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 10 July

Motions agreed.

Supply and Appropriation (Main Estimates) Bill

Supply and Appropriation (Main Estimates) Bill

Second Reading (and remaining stages)

3.15 pm

Moved by Lord Newby

That the Bill be read a second time.

Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.

Marriage (Same Sex Couples) Bill

Marriage (Same Sex Couples) Bill

Third Reading

3.16 pm

Baroness Anelay of St Johns: My Lords, this is a procedural matter, which is why I have leapt to my feet in advance of my noble friend Lady Stowell. I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Marriage (Same Sex Couples) Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Amendment 1

Moved by Baroness Stowell of Beeston

1: After Clause 15, insert the following new Clause—

“Survivor benefits under occupational pension schemes

(1) The Secretary of State must arrange for a review of the following matters relating to occupational pension schemes—

(a) relevant differences in survivor benefits;

(b) the costs, and other effects, of securing that relevant differences in survivor benefits are eliminated by the equalisation of survivor benefits.

(2) For the purposes of this section, each of the following are relevant differences in survivor benefits—

(a) differences between—

(i) same sex survivor benefits, and

(ii) opposite sex survivor benefits provided to widows;

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(b) differences between—

(i) same sex survivor benefits, and

(ii) opposite sex survivor benefits provided to widowers;

(c) differences between—

(i) opposite sex survivor benefits provided to widows, and

(ii) opposite sex survivor benefits provided to widowers.

(3) The review must, in particular, consider these issues—

(a) the extent to which same sex survivor benefits are provided in reliance on paragraph 18 of Schedule 9 to the Equality Act 2010;

(b) the extent to which—

(i) same sex survivor benefits, and

(ii) opposite sex survivor benefits,

are calculated by reference to different periods of pensionable service.

(4) The arrangements made by the Secretary of State must provide for the person or persons conducting the review to consult such other persons as the Secretary of State considers appropriate.

(5) The Secretary of State must arrange for a report on the outcome of the review to be produced and published before 1 July 2014.

(6) If the Secretary of State, having considered the outcome of the review, thinks that the law of England and Wales and Scotland should be changed for the purpose of eliminating or reducing relevant differences in survivor benefits, the Secretary of State may, by order, make such provision as the Secretary of State considers appropriate for that purpose.

(7) An order under subsection (6) may amend—

(a) England and Wales legislation;

(b) Scottish legislation.

(8) In this section—

“occupational pension scheme” has the same meaning as in the Pension Schemes Act 1993 (see section 1 of that Act);

“opposite sex survivor benefits” means survivor benefits provided to surviving spouses of marriages of opposite sex couples;

“same sex survivor benefits” means survivor benefits provided to—

(a) surviving civil partners, and

(b) surviving spouses of marriages of same sex couples;

“survivor benefits” means survivor benefits provided under occupational pension schemes.”

Baroness Stowell of Beeston: My Lords, I will speak also to Amendments 2 to 5, on the subject of occupational pension benefits. I am grateful to my noble friend Lord Lester, the noble Lord, Lord Alli, and the noble Baroness, Lady Royall, for adding their names to this group of amendments.

The Government have listened carefully and understand the concern that has been expressed that same-sex married couples will be in a different position from opposite-sex married couples as regards occupational pension benefits. The effect of the difference in treatment, which is permitted under the exception in Schedule 9 to the Equality Act 2010, is that currently civil partners and, by virtue of the provision made in Schedule 4 to this Bill, people married to someone of the same sex may not benefit from their civil partner or spouse’s pensionable service prior to 2005 in respect of any survivor benefit payable on the death of their civil partner or spouse.

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We discussed this issue at some length in Committee and on Report, when we had a full debate on Amendments 84 and 84A, tabled by the noble Lord, Lord Alli. I am grateful to him and other noble Lords for highlighting this important issue and for engaging in constructive discussions during the passage of the Bill, which have led us to bring forward this group of amendments.

I will begin by making clear that we are talking here about which period during which contributions were actually made to a pension scheme will be taken into account when calculating survivor benefits on the death of the pension scheme member. Therefore, this issue does not affect people whose pensionable service began in 2005 or later. For those whose pensionable service began prior to 2005, the concern is that contributions that they have made will not benefit their partner on their death. I should also make clear that if the Government were confident that equalising these benefits was straightforward and sustainable, we would be happy to support a move towards equalisation. But as a matter of principle, and as I have explained previously, successive Governments have avoided imposing retrospective costs on pension schemes, particularly private sector pension schemes, which have not been taken into consideration in their funding assumptions.

It would be irresponsible of any Government to commit themselves to imposing potentially significant costs on businesses and the taxpayer without first undertaking an assessment of all the implications and knock-on effects, and assessing the scale of the costs involved. This group of amendments therefore requires the Government to arrange a review of the differences in survivor benefits in occupational pension schemes between opposite-sex couples and same-sex couples in legal relationships, both marriage and civil partnership. It will look at the issue in the round and will include looking specifically at the effect of eliminating differences in treatment because of sexual orientation in terms of survivor benefits between people married to someone of the opposite sex and people married to someone of the same sex. I can therefore assure the House that the review will include an exploration of the issue which is the focus of the concern of the noble Lord, Lord Alli.

As I have said, we must also look at the full costs and implications of any change. This means looking at the effect of equalisation across the board, because any changes made for one group could have significant wider implications. The review will therefore also consider the differences in treatment between widows and widowers of marriages of opposite-sex couples and the impact of removing the current exception permitting these gender-based differences of treatment provided by Section 67 of the Equality Act. It is important to emphasise, however, that these existing gender-based differences in treatment for widows and widowers in relation to survivor benefits arise from changes that have been made over time as a result of societal change. These longstanding differences reflect the historical fact that in the past many women were not economically active and relied on their husbands for their pension. These differences are therefore not consequences of the measures in the Bill, but it is important that the review considers all the interdependencies between the arrangements for different groups in occupational pension schemes in the round.

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It is also important that interested parties are consulted and that all relevant voices are heard. The review will also therefore include consultation with those interested parties that the Secretary of State considers appropriate. This point was raised by my noble friend Lord Higgins. I can assure him and the House that consultation will include, for example, pension scheme trustees and industry bodies, as well as organisations representing the interests of lesbian and gay employees.

Following this comprehensive review, the amendments require the Secretary of State to publish a report of the outcome before 1 July 2014. The amendment also includes an order-making power. This ensures that if on consideration of the outcome of the review the Secretary of State thinks that the law needs to be changed in order to reduce or eliminate differences between survivor benefits, this can be achieved through secondary legislation, subject to the affirmative procedure.

I hope that these amendments reassure the House that we have listened to the strength of feeling on this issue and have responded in good faith with a sensible and measured way forward. The Government’s amendments will ensure that if we were to make any changes to the existing arrangements for differences in survivor benefits we would do so with an understanding of the full implications of such changes and of the potential costs both to schemes and to the taxpayer. I beg to move.

Lord Alli: My Lords, I thank the Minister and my noble friend Lady Royall of Blaisdon for making this amendment possible. I am glad that the Government will re-look at this issue and that if they can they will change the law.

This is also my last opportunity to speak on the Bill. I want to say thank you not just to the Front Benches on both sides of the House but to the House. I have been truly humbled to have been part of the Bill in this place. This week will mark the 15th anniversary of my entry into your Lordships’ House. As a gay man, over those 15 years you have changed my life. You have given me dignity where there was sometimes fear, you have given me hope where there was often darkness and you have given me equality where there was sometimes prejudice. Those who want radically to reform this place come with their plans. Let me say this to them: witness this day; witness this Bill; judge us on the creation of the liberties that we protect and extend.

This is a special place and I am proud to have figured in it. My life and the lives of many others will be better today than they were yesterday, and I thank the House for that.

Lord Lester of Herne Hill: My Lords, I am glad that I put my name to these amendments. I add my support to the Minister for the wisdom of the amendments. It is an open-ended consultation that is not prejudged, it is time-limited so there will not be undue delay, and if there are changes it will be subject to affirmative procedure, which means that Parliament will be able to be properly consulted, as the public and all the interested groups will have been.

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To add a further point, if change is brought about it will avoid the need for further litigation that could finish up in the European Court of Human Rights, as I read its case law, because if there is to be change it will remove a source of discrimination that, it could be strongly argued, is not compatible with convention rights. For all those reasons, I am very glad to support this.

The noble Lord, Lord Alli, has described me in the past as a lone ranger, but I was not sure that that was a compliment. I sit among my Liberal Democrat tribe not as a lone ranger; we are full of support for that team. I should say, though others will also say it from these Benches, that we are very proud of the fact that we were the first to think of civil partnership, to do civil partnership in a Private Member’s Bill and then to support the admirable Equality Act, so I do not think that I am a lone ranger. Anyhow, I do not watch cowboy films because I am too frightened of what will happen to the horses of the Indians.

I join in the tributes to the Minister and her extremely skilled team. Part of that team was responsible for the Equality Act 2010, which I have described as the best civil rights legislation in the world, and that I believe to be the case. The Minister has had to deal with the Bill in difficult circumstances; there are some in the House who are strongly opposed to it. However, the way in which amendments have been considered and debated across the House honestly and transparently has been extremely important, and I have learnt a great deal from listening to those debates.

I joined the House 20 years ago and I can tell those who are a bit younger that it would have been quite inconceivable for the House to have been able to approve this measure then. It would have been fairly impossible 15 years ago. What has changed for the better has been the modernisation of this House through appointments, and I pay tribute to the previous Government for the appointments that they made that I think have secured a House that is truly countermajoritarian and truly concerned with individual rights and with protecting minorities against the abuse of powers by the tyranny of the majority.

Lord Rowlands: My Lords, I rise to make a brief contribution—my one and only contribution to the Bill—because listening to the debates and reading the correspondence has brought vivid memories back to me of voting at 4.27 am, 46 years ago this month, by 99 votes to 14 for Mr Leo Abse’s Sexual Offences Act decriminalising homosexuality. I was a 27 year-old Member of Parliament who had only been elected the year before, totally unexpectedly so because I was not expected to win a Conservative stronghold. That brief political experience did not prepare me for the vehemence of the reaction to my stance in that year. I have never since come across anything quite like the level of abuse and vehemence that I received in certain quarters of the constituency because of my support for that Bill. How could I possibly legitimise such horrid, heinous and sinful practices? The church, at that time, took rather a curious position on the Bill. It kind of supported it because it could help in the mission to save the sinful souls of homosexuals. The Bishop of London of the time said that it would allow,

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“the reformation and recovery … of those who have become the victims of homosexual practices”.—[

Official Report

, 13/7/67; col. 1291.]

I do not know how well that mission has succeeded since.

3.30 pm

I have alluded to this past experience for two reasons. First, I have been impressed and pleased by how much more measured, more sensible and more mature a debate we have had this time on such sensitive issues as opposed to way back in 1967. It shows that society itself has matured and, I believe, become more capable of handling such issues in a sensitive and helpful manner. Nevertheless, passions and fears have been aroused by the Bill. Therefore, the second reason why I have referred to this past experience is that, in such situations, I have always found that a bit of historical perspective is helpful. Has anyone ever tried to repeal that heinous, horrible Bill of 1967? No. Did all the dire consequences, which my constituents at that time said would happen to society if we supported the Bill, come to pass? I do not think so. Therefore, I believe that, with the passage of time, we will also find with this Bill that some of the fears that have been expressed will prove unfounded, as they were after 1967.

In my personal relations, I am as old fashioned and strait laced as can be. I had a 35-year marriage to one woman until death did us part, so I have had the experience and joy of a long and happy marriage. I do not believe that I should deprive gay people of that same opportunity. It is about equality before the law. As I said, the vote to which I referred earlier took place at the uncivilised time of 4.27 am. We can support the Third Reading of this Bill at a civilised time because the Bill itself is civilising.

Lord Higgins: My Lords, I join other noble Lords in congratulating my noble friend the Minister on the Front Bench on the way in which she has handled this Bill throughout. Indeed, I join all those who expressed appreciation to the noble Lord, Lord Alli, and others who have carried on the debate in such an eloquent and satisfactory manner. I am particularly grateful to the Minister for saying that the review will take into account the position of pension fund trustees and other beneficiaries in ensuring that equality is maintained. I would ask particularly whether the position will be protected so that those in a same-sex marriage do not gain access to a closed pension scheme in a way that would prevent members of the company’s other scheme entering it. Perhaps that point might be taken into account by the review. Can my noble friend say what the composition of the review is to be? I am at rather a loss to understand what interests of Her Majesty are involved in this; that came straight out of the blue. Can my noble friend clarify that particular point?

Finally, I am glad that the order resulting from this review is to be subject to a resolution so that the House will be able to debate the result of the review without having to resort to a prayer. Overall, I think that we have made significant progress. I still have grave reservations about the position of registrars and so on, which I understand was a whipped vote on the

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other side. In any event, on this particular aspect of the Bill, the Minister has certainly done an excellent job and I am very grateful to her.

The Lord Bishop of Norwich: My Lords, I support this group of amendments. A review of the benefits accruing to all survivors under occupational pension schemes is both desirable and necessary. The principle of equity under the law for those whom the law holds to have the same status in relation to the deceased is a sound one. Hard-pressed pension schemes must be tempted to limit benefits, and the complexity of some schemes may hide inequity, so this principle is clear and just and I support it. Indeed, the Church of England pension scheme already treats surviving civil partners in precisely the same way as widows and widowers.

There is a wider reason for supporting these amendments. It is no secret that the majority of Christian churches and other world faiths do not believe that same-sex marriage accords with their understanding of marriage itself. However, many of us, including on these Benches, welcome the social and legal recognition of same-sex partnerships and believe that our society is a better and healthier one for such recognition. That is why I support this group of amendments. This point has sometimes been obscured in public commentary on what has been taking place here, but not in the debates in your Lordships’ House. The courtesy and clarity with which your Lordships have listened to each other represent our very best traditions, and I echo all that has already been said in this brief debate.

I, too, thank the Minister for her work and the Government for accommodating the needs of the Church of England and other faith traditions, and for wanting to do so. That has also been a characteristic of this House as the Bill has been debated. While the Bill is necessarily complex as a result of meeting many needs—and we are making it a bit more complex again—it will serve very well both its supporters and those who are still unconvinced about it, and that is a signal achievement.

Baroness Royall of Blaisdon: My Lords, I was very pleased to add my name to this group of amendments. I thank the Government for listening and recognising that action should be taken in order to get rid of this last inequality, which in my view is an anomaly. However, it is of course right that consultation, a review and an assessment should be undertaken before any final action is taken. I especially thank the Minister, who steered through the discussions on the compromise with her usual aplomb, skill and understanding. I am glad that we can all agree that this is the best way forward.

Lord Elton: Before the noble Baroness sits down, since there is no opportunity for a Back-Bencher to join in after that, and she sprang rather quickly to her feet, I wish to say that I welcomed the attempt to produce equality in this aspect of the Bill at each stage and that I am particularly glad to support it now. Perhaps it is best to pass over the rest of the debate we have heard.

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Baroness Stowell of Beeston: My Lords, I am very grateful to all noble Lords who have spoken in this debate and for their support for these amendments. I will respond to some of the questions that were put by my noble friend Lord Higgins. He asked whether those who are currently excluded from a defined benefit scheme would not get access to such a scheme to a greater advancement than anyone else as a result of this review. I can assure him that that is not the case. The purpose of the review is purely to look at the contributions that people made before 2005. The noble Lord asked about the composition of the review. We will publish terms of reference in due course, and at that time we will be able to offer a little more detail.

As to the role of Her Majesty the Queen and the comments of my noble friend Lady Anelay before I moved Third Reading, I do not have a comprehensive response to that question except to say that that was just a formality that is sometimes necessary on the government Chief Whip’s part before a Bill passes on to the Commons. It is all to do with various, specific interests that Her Majesty may have in a piece of legislation. In no way does it pre-empt proper process or the granting of Royal Assent. It is a pure formality and there is nothing unusual in it.

I will respond more broadly to this debate and to those that we have had on the Bill in your Lordships’ House over the past few weeks. At Second Reading, I urged the House to ensure that the protections that allow the church and other faiths to maintain their legitimate belief that marriage is only between a man and a woman should work properly. I also said that this House should debate and scrutinise whether the Bill protects freedom of speech. Your Lordships have done that, and I am grateful to all who have contributed. Those of us who have supported the Bill in principle, and those who have been concerned about protections for those who did not, have together made this an even better Bill.

While the amendments we have made were all tabled by the Government, they have all been inspired by your Lordships and by the debates we have had in this House or through the work done in its committees, particularly the Delegated Powers and Regulatory Reform Committee. During the passage of the Bill through both Houses, the Government have made 23 substantial amendments, 17 of them while the Bill has been in this House. The most significant include the reviews to which we are committed—on civil partnerships, humanist marriages and the equalisation of survivor benefits for same-sex and opposite-sex married couples—as well as the amendment to the Public Order Act, which is a significant protection for freedom of speech.

We have also made amendments on religious protections, in particular one that clarifies the word “compel” in Clause 2. Religious faiths, notably the Catholic Church and others who are neither the Church of England nor the Church in Wales, and who did not wish to opt in to marrying same-sex couples, wanted us to strengthen further the clause in the Bill that states that a person may not be compelled to conduct a marriage of a same-sex couple. This matter was also debated in the Commons and the movers of the amendment there were defeated by 321 votes to 163.

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Even though the will of the Commons was clear on this point, the Government said that they remained open-minded and would continue to listen. We did so, and were persuaded to come forward with our own amendment on Report. The Bill is now clearer, and says:

“A person may not be compelled by any means (including by the enforcement of a contract or a statutory or other legal requirement)”.

I was pleased that the noble Lord, Lord Brennan, whom noble Lords will remember was critical of the Bill at Second Reading, commended the amendment, saying that it dealt with concerns about public functions comprehensively. He said:

“I cannot remember seeing in a statute—certainly not in one of this kind—the words ‘by any means’. That is an all-embracing, protective phrase and I commend the Government doubly for such a courageous use of language to achieve one of the protections that they said they wanted to achieve: institutional independence”.—[Official Report, 8/7/13; col. 105.]

Lord Higgins: I am sorry to interrupt, but is it not the case that registrars will effectively be compelled, even if they have conscientious objections, to marry same-sex couples?

Baroness Stowell of Beeston: The amendments to which I am referring concern religious protection. The point that was made during our debate on registrars was that they are public servants, carrying out a public function, and are therefore not in the same position as people of faith as to the requirements if they are conducting a marriage in their own church. They are employed to do a job as public servants.

Our debates have provided evidence to support something else I said at Second Reading. It is possible for us to allow in law something that not everyone agrees with, and to respect our differences of view. In particular, I note the comments of the noble Lord, Lord Rowlands, about the contrast between our debates and those of the past on previous gay rights legislation. I note, too, what the right reverend Prelate the Bishop of Norwich said when he paid tribute to the way in which we have debated the Bill in your Lordships’ House.

3.45 pm

I thank everyone who contributed to our debates during the Bill’s various stages, whatever arguments they advanced. The fact that we have debated and scrutinised the Bill carefully is what matters. I am particularly grateful to the range of colleagues on my Conservative Back Benches who have provided me with much guidance and wise counsel. There are too many of them to mention. Noble Lords should not be fooled by the lack of pink carnations on my Benches.

I hope that the House will indulge me in putting on record—not to make a party-political point but to record an important fact—that in five out of six Divisions in your Lordships’ House, more Conservative Peers voted in support of the Bill than against it. I am aware that that did not happen—my Benches were evenly split—in the Division on registrars that my noble friend Lord Higgins has just mentioned. I am

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hugely proud of and grateful for that. We do not go in for emblems on these Benches, but many of us on this side of the House very much support the Bill. I pay particular tribute to one of my noble friends for helping me so much over the past few weeks. Without her support, my job would have been so much harder. She is my noble friend Lady Noakes.

As always, I have enjoyed working closely with my noble and learned friend Lord Wallace of Tankerness, and with my noble friend Lady Northover. All of us on the Front Bench have enjoyed fantastic support from a brilliant team of officials. I cannot name them all, but I mention in particular Melanie Field, Suki Lehrer, Wally Ford and Philip Bland. I will also give a shout-out to the special advisers who worked so hard in supporting us in this House. I will not say their names, but they know who they are.

I thank noble Lords from all four quarters of this Chamber who played a pivotal role in the passage of the Bill, in particular the right reverend Prelate the Bishop of Leicester, who is not in his place, and my noble friends Lady Barker and Lord Lester on the Lib Dem Benches. I was very pleased that my noble friend Lord Lester contributed to the debate and reminded noble Lords how much he has done to advance civil rights over many decades. I pay tribute to many noble Lords on the Cross Benches, including the noble Lord, Lord Pannick. Also, while we have been on opposing sides, I pay tribute to the noble Lord, Lord Dear, and his colleagues for their commitment to their cause.

Finally, I pay tribute to the Labour Benches. It is often said that politicians should try harder to work together for the greater good. On this important, historic piece of legislation, I am proud to say that that is what the government and the opposition Front Benches did. It has been a real pleasure over the past few months to work with the noble Baronesses, Lady Royall and Lady Thornton. It was characteristic of the noble Baroness to pay me such a generous tribute, and I am grateful to her. I have great respect for both noble Baronesses and will always be hugely grateful to them for their full support during the passage of the Bill. Although we will not agree to the same extent on all legislation that comes before the House in future, through the Bill I believe that we have strengthened our mutual understanding and personal trust. I am sure that that will be of great benefit to the work of the House.

I cannot pay tribute to the Labour Benches without mentioning the noble Lord, Lord Alli, who today gave a very moving speech. The other day, in a meeting with me, he declared in frustration at one point when I was disagreeing with him about a request he was putting forward, “But I am a gay rights campaigner”. Never was a truer word said, and, based on his record of achievements, he is undoubtedly one of the—if not the—very best. He has been a very active participant in the passage of the Bill and I am grateful to him.

Unlike the noble Lord, Lord Alli, I cannot claim to be a gay rights campaigner, but I am a firm believer in justice and fairness. My belief comes from two guiding principles that my parents taught me: that you are as good as anyone who thinks that they are better than

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you, and that you should always stand up for anyone who is treated worse than everyone else. Therefore, it has been a privilege to be part of a Bill that puts right something that is wrong: namely, the exclusion of same-sex couples from the institution of marriage. I am delighted that, very soon, it will be possible for gay couples to marry. They will be able to affirm publicly their commitment to each other, and accept all the responsibility and joy that comes with it, just like any other couple.

I say to any noble Lord who remains concerned that some gay couples will not take seriously the responsibility of marriage that it is likely that some will not. However, they will be no bigger in number than the small minority of straight couples who sadly end up disappointing each other and their families. Most importantly, we should celebrate and congratulate every gay couple who embarks on this special enterprise of shared endeavour in exactly the same way as we do straight couples, wishing them a long and happy life together, but knowing that that requires effort as well as the love and support of family and friends. As for me, I shall continue to wait for George Clooney before I give it a go myself.

I am very grateful to the many noble Lords who have paid tribute to my right honourable friend the Prime Minister for his leadership in bringing forward this important piece of legislation. I do not think it is presumptuous for me to say on his behalf how grateful this coalition Government are for the support and challenge we have received from the Labour Front and Back Benches, the Cross Benches, the Bishops’ Benches and my noble friends on both the Lib Dem and Conservative Back Benches.

As I said at Second Reading, the Bill is a force for good. It remains that and I am delighted to be sending it back to my right honourable friend the Secretary of State Maria Miller, scrutinised and improved yet further by the House of Lords. I hope very much that the other place accepts all the amendments we have made and that it soon receives Royal Assent and becomes a great Act for good by this Parliament.

Amendment 1 agreed.

Clause 17 : Orders and regulations

Amendment 2

Moved by Baroness Stowell of Beeston

2: Clause 17, page 14, line 26, at end insert—

“( ) an order under section (Survivor benefits under occupational pension schemes);”

Amendment 2 agreed.

Clause 19 : Extent

Amendment 3

Moved by Baroness Stowell of Beeston

3: Clause 19, page 17, line 3, leave out “and 15” and insert “to (Survivor benefits under occupational pension schemes)”

Amendment 3 agreed.

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Clause 20 : Short title and commencemen

Amendment 4

Moved by Baroness Stowell of Beeston

4: Clause 20, page 17, line 21, after “15” insert “and (Survivor benefits under occupational pension schemes)”

Amendment 4 agreed.

In the Title

Amendment 5

Moved by Baroness Stowell of Beeston

5:In the Title, line 6, after “partnership” insert “, for the review of survivor benefits under occupational pension schemes”

Amendment 5 agreed.


Moved by Baroness Stowell of Beeston

That the Bill do now pass.

Lord Cormack: I understand that this is the time that one would make a brief contribution on this Motion. I am very sorry to be doing it now in a sense because my noble friend the Minister in effect wound up the proceedings on the Bill when she was answering the amendments. However, I was not to know that she was going to do that. I want to make a very brief speech and congratulate all those who have campaigned for this measure on their success. However, in doing that, I ask them to bear in mind that although this may be a day of unqualified rejoicing for them, many in our country, who by no stretch of the imagination could be called either homophobic or bigoted, are unhappy about this Bill. They are unhappy about it because it changes the structure of society by changing the definition of marriage.

I hope that all those who enter into marriage under its new definition will, indeed, live happily every after, but the sincerity of that wish in no sense prevents my saying to them, “I understand that you feel euphoric today but please have a thought for those who have different views and for the many, not just thousands but millions of people in this country, for whom marriage will always be equated with what remains in this Bill the Christian definition of marriage”. I hope that in recognising that, they will also remember the great Churchillian motto: magnanimity in victory.

Those who support the Bill have won; there is no doubt about that. It would be churlish and ridiculous to pretend otherwise and I, for one, would never do so. I hope that the divisions in our society which I fear will not come to pass. For my part, I will do my best, in whatever way I can, to ensure that they do not. However, if we are to have a society that is not embittered, and bitterness is the most corrosive of all emotions, it is important that both sides of this argument recognise the validity of the other side. The noble Lord, Lord Alli, for whom I have developed a very real regard during these debates, is, indeed, a doughty campaigner and has every right to feel pleased with

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the result of his campaign. However, I say to him, and through him, “Please remember the millions of decent people for whom this is not a day of rejoicing”.

Lord Framlingham: My Lords, I, too, wanted to make a brief contribution, having sat through all the remaining stages and the Motion that the Bill do now pass. I am one who does not think that it should.

Today has the potential to be deeply sad for this House and for millions of people—children, parents, families, teachers, clergymen—indeed, anyone who believes in the traditional family unit and its fundamental role in the life and cohesion of our country. If this Bill in its present form becomes law, a large number of people with understandable aspirations will be given new freedoms and be made very happy. But surely it must be right and only fair that your Lordships’ House should give some consideration to a much larger number of people, running into millions, whose lives will be less happy and whose concerns and problems will be increased by this legislation.

Have we got the balance right? I think not, particularly as the opportunity to adjust the balance was spurned by the Government’s complete rejection of any meaningful amendments. Happiness won at the expense of other people’s happiness is rarely trouble-free in the long term.

The questions that many are asking are: why now and why the haste? The simple truth is that the coalition Government have colluded with equal love campaigners and the European Court of Human Rights in bringing a case—an appeal—against our country’s long-established and settled position on marriage. There was a suggestion—some would call it a threat—that if legislation were not brought forward by June this year then changes would be forced on us. The House of Lords Library tells me that as legislation is proceeding the case in the European Court of Human Rights will probably not now be pursued. What outrageous, behind-the-scenes arm twisting.

The result is that not one meaningful amendment has been accepted, not because none has been worth while but for the sake of entirely contrived deadlines, which suit campaigners in a hurry and a Government who want it off their plate well before the next general election. How cynical and how dangerous. Given the huge effect the Bill, if passed, will have on millions of people, what an abuse of the parliamentary system to put speed before truth. So many important issues causing great concern have been left unresolved and hanging in the air, such as the effect on teachers, faith schools, the issue of adultery, consummation, the effect on registrars, which has already been referred to, and the use of premises—issues touching the lives of thousands every day, not to mention the effect on marriage itself.

Those of us who have sat through all the stages of the Bill and have watched the Government knock down amendment after amendment have despaired at their intransigence. This House prides itself on being a revising Chamber. On this Bill it has been a bulldozer. We are being used to bulldoze through an ill thought through Bill, the ramifications of which the people have not begun to understand. All great issues are essentially very simple. We make them complicated when

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we do not want to face them or when we are anxious to hide their true meaning and purpose. This Bill is built entirely on pretence. It pretends that there is no difference between a man and a woman. From this deceit have sprung all the problems we have been wrestling with—problems we have failed to resolve and which will bedevil generations to come. How can we possibly give our blessing to legislation built on pretence?

To those noble Lords who simply voted for this Bill at Second Reading for constitutional reasons, to those who have come to understand during our scrutiny its far-reaching measures, to those who are dismayed at the lack of concern for the worries of millions of people by the rejection of all the amendments, to those who believe that rushed, ill-thought-through legislation is dangerous, and to those noble Lords who prefer scrutiny to bulldozing—I realise that I am asking too much at this late stage—I was going to plead with your Lordships to vote against this Third Reading to defend this House’s integrity and to grant adequate time for Parliament and the people fully to understand what is going on and, I believe, to receive the thanks of millions of people.

4 pm

Lord Fowler: My Lords, in some humility, I say that I disagree with both my fellow Conservatives who have just spoken, and in particular with the last speech. I do that in the context of paying tribute to the very high standard of the debate that has taken place. I pay tribute to the noble Lord, Lord Dear, and his colleagues for the way it has been conducted.

It is never ever been our case—those of us who want reform—that opposition is homophobic. That is not remotely the case that we have been putting. There is a central division between us. When opponents of the Government’s legislation have said, “Remember what people outside are saying”, that goes two ways. We might remember also what many tens of thousands of gay and lesbian people outside are saying. It is important to them, as the noble Lord, Lord Alli, so movingly said, in personal terms. I am struck and touched by the numbers of people who have been in touch with me to say what an important decision this is. It is, of course, after years and years of discrimination. That is what makes their support so moving.

The second point is that it is important in another way. During the passage of the Bill, I have been, as it happens, to a range of countries where discrimination against gay and lesbian people is not only an underlying feeling, but it is set out either in legislation or in official attitudes of those countries. I think in particular of a country I am recently back from—Russia. I think of Ukraine and Uganda. Personally, I hope that the message of this House of Lords is that there is a better way of doing these things than the way that those countries are doing them. It is a plea for equality and for non-discrimination. That is the hope and the message that I hope goes out from this House. I believe that, very shortly, the Government will have done a great thing here and I congratulate them on it.

Lord Dear: My Lords, I start my brief but sincere comments by thanking very much the Minister for the compliments she just paid me. I am grateful to her. I

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also thank all of those who have spoken on all sides of the House in the numerous debates that have taken place about the Bill, and especially those who supported me in the passage of the Bill through your Lordships’ House. All of us from my side were more than a little surprised at the level of support that the Bill has attracted within the House. If one looks at the opinion polls taken outside among the general public, it runs at about 57% in favour of the Bill. The votes in your Lordships’ House ran 20% or so ahead of that. I make no comment about that except that it surprises, and others will take considerable pleasure from that.

All I say, very sincerely, is that despite the serious doubts that some parts of our society harbour about the wisdom of the Bill, I—and I am sure I can speak on behalf of my supporters—fully recognise the parliamentary process and willingly accede to it. We all hope very sincerely that if passed by the House of Commons, the Bill will prove to be a success.

Baroness Farrington of Ribbleton: Earlier today in your Lordships’ House, there was a reference to grandchildren being able to teach those of us who are grandparents about information technology. I have also found through listening to children out in the country that, unlike some of us from our generation, we are not actually changing what is happening in the country, we are recognising it. As a 12 year-old said to me, “What is the problem with that? Two people love each other”. Our grandchildren’s generation, and many of our children’s generation, live in what the Japanese call the house of tomorrow. I thank all my colleagues around the House who have been involved in steering the Bill through, but in particular the Minister, who, if she does not get George Clooney, perhaps could be on her way to sainthood because of the patience she has shown during the passage of the Bill.

My only worry comes from my experience in the education service, where stories appear which say that a school is going to ban Christmas or going to do this or that. I am proud of this House for the trust it is putting in trustees, governors, local vicars, parents, communities and teachers through the passage of the Bill and make a plea to all concerned for when the stories start appearing, as they will. Fortunately, in August, which is known as the funny month, most schools are not sitting—with the exception, I believe, of those in Scotland—so the press stories will not start just yet. However, my plea to anybody who reads a critical story connected with the passage of the Bill, such as one saying, “We told you so” or that it is not working, is to remember the story of the local vicar in Lancashire who was castigated in the press for saying that you could not put “gran” on a monument in the churchyard because it was not serious enough. That turned out not to be true and the poor man spent the rest of his clergyman’s life being castigated for something he had never done. When the stories start, as they will, please wait to hear the outcome of the due process and whether somebody is found guilty of something by the governors through appeals and the disciplinary procedure. Do not get caught out by the knee-jerk reaction that the media will try to create in certain circumstances. Let us make certain that this Bill is a success and that this House has done a good thing. Yes, there are

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people who do not want change—there are always people, of course, who do not want change—but we have recognised change and we should be proud of it.

Baroness Barker: My Lords, the passage of the Bill has been a remarkable thing. Having sat through every bit of it, I have to say that the discussions in your Lordships’ House have been not just of the highest calibre but deeply thoughtful about the nature of the society that we wish to pass on to future generations; none more so than the contributions from the Bishops’ Benches. The Bill represents a real sea change for gay people and for our society—a good one that heralds the start of a new relationship between minority groups and faith groups. All those groups have an important part to play in building strong communities for the future and that is why we on these Benches have supported this Bill at every stage.

We have been helped enormously by the Front Bench team in dealing with some quite difficult, tricky and intricate issues. I say to the noble Lord, Lord Cormack, that, no, there is no room for triumphalism. However, he will perhaps allow some of us today to celebrate what for us is a really important step towards equality and equal treatment. There is no room for intolerance but this House should be very proud.

Baroness Thornton: My Lords, the custom at this stage of the Bill is for all of us to look at each other and congratulate ourselves on the piece of legislation that we are just about to sign off. Of course, I realise that not all noble Lords feel the same sense of satisfaction at a job well done that the Minister, other noble Lords who have supported the Bill and I feel at this moment. I regret that they are not sharing the sense of joy and happiness that some of us are experiencing. Certainly, if the London Gay Men’s Chorus’s tuneful offerings outside the House are anything to go by, very many others feel the same. Some of us, indeed, could not resist wearing pink carnations. However, I note that even the noble Lord, Lord Cormack, is somewhat resplendent in pink himself.

To noble Lords who opposed the Bill I say that you have tested the Bill to within an inch of its life, and for that I congratulate you. No one expected that getting the Bill through your Lordships’ House would be a walk in the park, and I think that noble Lords have done their job as they see it with dedication and commitment.

There were moments at midnight when we were again discussing adultery when I thought we were never going to reach this point. Those moments were made all the more memorable by the description by the noble Baroness, Lady Stowell of Beeston, of what is adultery and what is not. I refer noble Lords to col. 146, 8 July 2013, if they are in any doubt. I wish her well with George Clooney, and I myself do not think that he is anything like worthy of the noble Baroness.

I very sincerely hope that time will change the views of noble Lords who are still concerned about the Bill. I hope that the happiness the Bill will bring to thousands of same-sex couples will persuade everyone that, after all, Parliament was right in its huge majorities on free

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votes, which led us to where we are today. I hope that your own marriages will indeed come through this change unscathed and as whole as ever, and that marriage itself will actually be strengthened and deepened by the Bill.

We must recognise that when the Prime Minister, to whom I pay tribute for his steadfast support, my right honourable friend the leader of the Opposition, Ed Miliband, and the leader of the Liberal Democrats all speak in unity, then the issue has powerful friends. However, even with those powerful friends, free votes ran through the Bill on all the major votes, and were won all the way through with huge majorities.

I pay tribute to the Minister, the noble Baroness, Lady Stowell of Beeston, for the way in which she steered the Bill through the House. Patient, energetic and always ready to listen, she never lost her sense of humour or proportion. Ditto her helpmates, the noble and learned Lord, Lord Wallace, and the noble Baroness, Lady Northover. Indeed, we worked together on this Bill, and I am glad of it. The Bill team were always helpful and friendly, and are to be congratulated on their very hard work. I know that the demands that were made on humanism, pensions and a host of other issues meant that they and the Ministers had to go back and persuade their colleagues in government that they needed to revisit or revise matters they thought already settled. I know how hard that is.

Across the House there has been remarkable work by groups of Back-Bench Peers, co-operating to win the free votes on the Bill. My noble friend Lord Alli has been remarkable; not only did all of us on the Labour side receive bulletins and information about what was going to happen and when votes were taking place, but he also organised some light entertainment for Labour colleagues. On Monday the actor Richard Wilson and last Wednesday evening Paul O’Grady, aka Lily Savage, joined us in Committee Room G. I thank them for their support and generosity. My noble friend Lord Alli has talked to everyone all the time, which I think helped the good humour and tolerance which characterised the debates even when we fiercely disagreed.

There are other Members one should thank. The noble Lord, Lord Harrison, and the noble Baroness, Lady Massey, fought the corner for humanist weddings. The noble Lady, Baroness Meacher, and the noble Lord, Lord Lester, helped to find a way through on humanist weddings. My noble friend Lady Gould explained with great clarity the issues faced by transsexual people, matters not yet resolved and to which we may return some time in the future, but not on this Bill. Many of my colleagues have been here all the way through. I thank you all.

I personally have been blessed with support and equal sharing, as it should be, by my noble friend Lady Royall, who fitted the Bill in with her many other duties. I thank her. My noble friend Lord Tunnicliffe sat next to me all through the Bill, and kept us to time and calm while under duress. I also thank the back room: Bethany Gardiner-Smith from the Opposition Whips’ Office, whose research, political management and inspired amendment-drafting made many things possible.

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4.15 pm

Across the House, the noble Baroness, Lady Barker, has been with us every single step of the way and played a blinder with her Lib Dem colleagues, whose voting record has been magnificent. I thank the noble Baronesses, Lady Noakes and Lady Jenkin, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, and of course the noble Lord, Lord Pannick, from the Cross Bench, to whom I pay particular tribute. I treasure some contributions from other noble Lords: the noble Lords, Lord Foulkes and Lord Deben, my noble friend Lord Alli and the noble Baronesses, Lady Howarth and Lady Brinton. All their contributions bear re-reading.

We should not forget the contributions from the Bishops’ Benches. The most reverend Primate the Archbishop of Canterbury made a very important speech at Second Reading. Many other right reverend Prelates have joined in the debates throughout, always with elegance and thoughtfulness. The meetings that we on this side have had with the right reverend Prelate the Bishop of Leicester and his colleagues have been helpful and always friendly. I cannot remember another Bill that has merited such attention from the Lords Spiritual.

Alongside us all, we have had the help and support of Stonewall and the Labour, Conservative and Lib Dem LGBT groups. I also thank the British Humanist Association for its support. I particularly appreciated the tweets late at night. I was conscious that thousands of people were watching us all over the country. I sometimes felt like saying, “Get a life”, and they were certainly puzzled by some of our customs, but they were willing the supporters of the Bill to keep going.

The same-sex marriage Bill is a historic Bill. I am proud to have led these Labour Benches during its passage and to have helped ensure its safe passage on to the statute book. I am proud that the House has done its job well and thoroughly.

Baroness Stowell of Beeston: My Lords, I am very grateful to the noble Baroness, Lady Thornton, for ensuring that everybody got a fair mention in tributes. Having spoken at some length at the end of the previous debate, I shall keep my remarks brief. I am sorry if my remarks then seemed to pre-empt a debate on Bill do now pass, but I was not sure whether there would be a debate on that and felt that there were some important things that I wanted to get on record, which is why I took the opportunity when I did.

I said at Second Reading, and have done so a couple of times since, that we all move at different paces when faced with change. I most certainly respect anyone who has a different view about whether couples of the same sex should be able to marry, and I would never seek to criticise anyone who disagrees with me on this point. I have been pleased to say repeatedly that the belief that marriage should be between only a man and a woman is legitimate; people are free to express that view; and the protections in the Bill ensure that religious freedoms cannot be called into question. That is so important. I am grateful to my noble friends for making the points that they did and for giving me the opportunity to restate that, because I cannot say it too often.

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The amendments on which the House divided during the time that the Bill was in this House were not agreed, but I do not agree with my noble friends that no meaningful amendments have been made to the Bill while it has been here. I spoke at some length in responding to the previous debate about the changes that we have made, so I shall not go through them all again in detail. However, as I said, 23 substantial amendments have been made to the Bill—that does not include any consequential amendments. Seventeen of them have been made while the Bill has been in your Lordships’ House. Even though amendments brought by other Peers have not been accepted by this House, the Government have brought forward amendments to the Public Order Act to ensure the protection of freedom of speech. As I have said previously, we have clarified issues around the word “compel”, because we thought that it was possible to do that without introducing any other uncertainty in the Bill or diluting its principle. I am pleased that we were able to do that, and that it was received and accepted so graciously by those who sought those changes.

It is so important to say how much I respect all noble Lords and their views on this Bill. I believe that we have brought forward a Bill that is a force for good and that the change it brings about is right and reflects the change in society. However, there is no question whatever that anybody who disagrees with it should in any way feel that their views have not been properly taken into account during our debates. I said before that I wanted to see that it was possible to put something into law that not everyone agrees with, while respecting our differences of view. I think that this is what we have achieved. On that note, there is probably little more to say, except how grateful I am to all noble Lords for their contribution to the passage of this Bill.

Bill passed and returned to the Commons with amendments.

Local Audit and Accountability Bill [HL]

Local Audit and Accountability Bill [HL]


4.20 pm

Clause 1 : Abolition of existing audit regime

Amendment 1

Moved by Lord McKenzie of Luton

1*: Clause 1, page 1, line 10, at end insert “in particular the appointment of auditors either as provided in subsection (9) of section 7 or otherwise in accordance with section 7 and”

Lord McKenzie of Luton: My Lords, in moving the amendment, I will speak to the other amendments in this group as well. As noble Lords will doubtless recognise, Amendment 1 is a paving amendment and the substance is in Amendments 6 and 9. Amendment 9 is consequential on Amendment 6.

The proposition is straightforward, and we had understood there was consensus. Notwithstanding this, we have not seen a government amendment to give it effect. The amendments provide a route to securing a central procurement of auditors in the future. As we discussed on the first day in Committee, by the time the key provisions of this Bill come into force, it is expected that all the audit contracts with principal

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local bodies will be undertaken by private sector firms, under arrangements entered into with the Audit Commission. This will comprise some 800 principal authorities, including local authorities, NHS and police bodies, and so on.

The contracts—I think that there are 10 of them—run to March 2017, but can be extended for three years. When these contracts have run their course, the authorities will make their separate appointments, although there is flexibility for authorities to jointly procure, together with other bodies. It is generally accepted that the central procurement exercise undertaken by the Audit Commission has generated substantial savings for local bodies—some 40% reduction in fees—and had some, albeit limited, impact on broadening the diversification of provision in the audit market.

The Government’s own impact assessment has recognised that individual audit procurement is unlikely to match central procurement in generating reduced fee levels. Research shows that market concentration in audit services leads to higher audit fees, and while there is a credible argument that individual procurement will act against market concentration, major providers in the market are large, economically powerful entities with resources to invest in tackling the new opportunities.

One risk is that the larger authorities will fare well in this, because they will be more attractive clients to the big firms. In practice, smaller authorities will end up with less choice, being the junior partners in joint appointments and perhaps missing out on the services of the larger firms or being unable to afford them. The Government will doubtless remind us that authorities can group together. They can, but there is no clear framework to support this. Indeed, there is no explanation, for example, of what happens if there is joint provision when a conflict develops between one of the authorities and the firm involved.

The amendments, particularly Amendment 9, which is at the core of it, adopts the approach already included in the Bill for potential central procurement for smaller authorities. It enables regulations to specify a person to appoint auditors with relevant powers relating to fees, et cetera. It especially encompasses the prospect of authorities being able to opt either in or out of the arrangements, which we know is a key requirement of the Minister. The Minister has expressed an appetite for facilitating ongoing central procurement, provided that it is not mandatory, and a hope to be able to return on Report with some ideas. Perhaps we can now hear what they are. We know that the Minister and officials have been having discussions with the LGA, but we do not necessarily think that arrangements run by it are the only, or, indeed, the best approach. If we are to preserve central procurement, we need the legislative basis to do that. That is what the amendments provide. I beg to move.

Lord Palmer of Childs Hill: My Lords, in Committee, my noble friend said that the Government would commit to amend the legislation to create a framework to support a voluntary national procurement exercise. When she replies, I would appreciate it if she could put some meat on that earlier commitment.

Dealing with the point made by the noble Lord, Lord McKenzie, if one was always looking in terms of

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cost savings, which seemed to be the main thrust of his speech, we would have almost the demise of all local authorities. It would be a case of, “Let us have it all done nationally and then we would save some money”. We as a Government are committed to localisation. The idea that local authorities should be to a degree able to choose their auditor is part of that localisation. There was a feeling of despair in the noble Lord’s comment about how local authorities would be less hard negotiators than the Audit Commission. I doubt whether that will be the case. Many local authorities would be very hard negotiators on their own behalf in fixing the audit fees, the level of audit taking place and how it will dovetail with the internal audit systems of the local authority. A local authority that has a good local internal audit system can probably negotiate much harder with the external auditors, because of its knowledge of its internal audit system, than the Audit Commission has in the past.

I believe that the amendments are unnecessary, and I would welcome and wait for my noble friend’s comments on how the Government will keep the commitment that she made at an earlier stage of the Bill.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, I thank the noble Lord, Lord McKenzie, for introducing the amendments so succinctly and clearly and my noble friend Lord Palmer for reminding me—although I am not sure that I made a total commitment—that I said that we would return to the matter.

Both noble Lords have laid out the situation very clearly. The proposal in the Bill is that local authorities should be able to purchase or contract for their own auditor. They can do that individually, in conjunction with another authority or in a group. That is about as wide as the Bill takes it. The noble Lord and the Local Government Association have made strong recommendations that we should consider further the current situation, which is that the Audit Commission has purchased the contract for all local authorities. We have made it clear that there must be optional arrangements about this. Local authorities must be able to get their local auditors in the way that they wish. However we accept—and did accept—that there was potential for wider procurement, with a procurement body such as the Audit Commission, which did not require local authorities to purchase from it, but could be used by local authorities if they wished. So we accept that there is potential for such arrangements.

I have asked departmental officials to work with the Local Government Association to clarify what arrangements it envisages might need to be made and to get the detail right for any amendments that we would propose elsewhere. The Government intend to make an amendment to the Bill in the Commons, which will allow arrangements for optional centralised procurement to be made in regulations. I am happy to keep noble Lords who are interested in this informed.

4.30 pm

I hope that noble Lords feel that we have fulfilled the discussions that we had at the last stage. While I cannot give details of the likely outcome at the moment—

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and, indeed, there might not be an outcome because I do not know how the discussions will go—the intention is that there should be an appropriate amendment in the Commons once suitable discussions have taken place.

I hope that, with those reassurances, the noble Lord feels able to withdraw the amendment.

Lord McKenzie of Luton: My Lords, I thank the Minister for her reply and the noble Lord, Lord Palmer, for his contribution to this short debate. I say to the noble Lord that I do not advance the proposition that all local authorities will not be hard negotiators. My point was that there could be a differentiation between the smaller authorities and the larger authorities. I am sure that the larger authorities will be well capable of looking after themselves—they prove that on a daily basis.

Localism and audit appointments within a regulatory framework are more complex issues than localism generally in the context of provision of services. Cost savings is one feature, but it seems to me, particularly in the current climate, that it is a very important feature of what we should be helping local authorities to achieve.

The Minister has in a sense reiterated what she said before. I do not honestly believe that that takes us any further forward. We have accepted that there should be a permissive, not a mandatory, regime. If that is where the Government are, I am not sure what is in this that cannot be accepted because it provides a route to set up exactly that sort of regime.

The Minister said that there was an intention to bring forward an amendment in the Commons. With respect, however, in the next breath—as I understood it—she said that that was not certain. I do not know whether the noble Baroness might be able to clarify that point for me before I conclude—it is fairly critical.

Baroness Hanham: My Lords, I want to make it clear that it is the Government’s intention to see that the proposed arrangement is fulfilled, so that there might be wider procurement than there is at present. In order to do that, I am unable to say today that it will follow exactly these provisions because discussions need to take place. The Local Government Association in its briefing, as I am sure the noble Lord will have seen, is happy that that should be the situation. It is content to have those discussions and to see that an appropriate amendment is put forward in the Commons.

As a politician, one should never hedge. What I am told is that there will be an amendment. I should never have put any doubt in the noble Lord’s mind about that. I hope that will help to clarify the situation and prevent the noble Lord feeling that he has to press this amendment, when I suggest that it is completely unnecessary.

Lord McKenzie of Luton: My Lords, again, I thank the Minister for that. Indeed, I was tempted to press this amendment but I take her assurance that an amendment will be brought forward in the Commons that will enable central procurement, but not on a mandatory basis. If that is the proposition we can take

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from this discussion, that is as far as I can take this amendment today and accordingly I beg leave to withdraw.

Amendment 1 withdrawn.

Amendment 2

Moved by Lord McKenzie of Luton

2*: Clause 1, page 2, line 4, at end insert—

“(6) Before the commencement of this section, the Secretary of State must be satisfied that effective successor arrangements are in place or achievable for—

(a) the management of existing audit contracts entered into with the Audit Commission;

(b) the maintenance and updating of Value for Money profiles; and

(c) certification functions currently undertaken by the Audit Commission.”

Lord McKenzie of Luton: My Lords, I will speak also to Amendment 3. The more we delve into this Bill, the clearer it becomes that the decision to close the Audit Commission was taken without a clue as to how some of its functions were to be carried out in the future or how some of the savings that it has driven could be maintained.

We have just discussed how a central procurement function might be preserved, and we will come on to discuss how the commission’s efforts to prevent and detect maladministration and error can be carried out in the future. Amendment 2 focuses on three specific areas, which are,

“the management of existing audit contracts … the maintenance and updating of Value for Money profiles; and … certification functions currently undertaken by the Audit Commission”.

It requires that robust processes are in place for these before the Audit Commission is closed. We have discussed these before and received assurance that the Government have these matters in their sights, but we are again sadly lacking in detail as to what is proposed.

As we discussed in Committee, the management of ongoing audit contracts is not a straightforward, passive matter. It requires the availability of certain powers that are currently available to the Audit Commission; for example, in relation to fee setting. Given the public interest in local public audit, any successor arrangements will need to ensure transparency in audit quality monitoring. The FRC is to monitor major audits and it is unclear what public reporting there will be on this. All other audits can be subject to cyclical monitoring by the supervisory bodies but there is no commitment yet to any public reporting on the results of this monitoring. Perhaps the Minister will tell us now what is proposed in this regard.

In Committee, the Minister told us that,

“we are giving consideration to the transfer of current Audit Commission tasks, including the value-for-money profiles”.—[

Official Report

, 17/6/13; cols. GC 25-26.]

Now is the chance for the Minister to be a little more specific. The value-for-money profiles are widely used; there were some 9,000 visitors to the commission’s website in the past financial year. They bring together data about the costs, performance and activity of local councils and fire authorities. The profiles show how

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organisations are spending resources, what services they perform and how these cost and performance levels compare between organisations and over time. The commission is enhancing the visibility of these profiles by presenting information about how spending and activity have changed over time, how councils’ performance differs, and factors affecting variation in activity and cost. Can we be very clear on this: are these profiles to be maintained and, if so, how?

It is accepted that certification processes may diminish as grant funding streams are reformed and phased out but there will certainly be the need to deal with housing benefit funding before this is absorbed fully into universal credit. Can the Minister give us some assurance on just this one matter, if not the generality of the replaced certification regime?

We have so little hard information on these areas and the Bill is about to leave your Lordships’ House. We should remember that it is actually three years since the decision to close the commission was announced. In these circumstances, requiring these matters to have been satisfactorily dealt with before the Audit Commission is closed seems the very least that we can do.

The same applies to being satisfied as to how the new audit regime is to be co-ordinated across government and how accounting officers will be entitled to obtain assurances on the effectiveness of financial management arrangements. There will be no organisation to publish the outputs from the audits of over £200 billion of public money. Accounting officers will need to continue to have access to analyse the outcomes of local work, and individual government departments will need arrangements to receive the outcome of audits. We are entitled to be assured that this is all in place before the commission disappears.

That is all that this amendment seeks to achieve, but it is very important. I beg to move.

Lord Palmer of Childs Hill: My Lords, the purpose of Amendments 2 and 6 is clearly to try to improve the transitional arrangements. It seems to be felt that we need a certain overprotection for transitional arrangements, but when private corporate bodies change their auditors and way of management, some transitional arrangement always has to take place. It works in a natural way, without the Secretary of State being involved in every item.

Amendment 2 inserts three paragraphs. The first deals with,

“the management of existing audit contracts entered into with the Audit Commission”.

One of the main purposes of the Bill is to make the audits of the various local authorities much more the responsibility of the local authority. Its appointment of the auditor and dealings with the auditor, and the auditor’s dealings with the authority, will become a more localised matter. However, because there are a limited number of audit firms, there will be a consistency in the types of audit operated.

The main point that the noble Lord spoke about was,

“the maintenance and updating of Value for Money profiles”.

Value for money in the external audits of local authorities has been a very important and costly factor in terms of the time that the Audit Commission and private

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firms of auditors have spent on those activities and how much they have charged for them. Two or three years ago, the value-for-money audits carried out by external auditors were more limited. There was no large-scale review of the use of reserves, assets and finance. Under the current arrangements, external auditors do not have to carry out a prescribed list of value-for-money exercises.

Currently, before the Bill, that situation is very much localised. There is a virtue in that localisation. Different firms of auditors will possibly take a different view on what is needed within that particular local authority, and that view will have an effect on the fees charged to that authority and on how much work needs to be done. As the years progress, it will be interesting to see how different local authorities have their value-for-money details published. We hope that all local authorities will publish these, and there may need to be some national gathering of that information for comparison purposes. However, that does not necessarily need to be in the Bill. Although I understand where the noble Lord is coming from on this, I think that it amounts to a little too much control which is not needed.

Baroness Hanham: My Lords, I thank my noble friend Lord Palmer for bringing some rationality into this particular aspect. I support him very much in reminding the House that this is an intention to bring to a local level the management of an extremely important part of local government’s responsibilities, which is to have proper audited accounts, but to do it in a slightly different way from what has been done in the past, without the overall management of the Audit Commission but having to take into account the fact that these have to be properly done, whether they are done on the optional basis that we are talking about—having the wider procurement—or because they have taken account of having these on their own requirements.

4.45 pm

I understand the purpose of these amendments: to place a duty on the Secretary of State and ensure that appropriate arrangements are in place. My noble friend has made clear that he does not believe that this should be a responsibility of the Secretary of State, and nor do I, but I support the intent of the amendments. It is important that we plan for and implement a smooth transfer of the Audit Commission’s functions, that we enable a workable and coherent audit regime and that we ensure that the future regime is able to give assurance to accounting officers. I assure noble Lords that we have a commitment to these issues. However, as I and my noble friend Lord Palmer have said, rather than the Secretary of State having responsibility for this, we do not believe that there should be a commitment on him to take this up.

We are working closely with the Audit Commission, the Financial Reporting Council, the National Audit Office and the Local Government Association to develop arrangements to support the transition from the current regime to the future local public audit framework. This includes an assessment of what tasks that are currently undertaken by the Audit Commission need

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to continue and, for those that do, options for which organisation should undertake them. Perhaps, if I may, I will take those issues in turn.

First, the noble Lord, Lord McKenzie, raised the issue of the Audit Commission’s existing contracts, which will run until 2017. We discussed this in Committee, and I advised the Committee that an interim body or bodies will manage these contracts as the Audit Commission passes and any related functions following the abolition of the commission. We are now working with other partners to scope out the range of options, which includes transferring the contract management function to the Government, a sector-led body or other potentially suitable organisation, which might be a specific organisation set up to manage the two years of the contract. The Bill currently provides flexibility, therefore allowing these various transitional options to take effect. I assure noble Lords that officials are working on the detail, and while I know that the noble Lord would like it all cut and dried with regard to exactly what is happening, at the moment I cannot do that. I can say that consultations are taking place, again including the Audit Commission, with an interest in the form and function of the interim arrangements. We are not going to try to artificially limit the range of options at this stage, and we will be scrutinising what needs to be done to ensure that and to ensure that we put in place the most effective successor arrangements for this contract announcement. We all understand how important this is.

My officials are still engaged in discussions with the Audit Commission—I have said that a couple of times, but with all these the commission is closely involved—about the future of the value-for-money programmes, including the content, format and host organisation. The Treasury is also working with individual departments to ensure that transitional arrangements are developed for grants requiring certification following the closure of the Audit Commission. In advance of the abolition of the commission, several departments have agreed to move early to develop tripartite arrangements with individual authorities and their auditors. A number of other departments already certify their grants in these ways so, in these instances, departments as grant-paying bodies will manage the arrangements supported by guidance to ensure a consistent approach across local authorities.

As part of this work, the Audit Commission has offered to support departments moving towards these tripartite arrangements in what they will need to ensure that arrangements are robust. As is currently the case, departments will continue to ensure that these arrangements provide adequate assurance to their own accounting officers. I would like to provide an assurance that, on all these transitional matters, once again we will make sure that noble Lords in this House are kept abreast of what is being discussed.

Amendment 3 focuses on the co-ordination of the new regime and how accounting officers obtain assurance on the effectiveness of financial management arrangements. If we reflect for a moment on the current arrangements, local authorities are accountable for their own financial management and expenditure, and there is an existing system of local accountability.

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This is set out in some detail in the accountability system statement for local government, which my department’s accounting officer uses to provide assurance to Parliament. Audit forms only one small part of these wider arrangements and the Bill does not change the scope of audit, meaning that the assurance provided will be largely the same as at present, whoever it is provided by. Similarly, government departments, through their individual accounting officers, are accountable to Parliament, and they are required to demonstrate that their existing accountability systems are robust.

We are currently working with the National Audit Office to ensure that information from audit will still be available to the accounting officer at a national level to help provide assurance. I can assure noble Lords that this is definitely achievable, but in a similar way to the management of the commission’s existing contracts. This requires further consideration. We are working through the intricacies and are on course for a timely resolution, which I hope the other place will have time to consider.

Appropriate provision will remain in place to ensure that a high quality of audit is maintained and that there is sufficient visibility of audit output information in the new regime. To this end, the Financial Reporting Council and professional accountancy bodies will oversee and regulate. The noble Lord specifically asked me about the regulation on monitoring of quality of audit. This will be overseen by the Financial Reporting Council, which will also regulate the work of the auditors and the monitoring of the quality of the audit. Arrangements will be put in place for health bodies because, as we have discussed in the past, their accounts are consolidated into the Department of Health’s financial reports. All audit output information will continue to be available and will be published locally rather than centrally. It will be the responsibility of the local authorities.

I repeat my earlier assurances that it is the Government’s intention to achieve the purpose of the amendments that the noble Lord has put down. However, we do not believe that placing duties on the Secretary of State is the most effective way of achieving it at this time. The noble Lord asked me about the certification of housing benefit for the Department for Work and Pensions. The Audit Commission will continue to provide the grant certification for 2014-15. Housing benefit continues to be complex. I may need to come back to the noble Lord on that because I cannot read my writing. While the commission can start the process of developing guidance for 2014-15, the anticipated closure of the commission in March 2015 means that subsequent work is required to complete this under the proposed interim arrangements. I think we are back where we started in that this matter is still under consideration, as are all the other matters.

I know that the noble Lord wants specific arrangements in place at present. However, as I said before, we cannot give those in this House. There will be further discussions in the other place relating to the specific elements that the noble Lord has raised. That is not to say that I am not grateful to him for having done so. It is important that we put down the fact that work will carry on over the next few months so that we can come to conclusions about these arrangements. I hope that

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the noble Lord will feel able to accept my explanation, and I thank the noble Lord, Lord Palmer, for giving me some very rousing support.

Lord Christopher: My Lords, before the noble Baroness sits down, will she kindly explain a point on which I am very unclear? Some time before 2017, someone will have to decide whether the existing contracts are to be extended or not. My view is that they should be extended because they are cost-effective. Who will handle that, and who will deal with the situation that would arise if perhaps a small number of local authorities covered by a particular contract do not wish to renew while the remainder do?

Baroness Hanham: My Lords, the current contracts are due to last until 2017, and there will then be an interim arrangement between 2015 and 2017, as I have described. After 2017, unless for some reason it is decided universally to extend the contracts again en bloc—which is completely outside what we are talking about today, and it is probably unlikely—it is for the local authorities to make their own decisions about the contracts: where they want them to be, and with whom. Following 2017, within that interim period between 2015 and 2017, local authorities will have to decide what they will do and how to manage it.

Lord McKenzie of Luton: Again, I am grateful to the Minister for her response and to the noble Lord, Lord Palmer, for his challenges. I will start with the noble Lord. I sought to focus on the contracts that are in existence, not the subsequent regime, in which local authorities may or may not appoint their own auditors. However, there is a bundle of contracts, to which my noble friend Lord Christopher referred, which are ongoing at the moment but which will need management. That management is more than just a passive affair, so it needs to be put in place.

I thought that the arrangement about extension was that it would ultimately be a decision for the DCLG about its 10 bundles of different contracts—you do not necessarily have to make the same decision in respect of each of them. I say to the noble Lord, Lord Palmer, that I did not say that there should be some standardised approach to value-for-money issues. I sought to ensure that there was security of the value-for-money profiles that the Audit Commission currently produces—data that are available to all authorities and others as well—so that authorities are able to make their own judgments and undertake their own exercises, whatever they may be. After the Minister’s response, this is the area I feel less confident about. We do not know from the reply whether they will be maintained, even broadly, in their current form, or whether they will be available as a valuable tool for local authorities and health bodies in the future.

It was not my intent to get the Secretary of State involved in all things. The purpose of the amendment is to require the Secretary of State to be assured that these matters are in place—not that the Secretary of State is operating them—by the time the Audit Commission closes. Once the Audit Commission goes, that will be a very clear break with the current situation. So far as the role of the FRC and supervisory bodies is concerned, I understand their role in that, but the key

15 July 2013 : Column 559

issue is on how transparent the result of their work will be. We do not yet have clarity on what will be the consequences of their auditing of audit work and what will happen to that. That was part of what I was inquiring about.

Perhaps the noble Baroness can first deal with that point about transparency of the FRC’s supervisory activities or the supervisory bodies: what is likely to be in the public domain as a consequence of their work? It would be helpful if we could have an answer on that. I should also like some clarity on the value-for-money profiles. Is it intended that the data will still be collected, maintained and available to relevant bodies—whether in precisely the same form as now, or not? Is it intended that these profiles be available in the future, once the Audit Commission has closed? This is an important issue, so could the Minister give some further clarity on it?

Baroness Hanham: My Lords, I may need to write to the noble Lord on the detail of this. However, our understanding is that clarity and transparency will remain as they are at present, so that the Financial Reporting Council will have much the same monitoring role. Anything that it does in relation to councils and local audit will have to be as transparent as is necessary. I would prefer to write to the noble Lord, particularly on this issue, and to make sure that the information is put into the Library of the House.

Lord McKenzie of Luton: I am grateful to the Minister for that but perhaps it is time we stretched our legs. I beg leave to test the opinion of the House.

5 pm

Division on Amendment 2

Contents 170; Not-Contents 205.

Amendment 2 disagreed.

Division No.  1


Adonis, L.

Alli, L.

Alton of Liverpool, L.

Anderson of Swansea, L.

Armstrong of Hill Top, B.

Bakewell, B.

Barnett, L.

Bassam of Brighton, L. [Teller]

Beecham, L.

Berkeley, L.

Bew, L.

Bhattacharyya, L.

Billingham, B.

Blackstone, B.

Blood, B.

Boateng, L.

Boothroyd, B.

Bradley, L.

Bragg, L.

Brennan, L.

Brooke of Alverthorpe, L.

Brookman, L.

Browne of Ladyton, L.

Campbell-Savours, L.

Carter of Coles, L.

Christopher, L.

Clark of Windermere, L.

Clarke of Hampstead, L.

Clinton-Davis, L.

Cohen of Pimlico, B.

Collins of Highbury, L.

Corston, B.

Crawley, B.

Cunningham of Felling, L.

Davies of Abersoch, L.

Davies of Oldham, L.

Dean of Thornton-le-Fylde, B.

Desai, L.

Donaghy, B.

Donoughue, L.

Drake, B.

Dubs, L.

Elder, L.

Elystan-Morgan, L.

Evans of Temple Guiting, L.

Farrington of Ribbleton, B.

15 July 2013 : Column 560

Faulkner of Worcester, L.

Filkin, L.

Foster of Bishop Auckland, L.

Foulkes of Cumnock, L.

Gale, B.

Gibson of Market Rasen, B.

Giddens, L.

Glasman, L.

Golding, B.

Gordon of Strathblane, L.

Gould of Potternewton, B.

Grenfell, L.

Griffiths of Burry Port, L.

Grocott, L.

Hanworth, V.

Harris of Haringey, L.

Harrison, L.

Haskel, L.

Haworth, L.

Hayman, B.

Hayter of Kentish Town, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollis of Heigham, B.

Howarth of Breckland, B.

Howarth of Newport, L.

Howie of Troon, L.

Hoyle, L.

Hughes of Stretford, B.

Hughes of Woodside, L.

Irvine of Lairg, L.

Joffe, L.

Jones of Whitchurch, B.

Jones, L.

Judd, L.

Kennedy of Southwark, L.

Kennedy of The Shaws, B.

King of Bow, B.

Kinnock of Holyhead, B.

Kinnock, L.

Kirkhill, L.

Laming, L.

Liddell of Coatdyke, B.

Liddle, L.

Lipsey, L.

Lister of Burtersett, B.

McAvoy, L.

McConnell of Glenscorrodale, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

Mallalieu, B.

Mandelson, L.

Mar, C.

Masham of Ilton, B.

Massey of Darwen, B.

Maxton, L.

Meacher, B.

Monks, L.

Moonie, L.

Morgan of Ely, B.

Morgan, L.

Morris of Handsworth, L.

Noon, L.

O'Loan, B.

O'Neill of Clackmannan, L.

Patel of Blackburn, L.

Patel of Bradford, L.

Pendry, L.

Pitkeathley, B.

Ponsonby of Shulbrede, L.

Prescott, L.

Prosser, B.

Quin, B.

Radice, L.

Ramsay of Cartvale, B.

Rana, L.

Rea, L.

Reid of Cardowan, L.

Rendell of Babergh, B.

Richard, L.

Rogers of Riverside, L.

Rowlands, L.

Royall of Blaisdon, B.

Sawyer, L.

Scotland of Asthal, B.

Sheldon, L.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Smith of Finsbury, L.

Smith of Gilmorehill, B.

Soley, L.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Stone of Blackheath, L.

Symons of Vernham Dean, B.

Taylor of Blackburn, L.

Taylor of Bolton, B.

Temple-Morris, L.

Thornton, B.

Tomlinson, L.

Touhig, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turnberg, L.

Turner of Camden, B.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Warner, L.

Warwick of Undercliffe, B.

Watson of Invergowrie, L.

West of Spithead, L.

Wheeler, B.

Whitty, L.

Wigley, L.

Wilkins, B.

Wills, L.

Woolmer of Leeds, L.

Young of Hornsey, B.

Young of Norwood Green, L.

Young of Old Scone, B.


Addington, L.

Ahmad of Wimbledon, L.

Anelay of St Johns, B. [Teller]

Ashdown of Norton-sub-Hamdon, L.

Ashton of Hyde, L.

Astor of Hever, L.

Attlee, E.

Baker of Dorking, L.

Barker, B.

Bates, L.

Berridge, B.

Best, L.

Bilimoria, L.

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Bowness, L.

Brinton, B.

Brittan of Spennithorne, L.

Brookeborough, V.

Brougham and Vaux, L.

Browne of Belmont, L.

Browning, B.

15 July 2013 : Column 561

Burnett, L.

Caithness, E.

Cameron of Dillington, L.

Cathcart, E.

Chalker of Wallasey, B.

Chidgey, L.

Clement-Jones, L.

Cobbold, L.

Colwyn, L.

Cope of Berkeley, L.

Cormack, L.

Cotter, L.

Courtown, E.

Craigavon, V.

Crickhowell, L.

Dannatt, L.

De Mauley, L.

Deben, L.

Deech, B.

Deighton, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dykes, L.

Eaton, B.

Eden of Winton, L.

Edmiston, L.

Empey, L.

Falkland, V.

Falkner of Margravine, B.

Faulks, L.

Fearn, L.

Fellowes of West Stafford, L.

Flight, L.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Framlingham, L.

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Geddes, L.

German, L.

Glasgow, E.

Glendonbrook, L.

Gold, L.

Goodlad, L.

Green of Hurstpierpoint, L.

Greenway, L.

Griffiths of Fforestfach, L.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Harris of Richmond, B.

Henley, L.

Higgins, L.

Hill of Oareford, L.

Hodgson of Astley Abbotts, L.

Home, E.

Hooper, B.

Howe of Aberavon, L.

Howe, E.

Howell of Guildford, L.

Hunt of Wirral, L.

Hussain, L.

Hussein-Ece, B.

James of Blackheath, L.

Jay of Ewelme, L.

Jenkin of Kennington, B.

Jenkin of Roding, L.

Jolly, B.

Jones of Cheltenham, L.

Jopling, L.

Kakkar, L.

Kilclooney, L.

Kirkwood of Kirkhope, L.

Knight of Collingtree, B.

Lawson of Blaby, L.

Leach of Fairford, L.

Lee of Trafford, L.

Lester of Herne Hill, L.

Levene of Portsoken, L.

Lindsay, E.

Lingfield, L.

Liverpool, E.

Loomba, L.

Lucas, L.

Lyell, L.

Lytton, E.

MacGregor of Pulham Market, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Marks of Henley-on-Thames, L.

Marlesford, L.

Mayhew of Twysden, L.

Miller of Chilthorne Domer, B.

Montrose, D.

Morgan of Drefelin, B.

Morris of Bolton, B.

Naseby, L.

Nash, L.

Neuberger, B.

Neville-Jones, B.

Newby, L. [Teller]

Nicholson of Winterbourne, B.

Noakes, B.

Northover, B.

Norton of Louth, L.

O'Cathain, B.

Palmer of Childs Hill, L.

Palmer, L.

Parminter, B.

Patel, L.

Perry of Southwark, B.

Phillips of Sudbury, L.

Popat, L.

Randerson, B.

Rawlings, B.

Razzall, L.

Redesdale, L.

Rennard, L.

Ribeiro, L.

Risby, L.

Roberts of Llandudno, L.

Rogan, L.

Roper, L.

Rowe-Beddoe, L.

St John of Bletso, L.

Sassoon, L.

Scott of Needham Market, B.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Sharkey, L.

Sharman, L.

Sharples, B.

Sheikh, L.

Shephard of Northwold, B.

Shipley, L.

Shutt of Greetland, L.

Slim, V.

Smith of Clifton, L.

Spicer, L.

Stedman-Scott, B.

Sterling of Plaistow, L.

Stewartby, L.

15 July 2013 : Column 562

Stirrup, L.

Stoneham of Droxford, L.

Storey, L.

Stowell of Beeston, B.

Strathclyde, L.

Sutherland of Houndwood, L.

Taylor of Holbeach, L.

Taylor of Warwick, L.

Thomas of Gresford, L.

Thomas of Winchester, B.

Tope, L.

Tordoff, L.

Trefgarne, L.

Trimble, L.

True, L.

Trumpington, B.

Tugendhat, L.

Tyler of Enfield, B.

Tyler, L.

Ullswater, V.

Verma, B.

Waddington, L.

Wakeham, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Warsi, B.

Wei, L.

Wheatcroft, B.

Wilcox, B.

Wilson of Tillyorn, L.

Younger of Leckie, V.

5.13 pm

Amendment 3 not moved.

Clause 2 : Relevant authorities

Amendment 4

Moved by Lord McKenzie of Luton

4: Clause 2, page 2, line 26, at end insert—

“(7) Before promulgating a statutory instrument containing regulations or an order which would fall within section 40(7), the Secretary of State shall publish and consult with relevant persons on a draft thereof.”

Lord McKenzie of Luton: My Lords, this is a rerun of the amendment we moved in Committee concerning hybridity. It was prompted by the report of the Delegated Powers and Regulatory Reform Committee which drew attention to Clause 47 of the Bill relating to regulations under Clause 2. Clause 2 enables the Secretary of State, by affirmative resolution, to include someone as a relevant authority and to make provisions about how the Bill affects them. This is the case even though the regulations might be a hybrid instrument, although Clause 47 requires it to be treated as not being a hybrid instrument. The Delegated Powers and Regulatory Reform Committee made it clear that if the hybrid instrument procedure is not to afford protection in cases of hybridity, there should be another form of protection—hence our amendment concerning publication and consultation.

In Committee, the Minister told us that instances of hybridity will be rare. Indeed, I do not think that we have yet had an example of one. There was, however, acknowledgment that, where they arose, there would be an especially compelling reason for the Government to consult. In response to the Delegated Powers and Regulatory Reform Committee, the Minister reiterated the Government’s acceptance of the need to consult and promised an announcement on Report. We look forward to that announcement and, specifically, to hearing why the commitment should not be carried in the Bill. I beg to move.

5.15 pm

Lord Palmer of Childs Hill: My Lords, from these Benches we also look forward to the Minister giving that information. Although there is worth in

15 July 2013 : Column 563

the amendment, I wonder whether it needs to be in the Bill rather than being done by regulation at some stage in the future.

Baroness Hanham: My Lords, as the noble Lord said, I was sympathetic about his amendment in Committee. It would ensure that if the Government were to bring forward what might amount to a hybrid instrument under the powers in Clause 2, the bodies affected would be consulted before regulations were laid. This, indeed, would need to be through regulations. We do not expect that the need to bring forward regulations would be anything less than rare.

As I said in Committee, we recognise that in these cases there would be especially compelling reasons for the Government to consult. In our previous discussion I referred the noble Lord to our forthcoming response to the DPRRC’s report. We have accepted the committee’s point and informed it that we would announce our commitment, which I am doing, and consult affected bodies at Report. We confirmed that this will not entail the need for any amendment to the Bill. I am happy to give that commitment today, and to consult relevant persons on a draft of any statutory instrument containing regulations or an order falling under Clause 40(7) of the Bill. Any such regulation would be subject to the affirmative process, so Parliament would have the opportunity to scrutinise it. In the light of that commitment, I hope that the noble Lord will feel that we have satisfied his requirements.

Lord McKenzie of Luton: I am grateful to the Minister for that commitment which is very clear. I would still prefer to see it in the Bill, but I will not press that point. The answer is clear and I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Clause 4 : General requirements for audit

Amendment 5

Moved by Lord McKenzie of Luton

5: Clause 4, page 3, line 26, leave out “by that authority”

Lord McKenzie of Luton: This is a return, briefly I expect, to a drafting point. Under Clause 4 there is a requirement that,

“a relevant authority … must be audited … in accordance with this Act and … by an auditor appointed by that authority in accordance with this Act”.

The second requirement cannot be met before 2017 at the earliest when the appointments made by the Audit Commission come to an end. It could be three years later if any of these contracts are extended.

The concern is how the general requirements for audit provided for in the Bill can operate before local appointments are operative. I believe that we see eye to eye with the Government on the issue. The Minister’s letter of 25 June states:

“Officials believe that when the provisions are commenced, we will be able to commence different provisions for different purposes and as a result, we will be able to avoid any of the unintended consequences you highlight”.

15 July 2013 : Column 564

I accept that there is flexibility on commencement of provisions but remain unclear as to how this would operate in the circumstances highlighted. Is it being contended, for example, that Clause 4(1)(a) could be commenced before Clause 4(1)(b)? It would be good to have some clarity on this issue before the Bill leaves your Lordships’ House. I beg to move.

Lord Palmer of Childs Hill: My Lords, I would also welcome the Minister clarifying some issues, particularly if there is, indeed, a problem of a practical nature. At present, most local authorities are audited by a professional firm. A fairly small proportion is audited by the commission. Those audited by professional firms will be audited under the continuing contracts until 2017. The local authority will then have the ability to appoint a new auditor. This is what happens in the commercial world. One has an auditor, the auditor audits for a period—generally for the year, in this case for slightly longer—and then there is a new appointment. This is quite the natural way of things. I am not sure—and I hope that the Minister and the noble Lord, Lord McKenzie, will clarify this—why we need to have this because, in a practical sense of the word, auditors are there for a period, they finish their term of office and then they, or another auditor, are appointed. That is the natural way of things whatever we decide or do not decide in your Lordships’ House.

Baroness Hanham: My Lords, first, I confirm that it is possible to introduce different parts of the Bill at different stages, and the order in the Bill can be switched around. I think the noble Lord asked whether Clause 4(2) could be introduced before Clause 4(1) and the answer is that it could—it is a case of whatever is convenient. The Bill introduces powers to commence different parts of the Bill at different times and to make savings on provisions relating to the Audit Commission Act 1998. Therefore, we would expect to commence this reference in line with the introduction of the local appointment, which I think we were discussing when the noble Lord, Lord Christopher, was here.

If the noble Lord wants to know our wider intention of how to manage the overall transition to the new audit framework, it may be helpful if I say a bit more about that. Our intent remains, as I said, to close the commission in spring 2015. The existing audit contracts will continue to run until 2017, but management of those will transfer to an interim body. We have discussed these over the three previous amendments. As the contracts will run until 2017, authorities will not need to make their own appointments until that stage, but they will have to have made those appointments so that there is a smooth transition between the contracts currently managed by the Audit Commission and whoever manages them subsequently, into the local authority’s own regime. We therefore expect that much of Part 3 of the Bill, which deals with local appointment, will not be commenced until closer to 2016, which then gives them a year to do that. It will be 2016 when procurement of auditors for 2017 is likely to begin.

The current intention is that the new eligibility and regulatory framework and provisions on the conduct of audit will come into effect immediately following

15 July 2013 : Column 565

the closure of the commission in 2015. It is our intention to make arrangements to enable us to do this under the powers in the Bill, subject to analysis of the transitional arrangements—again as we have discussed, there have to be transitional arrangements—that may arise.

Lord McKenzie of Luton: I missed the Minister’s first point. Would she mind repeating the beginning of that sentence?

Baroness Hanham: It is our intention to make arrangements to enable us to do this under the powers in the Bill. Our current intention is that the new eligibility and regulatory framework and provisions on the conduct of audit will come into effect immediately following the closure of the commission in 2015. The provisions will then relate to whatever interim arrangements for the body are in place. I hope that that is sufficient clarification for the noble Lord to withdraw his amendment.

Lord McKenzie of Luton: I thank the Minister for her reply and the noble Lord, Lord Palmer, for his contribution. I say to the noble Lord, Lord Palmer, that my point was not about auditors and succession of auditors but on quite a narrow drafting point. One of the requirements in Clause 4 is that the audit must be undertaken,

“in accordance with this Act … by an auditor appointed by that authority”.

Obviously, until 2017, the auditors will have been appointed by the Audit Commission, and the question is how the system works under those circumstances. I accept the broad point that matters can be introduced at different stages but I am still a little mystified as to how the new framework is to operate from 2015, so long as Clause 4(1)(b) is there—unless that is simply excluded from what is introduced in 2015. Perhaps I should read the record and we might have a further discussion on this in due course if necessary.

Lord Palmer of Childs Hill: Before the noble Lord, Lord McKenzie, sits down, I will just comment on the point about the appointment of the auditor by the Audit Commission. In practical terms, the Audit Commission currently suggests who the auditor should be—for example PricewaterhouseCoopers, or Grant Thornton, which has a large number of these audits. The local authority is the one that appoints the auditor, under its own constitution, although it accepts in practice the auditor that has been put forward by the Audit Commission—whether it is the Audit Commission itself or a professional firm. I would have to go back to the constitution but, as I understand it, the local authority has a constitutional duty to appoint an auditor, which it currently does on “the instructions” of the Audit Commission. However, the appointment cannot be foisted on a local authority, because it is a legal body in itself.

Lord McKenzie of Luton: My Lords, the noble Lord makes an interesting point but my understanding is that the contracts for the audits are with the Audit Commission not with the local authority. If the noble Lord is right, that in fact unlocks this particular

15 July 2013 : Column 566

conundrum: although it is not a contract organised by the Audit Commission, if it is nevertheless an appointment by the authority, then I think the problem goes away. With respect to the noble Lord, I do not think that is the position but we might just follow up on that. Having said all that, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Clause 7 : Appointment of local auditor

The Deputy Speaker (Lord Geddes): My Lords, before calling Amendment 6, I should point out that there is a mistake on the Marshalled List. It should read: “Page 5, line 28”.

Amendment 6 not moved.

Amendment 7

Moved by Baroness Hanham

7: Clause 7, page 6, line 7, after “jointly” insert “in relation to some or all parts of the accounts;”

Baroness Hanham: My Lords, in moving Amendment 7, I will also speak to Amendment 8, which between them make small changes to Clause 7. These amendments enable two or more auditors to be appointed to exercise jointly one or more functions and enable a different auditor to be appointed to act separately to undertake one or more functions. The noble Lord, Lord McKenzie, first raised this issue by tabling two amendments in Grand Committee, which would have enabled auditors appointed jointly to issue advisory notices or to seek judicial review either individually or jointly.

I said that we would consider the drafting of Clause 7 to check that it provides the desired level of flexibility for auditors to work jointly and individually. The two amendments that we are bringing forward are a result of those deliberations and give relevant authorities greater flexibility in the way in which they can appoint more than one auditor. Authorities will of course be able to appoint just one auditor. Alternatively, they will be able to appoint more than one: jointly, to exercise one or more functions; separately, to undertake different functions or different parts of the accounts; or some combination of those. We consider that it will very rarely be the case that authorities wish to appoint more than one auditor to act jointly throughout the whole audit. However, where they choose to do so, the auditors must act jointly. The clause already enabled auditors appointed separately to undertake some functions jointly if those functions overlapped, but it did not allow auditors to be appointed with the purpose of undertaking some functions jointly and others separately. I am grateful to the noble Lord for raising this matter. I hope that the amendment will enable a more flexible approach, and I beg to move.

5.30 pm