The noble Baroness and the noble and learned Lord asked about how the aid budget will be used to support local authorities in their efforts to assist the refugees when they arrive, and there were questions about the use of reserves. The use of the aid budget to support refugees who are given support in the UK is compliant with the rules on the use of that budget. As to whether we would use reserves to do more in this area, the Chancellor will return to this when he looks at the spending review. It is important to stress that the aid budget will increase, in monetary terms, because our GDP is increasing. As I said in the Statement, this will be used to greatest effect where we feel we can make the most positive impact. There will be discussions with the devolved assemblies, via the committee to which I have already referred.

My right honourable friend the Prime Minister spoke today to Chancellor Merkel about what he was going to announce in Parliament and she gave her support

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to our measures. The British Home Secretary was one of the early voices calling for the meeting of European Justice and Home Affairs Ministers which will take place next week and will look at this matter again. I made it clear in the Statement that the UK is not a party to Schengen and that we believe our approach is the right one. In answer to the specific question from the noble and learned Lord, we do not feel it is right to offer refuge in the UK to the refugees who are currently in Europe, but we want to see greater co-ordination within Europe and the countries which operate within the Schengen agreement. We will provide and continue to provide our support to Europe in making sure that its borders are properly policed. The noble and learned Lord asked a specific question about how the rules would apply to refugees when they arrive in this country. The same rules that exist now will apply.

I am grateful to the noble and learned Lord, Lord Wallace, for his comments about the Attorney-General, his approach to his judgment and its being compliant with international law. The noble and learned Lord and the noble Baroness asked about publication of the Attorney-General’s advice. As the noble and learned Lord acknowledged, it is not our practice to publish that advice. He also asked me whether we would publish a statement on the general legal position. There is a distinction to be drawn between when we published the legal position that was informing our proposal to take military action in Syria and Iraq, and this occasion when we are informing Parliament of action that was taken to deal with a planned counterterrorism atrocity. A distinction is to be drawn there, but I certainly will look at that.

The noble Baroness asked about the person in question and what distinguished them from others who may be proposing terrible attacks in the United Kingdom. The point to emphasise is that this person was operating in a place where we had no other option as regards the action that we decided to take. We are clear that that action was legal, proportionate, legitimate and the right thing to do.

The noble Baroness and the noble and learned Lord asked about scrutiny. By making this Statement and by making himself available to answer questions today, the Prime Minister is being held to account and is subject to some scrutiny. Further scrutiny that might apply—whether that be by the Intelligence and Security Committee or the independent reviewer—is something that we would want to consider. Certainly, we accept that we have undertaken action which is new and has not happened in this way before. Therefore, it is understandable that Parliament will ask questions about the scrutiny of this action.

Lord Ashton of Hyde (Con): My Lords, the noble Baroness, Lady Smith, and the noble and learned Lord, Lord Wallace, mentioned that the time limit for Back-Benchers has been extended from 20 minutes to 40 minutes. That is to allow more questions and is not an excuse to make speeches. I remind noble Lords that the Companion is very clear that,

“brief questions from all quarters of the House are allowed”,

and that a Statement,

“should not be made the occasion for an immediate debate”.

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5.33 pm

Lord Dubs (Lab): My Lords, in the summer of 1939, I came to Britain by good fortune on a Kindertransport. At that time, Britain was the only country taking children who came in that way. It showed enormous generosity, which is not being equalled by what the Government have announced today. Will the Government show greater generosity, both in the number of vulnerable people this country accepts and in ensuring that those who come here are given the same welcome and wonderful opportunities that I have had?

Baroness Stowell of Beeston: Clearly, the noble Lord is a great example of this country’s generosity and of the great contribution that people who have arrived here as refugees can make to this country. I do not accept his description that the Government, in the actions that they have set out today and have taken over the past few years in Syria, are not equalling what they have done in the past. This country has given a huge amount and will continue to do so. The noble Lord is right to emphasise children in this context but it is also right for me to remind the House, and to refer to the comments I made in the Statement, that we will be led very much by advice from the UNHCR. It would argue that in many cases it is not always the right course of action to give refuge to unaccompanied children and that sometimes it is better for the children to remain in the countries in which they are being looked after, rather than being given refuge somewhere else. We will be driven by the experts in this matter.

Baroness Chalker of Wallasey (Con): Will my noble friend draw the Secretary of State for International Development’s attention to the bad conditions, through no fault of the Kurdish people, for those Iraqis who have taken refuge in the Kurdish area of Iraq? They are potentially a further stream of refugees. The conditions in the camps are one of the reasons that so many people have set out to take perilous journeys and cause the great difficulties we have within Europe at present. While I welcome the Statement, it is not enough to look just at what has happened in Syria and the camps that have taken Syrians. We have to look at the whole area. There is certainly capacity to disrupt those camps, which causes other people to flee.

Baroness Stowell of Beeston: I am grateful to my noble friend and I know how much she does to support refugees. She is very experienced in international aid and assistance. While Syria is the priority, we do not give refuge just to Syrians. There are refuge programmes, of which this country is proud, which ensure that others from other countries get assistance, but we are giving priority to those to whom the UNHCR says we should give priority at this time.

Lord Wright of Richmond (CB): My Lords, I welcome the extent to which we are increasing our help for Syrian refugees. Is it not time, however, for us to put our considerable diplomatic weight behind serious attempts, with our European partners, to find a political solution to the Syrian crisis that might ultimately enable many of these migrants and asylum seekers to return to their homes? Should we not now accept that

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there can be no political solution to the Syrian civil war without the involvement of the regime in Damascus? Should we not be telling our Saudi, Gulf and Turkish allies that there are more important priorities than regime change in Damascus? Is it not time to accept that both the Russians and the Iranians can play an important part, not only in encouraging Damascus to work for a political solution but in helping the regime to confront ISIS, which has tragically occupied large swathes of Syria’s sovereign territory? Is there any logical reason why the Russians, who still enjoy a treaty of friendship with Damascus, do not have a right equal to that of the western coalition to protect their own interests in Chechnya and central Asia?

I note that the Statement describes the Syrian refugees as fleeing the terror of Assad and ISIL. We ought to consider more closely the differing objectives of our coalition allies in arming and supporting the Syrian rebels, whether it is the removal of Assad’s Government, part of a wider Sunni conflict or attempts to destroy the PKK. Is continuing our present policies seriously in our national interest?

Baroness Stowell of Beeston: The noble Lord has covered a lot of ground in that contribution. Briefly, I would say that he is, of course, right that there has to be a political solution to the crisis in Syria. We agree that that requires the involvement of many, many actors in that region and other powerful regions around the world. I do not agree with his assessment of Assad. As he may recall from my responses to questions on previous Statements before the Recess, the UK is in dialogue with the Russians in order for them to use what influence they have over Assad, but we are very clear that the way in which we progress will not be one in which we are willing to work with Assad.

Lord Ashdown of Norton-sub-Hamdon (LD): My Lords, I wonder whether the Minister realises what a discreditable attempt at press management it is to bring these two Statements together to us this afternoon. On the question of refugees, may I ask her to confirm what I think she said a moment ago—that any child or orphan brought in under this scheme will, as is the case under present legislation, be deported at the age of 18? That is what she seemed to say. Is that correct? And can she please explain the logic whereby the Government say that they will help refugees who are already housed and secure, and already being fed, in refugee camps outside Europe, but will do nothing for refugees who are desperate, and in some cases dying, for want of those things inside Europe? Is the difficult thing, which the Government cannot say, the words “inside Europe”?

Baroness Stowell of Beeston: I am not going to dignify the noble Lord’s comments about press management with a response. In response to the specific questions he asked, the point I was trying to make about the way in which we will support refugees who come to us who are children is that there is a clear legal framework that applies when people arrive here as refugees, which includes, after so many years, people being entitled to residency in the United Kingdom. I am not suggesting that there is a new set of rules, or a

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change to existing rules, because of this expanded refugee programme at this time. As for those seeking refuge who have already arrived in Europe, I agree with the noble Lord that we have seen harrowing evidence of suffering not just over the last few days but over the last few weeks, but we are very clear in our mind as a Government that the best policy is the one that we are pursuing: to support people in Syria and to offer refuge to those in the camps in the countries on the borders of Syria, in order to prevent more people risking their lives by crossing the Mediterranean to seek refuge. We really believe that that is the right way forward.

The Archbishop of Canterbury: I warmly welcome this start in the response of domestic hospitality, which comes in addition to the very considerable work that we have done overseas through the overseas aid budget and the work of the Royal Navy. It is on that basis that, challenged by this, the churches, starting this morning, are working urgently to add to what they have already been doing locally, and to work together to achieve and support a coherent, compassionate and credible public policy. I have spoken today to Cardinal Nichols about this. Does the Minister accept, however, that 20,000 is still a very slim response in comparison both to the figures given by the UNHCR and the European Commission, and to the other needs we see, and that it is likely to have to rise over the next five years, unless of course the driver, which I hope she accepts is local conditions in the camps, is dealt with significantly? Does she also accept that within the camps there is significant intimidation and radicalisation, and that many of the Christian population, in particular, who have been forced to flee, are unable to be in the camps? What is the Government’s policy about reaching out to those who are not actually in the camps? Finally, does she accept that, regardless of membership of Schengen, a problem on this scale can only morally and credibly be dealt with by widespread European collaboration?

Baroness Stowell of Beeston: I am very grateful to the most reverend Primate for being here today and contributing on this Statement, and for his leadership, and that of other faith leaders, over the last few days and the recent period while we have been observing such terrible scenes. He raises some important points. He described our response as a slim one; he will not be surprised that I do not accept that definition. As I have said, we do not believe that this is just about providing refuge to individuals here in the United Kingdom; we must support people who are in and around Syria and are very much in need, and we have been doing that in a substantial way. No other European country has contributed as we have over the last few years, and I really believe that we should be proud of what we have done to support people in that part of the world. We want to continue doing so, and we are targeting our aid in that area—using the increase, in monetary terms, in the aid budget because of the rise in GDP—so that we can ensure that, as the most reverend Primate highlights, local conditions in the camps are addressed. As for the Christians being among those who are most in need because they are

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not receiving the support that others are, this is something for us to discuss with the UNHCR. It is important that when the UNHCR considers the criteria for those who are most vulnerable, those should include Christians who are not receiving the kind of support that others may receive.

Lord Anderson of Swansea (Lab): My Lords, since the Prime Minister’s harder line last week, we have seen the tragic photographs of that drowned little boy. Recalling that his family fled from Syria to Turkey and were trying to get to Greece rather than go into a camp, will the Minister confirm that that family would not have been helped in any way by this Statement? Secondly, does the status of the five-year humanitarian protection visa mean that people would be in danger of being deported at the end of the five years, if conditions were to change? Does that accord with our obligations under the refugee convention? What is the legal advice on that? Finally, I want to ask about the letter to the President of the UN Security Council that is said to justify action in respect of a named individual. Does that letter just give a bare assertion that this man was planning action, or has planned action, against the UK, or was evidence supplied that came from our intelligence services? Clearly it would be wrong for this House to ask for the evidence, but surely there must be some evidence, rather than a bare assertion, if we are to convince the UN Security Council that we are acting in accordance with proper legal principles.

Baroness Stowell of Beeston: I will have to come back to the noble Lord on his last question about the letter to the UN. I am not clear about the specific terms in which a sovereign nation has to inform the United Nations and the detail it is necessary to set out. However, I am confident that we will have complied with the necessary requirements in informing the United Nations. As the noble Lord acknowledges, it is not possible for me to go into the detail of the evidence as that would compromise our security procedures. On his questions about our existing arrangements for refugees, as I am not familiar with the detail of how refugees are supported when they come to the United Kingdom in terms of their status, residency and so on, and as this question has been raised a couple of times, I will place a letter in the Library outlining the situation. However, I reassure the House that the existing arrangements will continue to apply. I am happy to outline that in a letter.

Lord Blencathra (Con): My Lords, has my noble friend seen the reports that ISIL boasts that it will infiltrate thousands of jihadists into the tens of thousands of refugees leaving Syria? Will she therefore give a cast-iron guarantee that we will concentrate our priorities on women, children and the vulnerable, and that they will all be thoroughly screened before coming to this country? Will she therefore treat with extreme caution demands that we take some of the fit and well-fed young men we saw fighting Hungarian police, because it seems to me that, if they are willing to do that, they might not be the best fighters for British values?

Baroness Stowell of Beeston: My noble friend makes an important point. One of the reasons why we believe that the policy we have adopted of giving refuge to

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people via a resettlement programme that includes a very thorough screening process by the UNHCR is the right one is that it offers us a much better assurance that we do not risk people coming to this country to attack us. We cannot have the same assurances in respect of those fleeing Syria who have been accepted through routes adopted by others in the European Union.

Baroness Symons of Vernham Dean (Lab): My Lords, I welcome the Statement’s explicit commitment—

Lord Kerr of Kinlochard (CB): My Lords—

Lord Ashton of Hyde: We cannot all speak at once. It is the turn of the Cross Benches.

Lord Kerr of Kinlochard: The Statement is a Statement, is a Statement, and the Leader has my support and sympathy. There are many things in the Statement with which I agree. However, I am puzzled by what it does not say. In particular, I am puzzled by the noble Baroness’s answers to the question asked by the noble and learned Lord, Lord Wallace, and the noble Lords, Lord Ashdown, Lord Dubs and Lord Anderson. We are saying that we will not help one of the 366,000 people who are now in continental Europe and that had the little boy on the beach at Bodrum lived, he would have been no concern of ours. Unlike our friends in Dublin, who are not bound by Schengen any more than we are but are voluntarily taking some of these tragic refugees, we are saying that we will take not one of them, however awful their case, and that is what we will say at the European Union meeting this week. Are we sure that reflects the spirit of the country? Are we sure that is in the national interest? Are we sure that a little magnanimity might not come in handy?

Baroness Stowell of Beeston: My Lords, I am clear that we as a nation have decided that the best way of supporting—

Noble Lords: The Government have—

Baroness Stowell of Beeston: If your Lordships prefer, I will say “Government”. This democratically elected Government have decided that this country will support those in need through the approach that I have outlined. Indeed, that has been our policy for a considerable time. We have given refuge to 5,000 people from Syria since the crisis started. Alongside the refuge that we are offering, we have made a huge contribution to support those people affected by this crisis in the region. That is not something that can be said about all the other member states in the European Union. We think that our approach is the right one for the refugees, and the right one in the long-term interests of achieving stability in that area and supporting people in need.

Lord Wallace of Saltaire (LD): My Lords, I regret deeply the absence of any reference in the Statement by the Government to co-operation with other countries.

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At least in July before we rose, the Prime Minister’s Statement referred to the need for Britain to operate within a broad international coalition. Does not the noble Baroness accept that this is a common problem that we share above all with our neighbours on the European continent and that there has to be common action, particularly European action? Does she not accept, for example, that what is happening in Calais, which directly affects us, is part of this same movement of peoples across Europe; that we depend on co-operation with the French and others in this respect; and that co-operation, not unilateral action by Britain alone, is where we have to take things forward from here?

Baroness Stowell of Beeston: The noble Lord makes a good point about Calais. Clearly, we have co-operated with the French over the summer to address the situation that worsened earlier in the summer. The Home Secretary was one of the Home Affairs and Justice Ministers who called for the meeting that will take place next week because we think it right that Europe should co-operate more. However, those within the Schengen agreement are not operating in a co-ordinated, coherent way. We want to support them but we are very clear that we do not believe it is in the best interests of this country or those who are most in need to join the action that has been taken by other member states. We are co-operating all the time with our partners in Europe by helping them strengthen their operations on the borders and trying to provide them with the expertise they need. However, in the end they have decided that they want to pursue the course they are following. We believe that by pursuing that course they are increasing the flow of refugees from Syria and that is putting people’s lives at risk unnecessarily. We think that a much better approach is the one we are pursuing, which is to provide refuge but to do so for people from the camps directly.

Baroness Kennedy of The Shaws (Lab): My Lords—

Lord Davies of Stamford (Lab): My Lords—

Lord Taylor of Holbeach (Con): My Lords, can we please have order? I am afraid that the noble Baroness, Lady Kennedy, arrived in the Chamber not only after the Statement had been read but also after the contribution had been made from her own Front Bench. In the circumstances she ought to follow the Companion and not speak. It is the Labour Party’s turn and the noble Lord, Lord Davies, is on his feet.

Lord Davies of Stamford: My Lords, on the basis of the admittedly limited evidence that we have, the Government were absolutely right to take a decision to eliminate those three terrorists. I think that in similar circumstances they will have the support of almost the whole country in taking action when it is necessary and clearly called for in instances of that kind.

Is it not the case that we badly need a debate on refugees, not just a Statement, not least because of the longer-term consequences and almost certainly a great increase in the number of refugees and immigration

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applicants from all sorts of places as a result of the drama of the last few weeks? Is it not however, sadly, really rather nauseating for the Prime Minister to congratulate himself on a policy of “extraordinary compassion”—that is the phrase used in the Statement this afternoon—when, in fact, we are taking none at all of the refugees from Syria who are currently on the move? We are taking only up to 20,000 over five years. Have not the Germans, who have undertaken to take 800,000 almost immediately, thoroughly put us to shame on that? Is there not also the rather unpleasant sense that on this very important issue, as in so many others, the Government’s policies seem driven by a PR agenda? Ten days ago when immigrants or refugees were bad news generally in many people’s minds in the Government, the Government were not prepared to take a single new Syrian refugee. Then the media published pictures of dead children on the beach—

Lord Ashton of Hyde: I am sorry to interrupt but can the noble Lord please be brief and ask a brief question?

Lord Davies of Stamford: Is it not very unfortunate that the impression should be given that it is a PR agenda rather than a matter of principle or even a long-term analysis of national interest on which the Government’s decisions in this area have been based?

Baroness Stowell of Beeston: As regards the noble Lord’s request for a debate, my noble friend the Chief Whip has already scheduled time for a debate on the humanitarian situation. That is scheduled for a week on Wednesday. Regarding the other points made by the noble Lord, I can only repeat what I said before. This is a policy that the Government have adopted over the last few years. We believe that the contribution we are making to support people in and around that region is significant. It is much greater than any other European country. As far as expanding the refugee programme, the policy remains the same; we are simply expanding it because we see an increased need at this time.

Lord Higgins (Con): My Lords, it is very important that migrants in danger of drowning in the Mediterranean should be rescued. However, at present after being rescued they are then disembarked in the European Union, thereby adding to the number of people coming across the borders. Does my noble friend agree that it is not really compatible with our policy that we should continue to do that, because at the moment the traffickers are able to say, “Don’t worry if the boats look unseaworthy. You’ll be rescued by the navy and taken to your destination anyway”? Therefore, they are encouraged even more to take the risk. More broadly, do we not have a definite interest in the Schengen agreement, which results in the situation in Calais, as has been pointed out? Should we not take a much stronger line in persuading our European partners that they ought—at any rate on a temporary basis—to suspend Schengen because it is not compatible with having external borders that are clearly not effective?

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Baroness Stowell of Beeston: My noble friend remarked on those crossing the Mediterranean. I think we were right to provide assistance via the Royal Navy to those who require rescue from the crossings. However, he raised an important point that I do not think I have yet addressed in response. There are criminals involved in taking advantage of these very vulnerable and desperate people. They are making money out of people in great danger. By following our policy, we are trying to make it clear that there is another way to refuge that does not require the risk. It should also mean, therefore, that we are able to disrupt the criminal behaviour of people abusing the weakness and vulnerability of people.

On my noble friend’s point about Schengen, he is absolutely right that it is very important that the borders of the European Union are properly held and policed and that we, although we are not a member of Schengen, should do all that we can to make sure that those borders are strong. That is where we make a very strong contribution, have done for a long time, and will continue to do, because we do not think that Europe is doing all that it should in maintaining its borders.

Baroness Symons of Vernham Dean: My Lords—

Lord Green of Deddington (CB): My Lords—

Lord Ashton of Hyde: My Lords, I am sorry to interrupt again. It is actually the turn of the Cross Benches and then we can come to Labour.

Lord Green of Deddington: My Lords, first, I warmly endorse the remarks made by the noble Lord, Lord Wright of Richmond. Both he and I are former ambassadors in Damascus. We have first-hand knowledge of that country and its regime. We have been long concerned about the Government’s policy towards Syria and we think it is time for it to be reviewed. That said, does the Minister agree that the focus of the debate has been entirely on refugees, which of course is right? However, not all migrants are refugees. We have to keep in mind that a significant number—we do not know how many and we will not know until their cases have been considered—are in fact economic migrants.

It is very important that the actions taken by Governments in Europe and in the UK do not have the unintended effect of causing a very large flow of people into the Union and this country who have no right to be here. Does the Minister therefore agree that this is exactly the wrong moment to cut the resources available to the Home Office and the Border Force to distinguish between genuine refugees and economic migrants? They should be doing the exact opposite. We have a new and major crisis on this whole front and that should be recognised in the way we address it.

Baroness Stowell of Beeston: The noble Lord raises an important point—that not all those arriving in Europe are refugees, and some are economic migrants. That is another reason why we believe that our policy is better than the one that others in Europe are adopting

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because, informed by the specific advice from the UNHCR, we are able to make sure that those to whom we give refuge are not seeking a better life for themselves for only economic reasons while not at immediate risk. Regarding the other points raised by the noble Lord, clearly it is essential that we maintain our borders and that is something that we continue to do.

Baroness Symons of Vernham Dean: My Lords, I would be grateful if the Minister could clarify a couple of points in the Statement. It makes the point that this country has provided sanctuary for more than 5,000 Syrians so far. It goes on to say that we will settle up to 20,000 Syrian refugees over the Parliament. Are we in total proposing to settle 25,000 or are the 5,000 already subsumed in the 20,000 mentioned later in the Statement?

The Statement also says that we will play our part,

“alongside our other European partners”,

and then goes on to say that we will decide our “own approach”. While I did not altogether welcome the tone of the point made by the noble Lord, Lord Ashdown, he does have a very strong point indeed. Surely a child who has drowned on a beach in Europe does every bit as much to excite our compassion as a child washed up on a beach outside our borders. The response of the British public in the last 10 days or so has shown that actually people are not that concerned whether we are taking people solely from the refugee camps pinpointed in the Statement. Surely it is right that if we really are demonstrating compassion we extend it to people who are suffering every bit as much in the countries of Europe of which we are a part. I hope the Minister can assure us that that point will be kept under constant review and that the Government will keep listening to what the British people say about this, because I for one do not believe that the Government have quite got the message yet.

Baroness Stowell of Beeston: I can confirm for the noble Baroness and the House that the 20,000 mentioned in the Statement are in addition to the 5,000 refugees that we have already given sanctuary to, so that number will not be absorbed into the 20,000. As far as her other comments are concerned, I agree that the people of this country do not draw a distinction when looking at the plight of people in desperate need. We are all moved by those in need of help and support, and by the tragic circumstances of those who have sought refuge and, on the way, have lost their own children. But alongside their not drawing a distinction between where people are coming from, at the same time, what people in this country look for—and what we as a Government are trying to do in our response to this situation—is for us to combine two simultaneous requests from the public. They are that we show our compassion by providing support for people in desperate need but do so in a way which is well organised, is actually sustainable and, in the long term, will not make matters worse; and that we have a policy that will ultimately help to bring an end to the situation causing all this desperation. I think that they look for something which is comprehensive, and that is what we are trying to deliver.

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Baroness Bakewell of Hardington Mandeville (LD): My Lords—

Lord Boateng (Lab): My Lords—

Lord Deben (Con): My Lords—

Lord Ashton of Hyde: It is the turn of the Liberal Democrats.

Baroness Bakewell of Hardington Mandeville: My Lords, as we have already said, many local authorities up and down the country have been preparing contingency plans to assist them to make room for the refugees. Many of these local authorities have growing lists of residents who are in temporary accommodation but are nevertheless willing to help. All local authorities should be able to say how many refugees they will accept, and central government must say what it will do to make sure that the refugees get the funding needed. Will the noble Baroness say in what way the Syrian refugees are to be dispersed throughout the country and how their children are to be integrated into our schools and education system?

Baroness Stowell of Beeston: The discussions between central government and local government are only just starting, although there is already very much a partnership in place with those local authorities that have been giving assistance and refuge to those whom we have already helped over the last few years. I assure the noble Baroness that we will work with the local authorities and, as I say, adopt a partnership approach.

Lord Boateng: My Lords—

Lord Deben: My Lords—

Lord Ashton of Hyde: My Lords, we have very little time. It is the turn of the Conservatives.

Lord Deben: Does my noble friend accept that the words of the most reverend Primate the Archbishop of Canterbury, remarking upon the fact that many Christians cannot stay in the camps because of intimidation, mean that the policy of the Government, which may be logical in every way, ought to be reconsidered in such a way that we can take those refugees who have had to leave the camps and find themselves on the continent of Europe? To refuse to do that would not represent or respect what the British people want.

Baroness Stowell of Beeston: My noble friend heard what I said in response to the most reverend Primate and I do not really have anything to add to that. I have tried in my responses today to demonstrate that the Government are providing refuge to people in desperate need. We are building on a programme of support that has been extensive and very much at the forefront of what else is being provided by other members of the European Union. We will continue to do all that we can. I am sure we will continue to discuss this on other occasions, and I very much look forward to that.

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Energy Bill [HL]

Energy Bill [HL] 6th Report from the Delegated Powers Committee,4th Report from the Constitution Committee

Committee (1st Day) (Continued)

6.15 pm

Clause 5: Directions: national security and public interest

Amendment 12

Moved by Baroness Worthington

12: Clause 5, page 3, line 35, at end insert—

“( ) are necessary in order to inform the OGA’s role in developing and promoting carbon storage,”

Baroness Worthington (Lab): My Lords, thank you for returning to Committee. Amendment 12 in Clause 5 relates to the Secretary of State’s abilities to give directions to the Oil and Gas Authority. Again, I fear that we are now retreading familiar territory in our discussion of the Bill and some of the concerns that we have with it. The amendments in this group are probing and designed to give the Minister an opportunity to respond on how he considers that these powers might be used by the Secretary of State. We revisit the two issues that we talked about earlier today, which are that the Oil and Gas Authority should have explicit mention of carbon storage and transportation in its objectives and in the matters to which it has regard. For consistency’s sake, we therefore believe that the Secretary of State should also have those powers.

The purpose of these amendments, particularly Amendments 12 and 14, which are in my name, is to ask the Minister whether he could give us a little more information about the circumstances under which he envisages the Secretary of State needing to use these powers. Perhaps he could also give us an example of what kind of direction he imagines the Secretary of State might be giving the Oil and Gas Authority in relation to its functions under these powers. There is clearly not much in the public domain to help me get a handle on the thinking behind Clause 5, so it really would be an illuminating contribution from the Minister if he were able to give us some examples of the circumstances, particularly the exceptional circumstances referred to in the Bill, and the examples of direction.

We had a discussion prior to the break about the primary purposes of the OGA. I remain convinced that there is a clean and very succinct way of doing this, which is to refer to the Oil and Gas Authority’s primary objectives and to include within them explicit reference to activities that go beyond maximising economic recovery, as it is perhaps formally or informally understood. At the moment, it is interpreted as meaning that we will extract the maximum volume of hydrocarbons from our natural resources which fall within our territorial waters offshore, and indeed onshore. But it may be that that definition of MER, while it still of course has cross-party support, needs to be revisited and revised.

In the previous discussion, we saw reference to new matters to which the OGA should have regard being added to Clause 4. The Minister’s response in that debate was that there is no need to be explicit about these matters and that climate change is taken care of elsewhere, as indeed is the need to decarbonise and

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CCS. But if that logic were to apply, it is the case that one of the matters stated in Clause 4 is the need to have regard to a secure supply of energy, so if we are being true to ourselves and saying that we should have a narrow focus for the OGA and do not need to reiterate these things, there is no need for any reference to security of supply in that part of the Bill either. However, I do not think that is correct. Indeed it was helpful that the noble Lord, Lord Deben, who is no longer in his place, made reference to the fact that to avoid doubt it is always better to be explicit about these things, for fear that people with slight imagination —he used that phrase but perhaps it should be “lacking in imagination”—might mean that there is a narrow interpretation of what the OGA is created to do and what is within its powers and remit.

That is a very lengthy way of saying that we look forward to hearing more from the Minister on Clause 5, which is clearly an important part of the Bill. However, as I read it, I am left wondering what these exceptional circumstances are and what these directions could look like. I look forward to hearing from the Minister in his response. I beg to move.

Lord Whitty (Lab): My Lords, I have two amendments in this group, but I also want to apologise to the Committee because, due to my attendance at my Select Committee, I was unable to be here for the previous debate, during which, as my noble friend said, the case was made for ensuring that the OGA—while it may well have principal objectives—has to operate in the context of wider energy policies. Issues of climate change, energy security and affordability are relevant to how the OGA fulfils its main functions. Indeed, if its main function is in terms of maximum economic recovery, what happens on those other dimensions of energy policy affects the actual economics in MER. Therefore, it is important that the OGA, as set out in the earlier clauses, has some regard to those broader objectives of energy policy. It is also important that the Secretary of State can intervene in those areas.

Amendment 13 would allow the Secretary of State to give directions where it would be necessary to meet the terms of the Climate Change Act and the budgets promulgated under that Act. Amendment 15 relates to the Committee’s discussion before the break about carbon capture and storage, so that directions could relate explicitly to the storage of gas and oil and the storage of carbon dioxide as part of a carbon capture and storage scheme. The amendments previously discussed relating to Clause 4 need to be complemented with the ability of the Secretary of State to intervene on those same subjects. That is what these amendments would do.

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con): My Lords, I shall speak to the amendments in this group and I thank noble Lords who have participated in the debate for speaking to their amendments. Amendments 12 to 15 relate to Clause 5 of Part 1 of the Bill, which concerns directions the Secretary of State may give to the Oil and Gas Authority. As the noble Baroness, Lady Worthington, said at the outset of our consideration in Committee, most of what we are looking at in the non-government amendments relates to carbon capture and storage.

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That is certainly a point well made. As I have indicated, we have undertaken that we will look at the issues relating to carbon capture and storage prior to Report.

As has been said, Clause 5 gives the Secretary of State power to direct the Oil and Gas Authority in the exercise of its functions if the Secretary of State considers the directions in the interest of national security or otherwise in the public interest. The noble Baroness, Lady Worthington, asked for examples of that and I will try to provide a couple. First, if a licence is applied for by a person who is suspected of corruption and whose possession of a licence the Secretary of State thinks would lead to reputational embarrassment or political damage to the United Kingdom, the intention is that the Secretary of State should be able to direct the Oil and Gas Authority not to issue a licence to such a person.

Secondly, another instance may be if there are other competing uses for a particular area of the seabed in respect of which the Oil and Gas Authority may grant licences. The intention then is that the Secretary of State should be able to give a direction to the Oil and Gas Authority as to over which areas it should or should not exercise its licensing powers so as not to prejudice those other uses.

Finally, another example may be that the Secretary of State should be able to direct the Oil and Gas Authority not to grant further consents for development in the face of public concern about the scientific evidence in relation to the methods used or a change in government policy. Clearly, that is not an exclusive list but those are some situations that may be covered by it.

The amendment makes it clear that the power in Clause 5 can extend to the Oil and Gas Authority’s functions in relation to the carbon capture and storage sector. We believe that it is unnecessary to do this because the Secretary of State’s power to give directions to the Oil and Gas Authority as to the exercise of its functions already applies to the carbon capture and storage sector in so far as it is in the ambit of the Bill.

Baroness Maddock (LD): I thank the Minister for allowing me to ask a question on this issue. At Second Reading I asked how much the Government had looked at the way Norway had organised its oil and gas industry. When Norway looked at these areas, I wondered how far it looked at carbon capture and storage and whether we have learnt anything from that in relation to what we are discussing at the moment.

Lord Bourne of Aberystwyth: I have no direct knowledge about lessons we have learnt from Norway, but I can certainly reassure the noble Baroness that we look closely at the Norwegian experience and the Canadian experience of carbon capture and storage. If I may, I will drop her a line on that and copy it to other Peers who have participated in today’s debate.

We believe this amendment is unnecessary as the Secretary of State’s power to give directions to the Oil and Gas Authority in the exercise of its functions already applies to the carbon capture and storage sector, as I have said. On that basis, we do not see the need for this amendment. Similarly, Amendment 15 makes it clear that the Secretary of State’s directions

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to the Oil and Gas Authority may include requirements on the development of storage facilities for gas and oil, or storage of carbon dioxide, as part of a carbon capture and storage scheme. Once again, the Secretary of State’s functions of licensing the storage and unloading of gas and the storage of carbon dioxide are being transferred to the Oil and Gas Authority by the Bill. As such, the Secretary of State’s power to give directions to the Oil and Gas Authority in the exercise of its functions already applies to these sectors. Were additional functions to be added to the Bill, they, too, would be covered by this provision and an amendment would not be necessary.

Turning to Amendments 13 and 14, the Oil and Gas Authority will be established formally so that it is an effective, robust and independent regulator. As part of this, it will deliver on the strategy to maximise the economic recovery of petroleum from the United Kingdom continental shelfs. The Oil and Gas Authority is purposely not an environmental regulator and environmental regulation will continue to sit within the Department of Energy and Climate Change, which has the expertise and experience in this field. There are synergies between the two forms of regulation and the existing strong relationship between the Oil and Gas Authority and the department will continue. The department will continue with its vital mission of seeking secure and diverse energy supplies, including renewables, nuclear and indigenous resources. The United Kingdom has adopted ambitious climate change targets, committing us to an 80% reduction in emissions from 1990 levels by 2050. Emissions are already down by 29% on those levels.

As I indicated on a previous amendment that was brought forward on environmental concerns, these amendments also raise issues of compliance with the offshore safety directive, which is legally enforceable against us. This requires a separation of oil and gas licensing from environmental functions. So it may not be legally possible to do this either.

6.30 pm

Lord Whitty: I do not believe that either my amendment or the other amendments intend to designate the OGA as a drafter or an enforcer of environmental legislation. They seek to ensure that anything the OGA does will not jeopardise—preferably, they would further—the broader objectives of the Government. This does not mean that it is a regulator; rather, that the Secretary of State would have the ability to intervene if some of the economic decisions taken by the OGA jeopardise its legal obligations under the domestic climate change Acts, or indeed jeopardise its international legal obligations under EU or any global climate change agreements. We are not arguing that the OGA should be an environmental regulator.

Lord Bourne of Aberystwyth: I am grateful to the noble Lord for that clarification. We will have another look at the position, and indeed I am probably using the term “environmental regulator” in something of a shorthand sense. We have legal concerns on this, but I undertake to take a second look and possibly we will come back to it on Report.

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In the light of my comments and the undertakings that I have made previously, I respectfully ask the noble Baroness to withdraw the amendment.

Baroness Worthington: I thank the Minister for his reply and my noble friend Lord Whitty for his contribution to the debate. It is helpful to have specific examples of when the Secretary of State may need to take powers to direct the OGA. I have to say, though, that they do not really reassure me. I should like to read Clause 5 again in more detail because it seems that when it comes to the licensing of activities, competition and scientific evidence, it will give the Secretary of State quite a high degree of enabling power. I wonder whether the process as outlined in the Bill, which is just to notify Parliament with no debate, is sufficient in the circumstances. I could fast forward and imagine a time when there might be a part of, shall we say, a constituency which may not wish to have a particular oil and gas activity taking place. It might suit the Secretary of State to exclude that objection, and in these circumstances it seems that the Secretary of State could simply ask the OGA to do so without any debate about it.

The examples are helpful and it may be something we come back to on Report. However, before I withdraw the amendment I should like to reiterate my point that if we are going to take the line of defence that the OGA is narrow and does not need to have all these matters cluttering its mind, this seems to be a situation where it is being expected to have some sort of regard to security of supply, even though it is not a security of supply expert any more than it is a climate change expert. In terms of the trilemma, which we all know and love, of energy security, affordability and decarbonisation, to make explicit reference to security of supply in Clause 4 but not to affordability or climate change issues seems to suggest that one leg of the stool is more equal than the others. Again, we will probably want to come back to that, even if it is just to take out the reference to security of supply, which might be the most obvious solution.

At this stage I am happy to withdraw the amendment, but as I say, I will read Clause 5 with a greater degree of understanding and scrutiny now that we are back from the Recess. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendments 13 to 15 not moved.

Clause 5 agreed.

Clauses 6 and 7 agreed.

Amendment 16

Moved by Lord Bourne of Aberystwyth

16: After Clause 7, insert the following new Clause—

“Powers of the OGA to charge fees

(1) The OGA may charge fees—

(a) for making a determination under Schedule 1 to the Oil Taxation Act 1975;

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(b) on an application made to it under section 3, 15, 16 or 17 of the Petroleum Act 1998;

(c) on an application of a prescribed description made to it by the holder of a licence granted under—

(i) section 3 of that Act (searching for, boring and getting petroleum), or

(ii) section 2 of the Petroleum (Production) Act 1934 (licences to search for and get petroleum);

(d) on an application of a prescribed description made to it by the holder of an authorisation issued under section 15 of the Petroleum Act 1998;

(e) for carrying out or attending any test, examination or inspection of a prescribed description;

(f) on an application made to it under section 4 or 18 of the Energy Act 2008;

(g) on an application of a prescribed description made to it by the holder of a licence granted under section 4 or 18 of that Act;

(h) for the storage by it of samples or information in accordance with an information and samples plan (see section (Information and samples plans: supplementary) (2) of this Act).

(2) The fees—

(a) are to be determined by or in accordance with regulations made by the Secretary of State, and

(b) are to be payable by such persons as the regulations may provide.

(3) The OGA must pay into the Consolidated Fund any amount which it receives in respect of fees charged by it under this section.

(4) Subsection (3) does not apply where the Secretary of State, with the consent of the Treasury, otherwise directs.

(5) Where in relation to any matter the OGA has a function mentioned in subsection (6), that function is treated for the purposes of this section as carried out pursuant to an application made to the OGA (whether or not there is any requirement to make such an application).

(6) The functions are—

(a) extending the term of a licence;

(b) giving its consent or approval in relation to any matter;

(c) objecting in relation to any matter.

(7) The Secretary of State must consult the OGA before making regulations under this section.

(8) In this section “prescribed” means prescribed by regulations made by the Secretary of State.”

Lord Bourne of Aberystwyth: My Lords, I will now speak to the government Amendments 16 to 19, which relate to the funding of the Oil and Gas Authority, including the provision of payments and financial assistance to the authority. The Oil and Gas Authority will be formally established so that it is an effective, robust and independent regulator of petroleum recovery. As part of this, it will deliver on a strategy to maximise the economic recovery of petroleum from the United Kingdom territorial sea and the United Kingdom continental shelf. The new body will be funded by industry. This is consistent with the user pays principle because industry will be benefiting from the work and expertise of the regulator.

The Oil and Gas Authority is providing a range of services to industry. These services include the issuing of licences as well as issuing relevant consents and permits, for example, to begin petroleum production. It is correct and in compliance with the Treasury’s Managing Public Money remit that the costs of these

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services should be recovered via direct fees rather than via the general levy. This will ensure that only those who require and benefit from the service will bear its costs.

Amendment 16 inserts a new clause into the Bill which will ensure that the costs of the relevant services provided by the Oil and Gas Authority may be recovered via a direct fee. Details of the fee mechanism and the method of calculating the full cost of the service will be set out in regulations. Amendments 17 and 18 insert new clauses allowing the Secretary of State to make regulations providing for a levy on industry to meet the costs of the authority; that is, the indirect costs of administration and so on. These new clauses are in similar terms to the levy provisions set out in Section 42 of and Schedule 7 to the Infrastructure Act 2015, but they reflect the fact that the functions will be carried out by the Oil and Gas Authority as a government company rather than as an executive agency, where in law the functions are with the Secretary of State. We thought it would be more helpful to those using the legislation to find the levy provisions in this Bill, and I hope that noble Lords are reassured by that. The noble Lord, Lord Oxburgh, who is not now in his place, and the noble Baroness, Lady Liddell, both referred to the need to simplify access to some of the provisions in this area, so I hope that the fact that they will all be contained in this Bill rather than in the Infrastructure Act 2015 is helpful.

To allow the regulator to recruit and retain the best candidates, particularly those with specialist experience, we need to ensure that the regulator has financial flexibility and sufficient funding. Amendment 17 enables the Secretary of State to provide by regulation for a levy on the holders of specified licences. The levy will fund the costs of the regulator, but it must not exceed the costs incurred in carrying out the relevant functions. The amendment also allows the levy to be imposed to cover the costs of the Oil and Gas Authority exercising its functions, including those relating to the new powers we are conferring on it, such as dispute resolution, data acquisition and enforcement. Amendment 18 sets out illustrations of the way in which the levy power may be exercised. This is in similar terms to Schedule 7 to the Infrastructure Act 2015. Regulations will set out the detail, including the amount payable by different categories of licence holders. Just by way of explanation, it is intended that those licence holders who are actually exploiting the area will be paying more than those who have not yet taken up the opportunity.

Some consequential amendments to the schedule are necessary, such as Amendment 42, which amends the schedule to the Bill to remove the levy provisions from the Infrastructure Act 2015 as set out in Section 42 of and Schedule 7 to that Act. These amendments are covered separately with Amendment 1, which seeks to amend Clause 2, which introduces the schedule. In fact the amendment has already been dealt with, so I fear that my notes are out of date.

I turn now to Amendment 19, which provides a general power for the Secretary of State to make payments and provide financial assistance to the Oil and Gas Authority. The power is not restricted to the specific functions of the authority, and therefore payments may be made at the discretion of the Secretary of State to fund any of its functions. As well as covering

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statutory functions, it will cover those which are contracted out to the Oil and Gas Authority. The authority will be funded through a levy on the holders of certain energy industry licences and by fees which will be paid for the carrying out of particular services. The Secretary of State may also need to provide funds to the authority to cover any unforeseeable events. The amendment will allow the Secretary of State to provide financial assistance to the Oil and Gas Authority in the form of grants, loans, guarantees and indemnities. I beg to move.

Baroness Byford (Con): My Lords, first, obviously the details will be set out in the regulations. Does my noble friend have any idea when those regulations may be available, or if they are available already? That would be helpful to us in our discussions as we go through the Bill. Secondly, I particularly welcome the flexibility that has been given to the Secretary of State to make payments which might unexpectedly be needed. Having that sort of provision makes good sense.

Baroness Worthington: My Lords, I thank the Minister for his introduction of these government amendments and the noble Baroness, Lady Byford, for her contribution. However, I disagree with the noble Baroness slightly on her last comment. It may be necessary for the Government to make financial support available, but I worry that that creates yet another unbounded public spending commitment, and I know that the noble Baroness is very keen to try to constrain such commitments, as are the Government. I question the need for government Amendment 19, but at this stage I am not sufficiently briefed to know how extraordinary these clauses are. Maybe this is a very common thing, and we always create these abilities to give grants to quangos with no further detail, but perhaps we do not. I would be very grateful if the Minister could provide a bit more context, when he replies, about the need to provide for grants, loans and other financial provisions.

I ask because I am concerned about the growing costs of decommissioning, which we have talked about in previous debates. Similarly, I am slightly nervous about unbounded liabilities on the public purse at a time when so many people are being asked to tighten their belts. The profits of the offshore oil and gas industry are well known, and it would seem odd for it to be given special provision while everyone else is seeing their budgets cut. In particular, I am slightly worried that these unforeseeable events are not defined and that there would be, as I read it, very little in the way of opportunity for debate or questioning of the Secretary of State if such financial provisions were made. I would like further clarity on how much scrutiny there might be on that aspect. Those are the main points at the moment, and I look forward to a response from the Minister.

Baroness Byford: Perhaps I could express myself slightly more fully before the Minister responds. I looked at government Amendment 19 in terms of a national emergency—something out of the ordinary—and I was not quite sure, if it did not come in within the new clause, whether there was another way in which that sort of money can be accessed for the OGA. That was the presumed context within which I raised the

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issue. The noble Baroness is quite right that I am very keen to make sure that the Government live within their means. However, there are times—as we have seen in the international field when we have had major oil spills or something has gone really wrong—when emergency money has to be made available and I wondered whether that was within the context of the new clause in Amendment 19.

Lord Bourne of Aberystwyth: My Lords, I will try to address the points raised by the noble Baroness, Lady Worthington, and my noble friend Lady Byford. The first was about when the regulations for the charging regime will be laid. They will need to be in force when functions transfer to the Oil and Gas Authority next summer, assuming the passage of the legislation. We have an indication of how much the levy will cost industry and the distinction to be made between those that are currently exploiting oil and gas fields and those that are not. The cost of the levy for the first six months for licence holders that are not exploiting is £2,759.30p—which seems pretty precise—and for those that are exploiting, it is £30,422.92p. I am sure we would reserve the right to vary that somewhat, but it gives an indication of how much the levy will cost. I think the regulations relating to the activities that are subject to the direct costs have not yet been laid, but I will restate the point that the aim is to recover the costs: it is not make a profit, but to ensure that the costs are covered. That should provide some reassurance.

The noble Baroness, Lady Worthington, and my noble friend Lady Byford both raised points in relation to Amendment 19, on financial assistance. I think this is intended to cover two situations—if there are others, I will make sure that I deal with them in writing. First, it is intended to cover any shortfall in the levy and charge regime in the short run. I suppose this relates to cash-flow issues and is to ensure that things are kept running. That would presumably be a short-term measure and not involve a great amount of money in the scheme of the authority.

The second point relates to unforeseeable situations. The noble Baroness, Lady Worthington, asked for examples. In a sense, it is difficult to give examples because they are unforeseeable, but it could include some massive oil spillage where immediate funding is necessary or, God forbid, some terrorist incident where money is needed. That is the sort of situation. Those are two examples, but there will clearly be others, as this is about the unforeseeable. The unpredictable nature of the scenarios is clear there, but in addition there is the cash-flow element. I think it is fairly standard in these situations to have something of this nature. I hope that provides reassurance and that I have satisfied the noble Baroness.

Amendment 16 agreed.

Amendments 17 to 19

Moved by Lord Bourne of Aberystwyth

17: After Clause 7, insert the following new Clause—

“Levy on licence holders

(1) The Secretary of State may, by regulations, provide for a levy to be imposed on, and be payable by, one or more of the following kinds of persons—

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(a) persons who hold licences (other than excluded licences) granted under section 3 of the Petroleum Act 1998 (searching for, boring and getting petroleum);

(b) persons who hold licences (other than excluded licences) granted under section 2 of the Petroleum (Production) Act 1934 (licences to search for and get petroleum);

(c) persons who hold licences granted under section 4 of the Energy Act 2008 (unloading and storing gas);

(d) persons who hold licences granted under section 18 of the Energy Act 2008 by the Secretary of State or the OGA (storage of carbon dioxide).

(2) The Secretary of State must exercise the power conferred by subsection (1) so as to secure—

(a) that the total amount of licensing levy which is payable in respect of a charging period does not exceed the costs incurred by the OGA in exercising its functions in respect of that period, and

(b) that no levy is payable in respect of costs incurred in the exercise of functions—

(i) for which fees are charged under section (Powers of the OGA to charge fees), or

(ii) which the OGA is authorised to exercise by virtue of an order under section 69 of the Deregulation and Contracting Out Act 1994.

(3) In determining for the purposes of subsection (2)(a) the total amount of licensing levy payable in respect of a charging period, an amount of levy payable in respect of that period may be ignored if (during that period or subsequently)—

(a) having been paid, it is repaid or credit for it is given against other licensing levy that is payable, or

(b) having not been paid, the requirement to pay it is cancelled.

(4) The amount or amounts of licensing levy payable by licence holders must be—

(a) set out in the regulations, or

(b) calculated in accordance with a method set out in the regulations.

(5) The licensing levy is payable to the OGA.

(6) The OGA must pay into the Consolidated Fund any amount which it receives in respect of the licensing levy.

(7) Subsection (6) does not apply where the Secretary of State, with the consent of the Treasury, otherwise directs.

(8) The Secretary of State must consult the OGA before making regulations under this section.

(9) Section (The licensing levy: regulations) does not limit the provision that may be made by regulations under this section.

(10) In this section and section (The licensing levy: regulations)—

“charging period” means a period in respect of which licensing levy is payable;

“excluded licence”, in relation to a charging period, means a licence that, if granted at the beginning of the period, would fall to be granted by the Scottish Ministers or the Welsh Ministers (and for these purposes a licence within subsection (1)(b) is to be treated as granted under section 3 of the Petroleum Act 1998);

“licensing levy” means the levy provided for in regulations under this section.”

18: After Clause 7, insert the following new Clause—

“The licensing levy: regulations

(1) Regulations may provide for the licensing levy payable in respect of a charging period to increase or decrease over that period.

(2) Regulations may provide for an amount of licensing levy payable by a licence holder to be calculated by reference to the size of an area to which a licence held by that person relates.

(3) Regulations may provide for different categories of licence holders to pay—

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(a) different amounts of licensing levy, or

(b) amounts of licensing levy calculated, set or determined in different ways.

(4) Regulations may provide for a category of licence holder to be exempt from payment of the licensing levy.

(5) Regulations may provide for interest (at a rate specified in, or determined under, the regulations) to be charged in respect of unpaid amounts of licensing levy.

(6) Regulations may provide for unpaid amounts of licensing levy (together with any interest charged) to be recoverable as a civil debt.

(7) Regulations may confer a function (including a function involving the exercise of a discretion) on—

(a) the Secretary of State,

(b) the OGA, or

(c) any other person, apart from the Scottish Ministers or the Welsh Ministers.

(8) Regulations (including regulations of the kinds mentioned in subsections (3) and (4)) may provide for a category of licence holder to consist of persons who hold a kind of licence that is specified in the regulations.

(9) The regulations may (in particular) specify any of the following kinds of licence—

(a) licences granted under a particular enactment;

(b) licences of a particular description granted under a particular enactment;

(c) licences, or licences of a particular description (including a description falling within paragraph (a) or (b)), granted—

(i) before a particular time,

(ii) after a particular time, or

(iii) during a particular period.

(10) In this section—

“licence” means a licence falling within section (Levy on licence holders)(1);

“licence holder” means a person who holds a licence (whether the person was granted it or has, after its grant, acquired it by assignment or other means);

“regulations” means regulations under section (Levy on licence holders).”

19: After Clause 7, insert the following new Clause—

“Payments and financial assistance

(1) The Secretary of State may make payments or provide financial assistance to the OGA.

(2) The payments or financial assistance may be made or provided subject to such conditions as may be determined by the Secretary of State.

(3) In the case of a grant such conditions may, in particular, include conditions requiring repayment in specified circumstances.

(4) In this section “financial assistance” means grants, loans, guarantees or indemnities, or any other kind of financial assistance.”

Amendments 17 to 19 agreed.

Clause 8 agreed.

Clause 9: Interpretation of Part 2

Amendments 20 to 23 not moved.

Clause 9 agreed.

Clauses 10 to 18 agreed.

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Clause 19: Petroleum-related information and samples

Amendment 24

Moved by Lord Whitty

24: Clause 19, page 11, line 25, after “which” insert “were or”.

6.45 pm

Lord Whitty: My Lords, in moving Amendment 24, I will speak to the others in the group. We move on to information and samples. These relatively small amendments are intended to ensure that the information and sample regime takes account of the role of carbon capture and storage: in other words, that it is reflected within this part of the Bill in the way that it should be reflected—the Minister has indicated some sympathy towards this—in the earlier clauses relating to the activities of the OGA.

Amendments 24 and 25 are very small and are intended to ensure that the definition of “petroleum-related information” is kept as broad as possible, so that it is not limited to the fulfilment of the principal objective—it is narrowly defined at present—and not time limited to activities which continue to be relevant to that objective. In other words, it could be used, either in parallel with extraction processes or after they have taken place, to provide samples and information to CO2 licence holders and storage operators. The use of “and” between the two subsections creates an ambiguity here, and if the Government’s intention is to ensure that the information could be provided to and required of CO2 storage operators, they need to make these amendments.

Similarly, on Amendment 25, which relates to the transfer of such information, there are many within the potential CCS market who regard the inability to access samples as one of the barriers to using former gas and oil facilities for carbon storage. In order to ascertain whether the facility is appropriate and can technically be operated as a storage area, information that is held by the OGA as a result of it having been provided by the extraction operators ought to be made available to the CCS operators. Amendment 25 is designed to ensure that that can happen and that the Government have the powers to transfer such data. The Government have already indicated that they hope to be able to transfer such information, and this would give a proper legal base to that and make it enforceable. In addition, Amendment 28 clarifies that the OGA could require information and samples for the purpose of carrying out any of its relevant functions, not just its principal function. Again, that would ensure that storage licensing was included in that provision.

I hope the Government can look at these amendments and, taking account of the points made earlier in Committee about CCS, consider whether these relatively minor amendments to the Bill would help to encourage and give some degree of confidence to potential operators of CCS making use of our North Sea facilities. I beg to move.

Baroness Liddell of Coatdyke: My Lords, we are all getting very excited about these amendments so we are anxious to speak. I want to add a couple of sentences. There is a history in the oil and gas sector of not

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sharing information, for whatever reason: sometimes it is competitiveness but sometimes, although I hate to say it, it is sheer awkwardness. Although CCS technology has been around for a long time and has been proven, there is nervousness about transmission, so it would make a great deal of sense if the OGA had the authority to require the sharing of this information, whether for safety reasons or any other reason. Those of us who have had to deal with the oil and gas industry know that it is very shy about passing on the kind of information that my noble friend Lord Whitty has spoken so eloquent about.

Baroness Byford: My Lords, I have two amendments in this group, Amendments 26A and 30A. As we discussed earlier, the OGA may well choose to encourage small innovative companies to come into the business. The termination of rights under a licence, for whatever reason, may result in the failure of a company. The wording in the Bill seems to imply that the duty to retain information and samples will continue, but I am not sure how long that continues for. If a company ceases to continue in business for whatever reason, what happens to those samples? Is the implication of the clause that the OGA will be bound not to encourage innovation—which would be regrettable—other than in companies that are part of or allied to others and which would pick up the pieces in the event of bankruptcy? In other words, does this subsection of the Bill in practice restrict the OGA’s duty to have regard to,

“The need to encourage innovation”?

I turn to Amendment 30A, picking up on the comments from the noble Baroness, Lady Liddell, about data sharing. In many businesses, not just the oil business, people are very wary about data sharing, and in many cases I quite understand why. My amendment goes to the other end of the question: what happens to some of these data? Do they get passed on, and what restrictions are there on data being shared and pooled for the benefit of everyone? Over the years, Governments and businesses have been required to release data, which have then been passed on to third companies in a way I am sure the Bill does not intend. My second amendment refers to that. In his letter to me, the Minister stated that,

“information may be disclosed if any one of the factors listed under 27(5) applies”.

However, I still do not understand in what circumstances the OGA would disclose protected material simply because the person who had provided it had consented, although there was no need for disclosure under Clause 27(b), (c) or (d). Is there an implication that permission to disclose will be a standard part of any relationship with the OGA? Really, my amendment comes between the previous contribution relating to the concern that we should share data, which is quite right, and the question of how those data are used, not abused, in future.

These are two very simple amendments, and I am delighted to have spoken to them.

Baroness Worthington: My Lords, I shall speak to the amendments in my name and those of the noble Lords, Lord Teverson and Lord Oxburgh. Here again

7 Sep 2015 : Column 1280

we have an example of a slight lack of communication at the end of the Recess, but I am certain that by the end of Report we will have all this ironed out.

We are addressing similar points to those addressed by the previous amendments, as described very eloquently by my noble friend Lord Whitty. This gets to the nub of our concern about the OGA’s remit not being sufficiently broad to ensure that it is able to carry out its functions in a rapidly changing world, in which conversations about carbon capture and storage may be happening more often than conversations about the exploration of new wells or life extensions of existing ones. It is about ensuring that there is nothing in the Bill to prevent the very sensible powers that have been taken to enable activities in the North Sea to be well organised from applying to those activities when they relate to carbon capture and storage.

We—and, I am sure, others—have received excellent representations from academics and the CCSA on the issue of information sharing and samples, which requires careful attention. I was very interested to find out about the issue of samples. Over the past 50 years of exploration and production in the North Sea, and indeed offshore all around the UK, the oil and gas sector has acquired rock core data. In the drilling and exploration of wells, a core of rock is extracted and then maintained, curated, labelled and well looked after. That core sample contains all sorts of information that might be relevant for people wishing to repurpose sites in the North Sea or to continue their use in other forms. I believe that at the moment there is an obligation to maintain these physical samples. However, if a company abandons a hydrocarbon field, that requirement is no longer in place, and I am told that those physical samples can therefore literally be landfilled. The samples have cost millions, if not billions, to acquire, and should be valued as such.

We would therefore like to see something in the Bill that acknowledges that, when it comes to information and samples, we are discussing a very great resource that has practical implications for the development of CCS when it comes to understanding rock strata, and this information should be available. The Minister might say that the British Geological Survey retains an archive of these rock cores, but that is only an archive: you are not able to take samples from it and cannot use it to do the kind of sampling or study and research that you might want to, so that would not be sufficient. There is a need for something that will keep these cores that are owned by the oil and gas companies in a good state and available for people who may find them useful in future.

7 pm

In addition, beyond the actual samples lots of information is held by the oil and gas companies resulting from their operation—for example, understanding of the deep subsurface geology, the injection histories of the hydrocarbon field and the measurement of subsurface pressure in the reservoir and overlying rocks. These are all pieces of information that will, of course, be useful if we are trying to assess our storage capabilities, particularly the borehole data. We need to know how the borehole was drilled and how it was engineered, so we can understand whether it is possible to reuse

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boreholes and to secure against leakage. The list goes on, so there is a significant issue here about information and samples.

We remain concerned that the Bill is not sufficiently clear on the reuse and availability of the information and samples for parties that may come along in the near future—indeed, at any time in the future—and wish to use the North Sea for CCS. We can continue to have our discussions about the general principles and the objectives of the OGA but these amendments speak to specific issues that might be a hurdle. I hope to hear some positive words from the Minister, since I am sure that this we will all continue to receive representation regarding this issue. We would welcome further discussion with the Government.

Lord Bourne of Aberystwyth: My Lords, these amendments seek to amend Chapter 3 of Part 2 of the Bill, relating to information and samples. This is another smorgasbord of amendments and I shall attempt to do justice to the contributions that have been made.

Amendment 24 seeks to broaden the definition of “petroleum-related information” that is used throughout Chapter 3 of Part 2. The broadening of this term is to include information acquired by relevant persons in the course of carrying out activities that were once, but are no longer, relevant to fulfilment of the principal objective. I confess that we are not certain what the gap is that the amendment seeks to fill, but I am very happy to engage with the noble Lord, Lord Whitty, to see specifically whether there is a gap and whether we need to fill it. We feel that, as drafted, the clause provides the Oil and Gas Authority with the power to acquire all the information that it is likely to require to fulfil its role.

Amendment 25 seeks to ensure that the two definitions of petroleum-related information are not interdependent. It is our view, having looked at this and having had lawyers look at it, the provisions, as drafted, are not interdependent. Any information that an offshore licensee acquires or creates that is relevant to the principal objective will fall within paragraph (a) and anything a licensee acquires in the course of carrying out activities under their licence which is not relevant to the principal objective would fall within the scope of paragraph (b). This is clarified in the final part of that paragraph, which specifies that in order to fall within paragraph (b) the information cannot also fall within paragraph (a). So I do not think that they can be interdependent, but I am happy to have another look to make sure that we are right. We feel that the clause allows the Oil and Gas Authority to access any information that licensees acquire under their licences, including information which is not relevant to the fulfilment of the principal objective.

I thank those noble Lords who spoke on Amendment 26, which seeks to insert a new subsection into Clause 19 for the purpose of confirming that the provisions within Chapter 3 of Part 2 of the Bill, relating to information and samples, apply for the purpose of data sharing with carbon capture and storage operators. The noble Baroness, Lady Worthington, made some telling points on samples in general. We will look at the points she made about access to the archive and so on—however, we believe that nothing

7 Sep 2015 : Column 1282

within Chapter 3 prevents the Oil and Gas Authority disclosing information and samples to carbon capture and storage operators, outside the general restrictions provided for in Clause 27. These general restrictions apply to the disclosure of all protected information acquired by the Oil and Gas Authority under its powers in Chapter 3, to any person. Similarly, carbon capture and storage operators are given no special treatment by the clauses, in so far as there is no provision allowing disclosure to them and not to others. Once restricted information is publishable it may be disclosed to any person, including any carbon capture and storage operator.

Amendment 26A relates to Clause 21, which provides a power for the Secretary of State to make regulations imposing obligations on offshore licensees to retain information and samples where there has been a termination of rights under the licensee’s licence. This information can be of significant importance to the Oil and Gas Authority and the rest of the UK continental shelf, and it is therefore important that the Oil and Gas Authority can continue to access this information and samples after a licence is terminated. Clause 21 states that regulations may provide for the requirements to retain information to continue following a termination of the licensee’s rights under the licence, but the amendment would nullify these obligations if the licensee whose licence rights had been terminated ceases to be in business.

The most frequent ground for termination of a licensee’s rights under a licence is where a licensee transfers interests in a licence to another party. In that case, the rights granted under the licence continue for the party to whom they have been transferred but are automatically terminated in respect to the transferring party. Where a licence is revoked, the obligations and liabilities in respect of that licence continue, even in cases where a licensee becomes insolvent. This is done to protect the regulator from acquiring onerous and costly liabilities which may result from that licence.

This amendment is particularly relevant to information and samples plans, as provided for by Clause 23. These plans are intended to safeguard petroleum-related information and samples during licence events, such as the revocation of a licence after a company becomes insolvent. In such a case it would be imperative for the rights and obligations requiring the retention of information and samples to continue past the termination of rights and until the information and samples plan can be put in place. The amendment would prevent this and allow those companies which cease to be in business legitimately to dispose of the petroleum-related information and samples which they hold. This would be a significant and severe loss for the Oil and Gas Authority and the UK continental shelf as a whole. That is something to which we cannot agree and I am sure that it is not the intention of the amendment. I hope, in those circumstances, that that point will be taken on board.

Amendment 27 seeks to specify that an information and samples plan, as provided for by Clause 23, may provide for the transfer of petroleum-related information or samples to a new licensee or a new carbon dioxide storage licence holder. The policy intent of the information and samples provisions is to ensure that petroleum-related

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information is accounted for and safeguarded against loss during licence events, such as the surrender and expiry of licence rights. That said, nothing within the existing provisions would prevent a plan providing for the transfer of information to any other person, including a carbon dioxide storage licence holder, and for that person to take on the obligations that are imposed by that plan. The amendment makes presentational but non-material changes to the Bill and I therefore undertake to take it away for further consideration.

Amendment 28 seeks to insert a new subsection into Clause 25 for the purpose of confirming that information and samples plans shall also provide for the sharing of petroleum-related information with carbon capture and storage operators. As I have explained, the information and samples provisions are intended to ensure that petroleum-related information is accounted for and safeguarded against loss during licence events. They are not specifically intended to facilitate the sharing of information between parties. However, I confirm that nothing within the existing information and samples provisions prevents petroleum-related information being shared with carbon capture and storage operators.

Amendments 29 and 30 seek to broaden the scope of the Oil and Gas Authority’s power to acquire information and samples as set out at Clause 26 by either removing the requirement for the Oil and Gas Authority’s function for which the information is requested to be relevant to the fulfilment of the principal objective, or to add an alternative requirement that the function is relevant to the promotion and development of carbon capture transport and storage. Clause 26 is in response to recommendations made in the Wood review, which noble Lords will be aware focused virtually solely on oil and gas exploration and production offshore. The clauses are therefore drafted very specifically to cater for offshore oil and gas, and the focus on the principal objective and offshore licences reflects that. This is an important focus, and any expansion of these powers beyond it may have significant repercussions for other areas of the Oil and Gas Authority’s functions. Much of the information acquired under this power, although relevant to maximising economic recovery in the United Kingdom, will also be of interest and importance to other industries, such as carbon capture and storage. Nothing within the Bill restricts access to that information by any person once it has been published under the disclosure provisions.

The noble Baroness’s Amendment 30A requires that the cases in which protected information may be disclosed by the Oil and Gas Authority, which are detailed in Clause 27(5), must apply in defined circumstances. Clause 27(5) seeks to set out a clear set of circumstances in which protected material may be disclosed under Chapter 3 of Part 2 of the Bill. I feel that we do this, but I will be happy to write to my noble friend Lady Byford to seek further to clarify this issue.

Furthermore, Clause 27(8) provides that protected material may be published or made available to the public at such times as may be specified in regulations made by the Secretary of State. I therefore consider that there is sufficient detail within the clause to ensure that the circumstances under which protected material may be disclosed are understood.

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On the point made by the noble Baroness on stifling innovation, we do not believe that that will happen. The obligations continue indefinitely or until an information and samples plan is put in place. If a company ceases in business, the plan can provide for the ongoing obligations to end, and the information is then handed to the Oil and Gas Authority.

I will look closely at the proceedings in Hansard to ensure that we have looked in detail at those points. As I say, with regard to the one point where the matter seemed to be largely presentational, I will have a look at that to consider whether an amendment is advisable. However, with that, I hope that the noble Lord will be able to withdraw his amendment.

Baroness Byford: My Lords, before the noble Lord, Lord Whitty, comes back on his amendment, perhaps I may return to Amendment 26A. It certainly was not my intention to make things very difficult. My question was on the samples. If a company goes out of business and is not taken over or linked to another, I understand that parts of the samples that are taken are held by the British Geological Survey. However, in response to my earlier inquiry, I was told that the remainder of the sample is required to be retained by the company. I tabled this amendment because of the problem of how that will happen if the company no longer exists. The amendment was not meant to be disruptive but concerned a practical issue: if the company no longer exists, how can it continue to hold a sample? How would that work? Again, I would be very happy for the Minister to take that away to consider it. I did not know the answer to what seemed a very ordinary question.

Lord Bourne of Aberystwyth: I know that my noble friend was not seeking to be difficult or disruptive in any way; I know her too well to think that. I am happy to write further on the issue, but if the company goes into liquidation, basically, proceedings under the Insolvency Act would apply, and the liquidator—I believe this is the case, although this is on the hoof—would then have to act in response to any request from the Oil and Gas Authority to make the samples or the information available. However, I will write to my noble friend on that issue and will ensure that other noble Lords are copied in as well.

Lord Whitty: My Lords, I am grateful to the Minister for such a detailed response to my amendments and the others in this group. Obviously, I will have a very close look at what he said in Hansard and will consult those who were concerned about these issues. Certainly there is concern that the overlap between “principal objective” and “petroleum-related” could exclude things that were not currently related to the extraction—or exploration of the extraction—of petroleum, and therefore could exclude carbon capture and storage. However, the Minister has given various reassurances on that, some of which I will require some legal advice on. I am quite happy to arrange for a meeting with him or his officials. However, I repeat that I am very grateful that he has taken these amendments seriously and I hope that we can reach some accommodation on this. I beg leave to withdraw the amendment.

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Amendment 24 withdrawn.

Amendment 25 not moved.

Amendment 26 not moved.

Clause 19 agreed.

Clause 20 agreed.

7.15 pm

Clause 21: Retention: supplementary

Amendment 26A not moved.

Clause 21 agreed.

Clauses 22 to 24 agreed.

Clause 25: Information and samples plans: supplementary

Amendment 27 not moved.

Amendment 28 not moved.

Clause 25 agreed.

Clause 26: Power of the OGA to require information and samples

Amendment 29 not moved.

Amendment 30 not moved.

Clause 26 agreed.

Clause 27: Disclosure of information and provision of samples

Amendment 30A not moved.

Clause 27 agreed.

Clause 28: Timing of disclosure etc: supplementary

Amendment 31

Moved by Lord Bourne of Aberystwyth

31: Clause 28, page 16, line 19, at end insert—

“(4) In determining the time to be specified in respect of protected material in regulations under section 27(8), the Secretary of State must have regard to the following factors—

(a) whether the specified time will allow owners of protected material a reasonable period of time to satisfy the main purpose for which they acquired or created the material;

(b) any potential benefits to the petroleum industry of protected material being published or made available at the specified time;

(c) any potential risk that the specified time may discourage persons from acquiring or creating petroleum-related information or petroleum-related samples;

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(d) any other factors the Secretary of State considers relevant.

(5) In balancing the factors mentioned in subsection (4)(a) to (d), the Secretary of State must take into account the principal objective.

(6) For the purposes of subsection (4)(a), the owner of protected material is the person by whom, or on whose behalf, the protected material was provided to the OGA under this Chapter.”

Lord Bourne of Aberystwyth: My Lords, in moving Amendment 31, I shall also speak to government Amendments 32 and 36. I am extremely grateful to the Delegated Powers and Regulatory Reform Committee for its consideration of the Bill and the detailed work it always does. These amendments are made to implement some of the recommendations set out in the sixth report of the committee.

Amendment 31 amends Clause 28 to include factors the Secretary of State must have regard to before making regulations under Clause 27(8). Such regulations would determine the periods of confidentiality that are to apply to protected material before it can be published or made public. When balancing these factors the Secretary of State must take into account the principal objective of maximising the economic recovery of United Kingdom petroleum. The regulations made under Clause 27(8) are to be subject to the affirmative procedure as a result of Amendment 36, which amends Clause 61 to this effect.

Amendment 32 amends Clause 40, subsection (2) of which requires the Oil and Gas Authority to issue guidance on the matters to which it will have regard when determining the amount of a financial penalty. In line with the committee’s recommendation, this amendment requires that the Oil and Gas Authority lays any guidance or revised guidance produced under Clause 40 before each House of Parliament. I am most grateful to the committee for its recommendations, but I should say that the Government have not additionally sought to apply any parliamentary procedure to the guidance, as that is not established practice; for example, we followed that practice in relation to the supermarkets adjudicator and the data commissioner.

Before I move these amendments, I should say that I have heard that the impact assessment with regard to the Oil and Gas Authority has in fact been published, which is good news. It should be available online now, but we will undertake to get it round to Peers who participated in this debate no later than tomorrow. I apologise for the lateness of that. I beg to move.

Baroness Worthington: My Lords, I am grateful to the Minister for introducing these government amendments. Indeed, we—Labour—had also tabled an amendment following the Delegated Powers Committee’s recommendation; of course, that will now be withdrawn in the light of the Government’s decision to table amendments. We are obviously pleased that the Government have listened to that committee and taken on board its recommendations in regard to the use of the affirmative resolution procedure. We think that is an important addition to the Bill and has improved it—we are grateful.

Before we conclude today’s debate, I am encouraged to hear that we will, finally, see an impact assessment. When we sit in Committee and we dedicate our time to

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scrutinising these important matters, having an impact assessment in front of us at the time is much more useful than having it after the Committee’s deliberations have concluded. We have a number of groups that we will talk to on Wednesday, so at least we will have some information for that. In the light of the impact assessment’s late arrival, I would not be surprised if some of the contributions on Wednesday revisit ground that we visited today without the benefit of the impact assessment. That aside, we look forward to seeing it and I am grateful to the Minister for confirming its arrival. These amendments, as I have said, are implementing recommendations that we support and we have no further comment.

Lord Bourne of Aberystwyth: I thank the noble Baroness very much for those comments—I fully understand and sympathise with her position on the impact assessment. I agree that it would have been much more desirable to have the impact assessment in considering the amendments today. I thank her for her support on the amendments in relation to the Delegated Powers and Regulatory Reform Committee’s recommendations.

Amendment 31 agreed.

Clause 28, as amended, agreed.

Clauses 29 to 36 agreed.

House resumed.

7.22 pm

Sitting suspended.

Arrangement of Business

Announcement

7.30 pm

Baroness Evans of Bowes Park (Con): My Lords, I can confirm that this debate is now the last business and that we will not return to the Energy Bill today.

Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations 2015

Motion to Regret

7.30 pm

Moved by Lord Beecham

That this House regrets that the Government are introducing the Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations 2015 without having undertaken a review of the impact and coherence of the cuts to litigators’ fees; agrees with the Secondary Legislation Scrutiny Committee’s analysis that there is too little evidence to establish what effect the fee reduction would have; and regrets the Government’s lack of engagement with the profession and those affected by its reforms (SI 2015/1369).

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Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee

Lord Beecham (Lab): My Lords, I refer to my interests registered as an unpaid consultant with my former law firm.

Last year, the Government reduced the fees payable for criminal legal aid work by 8.75%. On 25 June this year, they published the regulations which are the subject of this regret Motion and which implemented the planned imposition of a second cut of 8.75%, effective for new cases begun after 1 July. However, the Bar was exempt from this second, further cut, at least for the time being. Therefore, it affects essentially solicitors.

The regulations also prescribe new fixed fees, effective from next January, for police station and magistrates’ court work and in Crown Court cases involving up to 500 pages of prosecution evidence—the new PPE. Alongside these changes, the Ministry of Justice is pressing ahead with radical changes to the process of bidding for contracts.

The regulations evinced from the Secondary Legislation Scrutiny Committee a critical report of the kind with which the Ministry of Justice is by now all too familiar. In its report of 25 June, the committee highlighted concerns about the lack of detail about the effect of the first instalment of the 17.5% cut and the deviation from the original timetable. It pointed out that the so-called Explanatory Memorandum gave no information about the effect of the first cut despite the statement in the memorandum accompanying the original cut that that there would be continual monitoring and a review.

The impact assessment—again, typically—is described by the committee as “very short on detail” and as offering,

“nothing about quantification of the impact on legal aid providers”,

whereas the Law Society was quoted as claiming that 120 providers—about 8% of the total—were facing bankruptcy as a result of the previous round of cuts.

An exchange of correspondence between the noble Lord, Lord Trefgarne, and the Minister is recorded in the committee’s report of 2 July and reflected the customary complacency of the Ministry of Justice. The noble Lord, Lord Trefgarne, concluded the exchange by asking two questions: first, what evidence could be provided as to the maintenance of quality, promptness and reliability of the service and how the department would ensure that these were maintained and monitored; and, secondly, given that 1,099 bids had been made for 527 contracts, what would happen to the unsuccessful applicants and was there a risk of market distortion. Perhaps when he replies the Minister could enlighten us as to these matters.

The background to these regulations is of course the Government’s determination to secure further reductions in the legal aid bill, the effects of which have so often been a matter of concern in this House and the world outside. Since 2010, the legal aid bill, civil and criminal, has fallen from £2.2 billion to £1.7 billion—that is over 20% in cash terms and more in real terms—and appears, even without the anticipated saving of £55 million from the measures which are the subject of this Motion, to be falling further to some £1.5 billion. Of course, all these figures include VAT.

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Before the Minister does so, I should say that the Labour Government also implemented cuts in legal aid and froze criminal legal aid fees. Indeed, I first came to be acquainted with my noble friend—my now good friend—Lord Bach as a result of securing a debate at the Labour Party conference criticising such cuts. The Government, however, appear determined to reduce the number of law firms able to undertake legal aid work— although they have temporarily, as I indicated, spared the criminal Bar from the second 8.75% cut—heedless of the potential impact on clients and the future of the profession.

In the north-east, for example, seven firms will obtain contracts north of the Tyne and five south of the Tyne. These are very large geographical areas such that access to lawyers will become more difficult for many clients and attendance at police stations more difficult for practitioners. Moreover, the fees payable for different categories of work vary widely. The fee for attendance at a police station, which could well be in the middle of the night—as I shudder to recall—varies between £118.80 in Hartlepool to £160.88 in Durham. The rationale for this does not appear self-evident.

There is great concern about the so-called two tiers of contract under which firms can opt to act only for their own clients or in addition undertake duty solicitor work, whether it be at police stations or at court. There is a widely held view locally and indeed nationally that the former group will fall away because of the limited number of cases in what is in any case a declining number of cases overall, as testified by the court closure programme—in itself controversial but justified by the Government because of lack of demand. National and civil legal aid expenditure fell by 11% in the last quarter of 2014 compared to the same period in 2013. The number of magistrates’ court cases fell by 17%, committals for sentence by 29%, and all non-Crown Court crime by 7% in volume and 14% in value.

I discussed the situation with partners in my old firm, where the criminal department is a relatively small part of the practice, and with the senior partner in another practice where it is much more significant. During my 35 years as a partner, and since, the criminal department made a very modest contribution to the firm’s profits but was maintained because we felt we ought to offer the service. It would appear that the average profit margin on criminal legal work is around 5%. An experienced solicitor might expect to earn only around £40,000 a year, significantly less than in other areas of practice, even in firms with a larger criminal department. Firms are not recruiting trainee solicitors and, even if they wanted to, it is unlikely that many would apply when there are much more financially rewarding areas of law in which to practise. There is therefore likely to be a shortage of able solicitors in future, and of course the Bar, which has temporarily escaped the second round of 8.75% cuts, faces the same potential problem, with adverse consequences ultimately for recruitment to the judiciary, as senior judges have pointed out. The Justice Minister Mr Vara’s suggestion that work could be carried out by legal executives underlines the point while ignoring the fact that many firms cannot even now afford to employ legal executives as well as solicitors.

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The difficulties that I have outlined are not, of course, restricted to the north-east. A particularly illuminating article by Steven Bird was published by the London Criminal Courts Solicitors’ Association. It demonstrated that some areas in the south-east would see some police station fees cut by more than 30% and that magistrates’ court fees, falling into what would have been the higher fee band, would be cut by an average of 52.7%. In London, a flat rate of £200.93—I love the precision of the 93p—will mean a cut varying from lucky Bexley of 8.67% to Heathrow of 33.25%. In the complex new arrangements for Crown Court cases where the new PPE applies, with different fees for each band of 100 pages up to 500 and 11 different categories of offence, fees could be cut by 50% or more.

Members will be aware that the measures now under way evoked both a strike, in effect, by solicitors and an unusually close degree of joint working between the Law Society and the Bar, as evidenced by the material published by the Criminal Bar Association. The irony of this latest assault on our cherished system of legal aid and access to justice, already compounded by the ludicrous criminal charges order which is the subject of another regret Motion that I have tabled, in the year when we have celebrated the anniversary of Magna Carta, is clearly lost on this Government. We learnt not to expect more of Mr Grayling, but had hopes of Mr Gove. It is not too late for him to think again about the changes due to take effect next January. He acted, after all, to abandon Mr Grayling’s vanity project for the secure college at Glen Parva.

In the mean time, perhaps the Minister, if not tonight then perhaps by way of a letter to be placed in the Library, could answer some questions. What, if any, contingency plans are in place if an insufficient number of firms of solicitors accept contracts for duty solicitor work in police stations or courts? How will the Government react if the contract process is disrupted by legal challenges from unsuccessful bidders? What plans exist to deal with the situation arising from contracts becoming unviable during the period for which they are to run? What assessment has been made of the ability to survive of firms with only an own-client contract and, in the event of a significant number of firms failing to do so in any locality, what contingency plans exist to deal with the problem? What assessment has been made of the impact of the changes on the number of solicitors needed to provide an efficient and accessible service and upon recruitment?

Will the Minister look into the parallel matter of the emerging problem of long delays in trials proceeding because of short staffing in the Crown Prosecution Service? What future does the Ministry of Justice foresee for the Public Defender Service? How many advocates does it plan to employ and on what terms? Will the service be required to compete with private firms or is it seen as a resource of last resort where insufficient private firms fail to survive the new regime? When will the workings of the new structure be reviewed?

Finally, what assurance can be given that it is not part of the Government’s intention for criminal legal aid work to be consigned to oligopolies, such as the likes of G4S, Serco or Sodexo, upon which they increasingly rely to provide public services?

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Concern about access to justice in general, and the future of legal aid in particular, has been a regular feature of this House’s deliberations in the five years that I have been privileged to serve in it. We seem to be witnessing the slow death of legal aid. I hope that we will not, in the near future, be obliged to act as a coroner’s jury, performing an inquest on its ultimate demise. I beg to move the regret Motion.

Lord Marks of Henley-on-Thames (LD): My Lords, I refer to my registered interest as a practising barrister, though not undertaking work in the criminal field.

The fact that this Regret Motion is being debated at all is evidence of a problem that has bedevilled the relationship between the legal professions and government for many years now. Governments of all complexions have failed to seek consensual solutions to the challenge of providing a publicly funded criminal justice system that will work successfully both for the public and for the two essentially private sector professions. A mutually supportive and trusting relationship between the professions and government is essential if our criminal justice system is both to be effective and fair and, at the same time, to command public confidence. There is a crying need for the Ministry of Justice to work more closely with the professions to reach an acceptable agreement—a compact—for fees and future allocation of work. The constant war of attrition over recent decades has damaged government and the legal professions and should not continue. This was a view held and often expressed by my noble friend Lord McNally when he was a Minister, although of course he was bound by the constraints placed upon him by being part of the coalition Government with the overwhelming need to find cost savings. This Government are also so constrained, and we understand that.

I will speak of the reductions affecting criminal work, and my noble friend Lord Carlile of Berriew will speak largely about the changes affecting work for prisoners.

The background against which the implementation of the second stage of the 17.5% reduction in fees is being imposed is a great deal more favourable than it has been for some years. Sir Bill Jeffrey summarised this at the start of his extremely helpful report, Independent Criminal Advocacy in England and Wales, published in May 2014. He wrote that:

“The landscape of criminal advocacy has altered substantially in recent years. Recorded and reported crime are down. Fewer cases reach the criminal courts. More defendants plead guilty, and earlier than in the past. Court procedures are simpler. There is substantially less work for advocates to do. Its character is different, with more straightforward cases and fewer contested trials. In the publicly funded sector (86% of the total), it pays less well”.

The climate should, therefore, present us with opportunities to make improvements to the criminal justice system, to make it work better and more cost effectively by collective and collaborative effort and working on a clearly evidenced-based approach. Yet the introduction of these regulations has been far from that.

7.45 pm

The justification for the second 8.75% fee reduction was to have been the economies of scale and reductions in cost that were to be expected as a result of market

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consolidation—the theory being that fewer providers would have larger and more certain volumes of work, which would enable them to weather lower costs by making such economies of scale. Of course, that argument ignores some of the difficulties inherent in reducing provider numbers. A reduction from 1,600 contracts to 527 for solicitors offering cover at police stations involves a substantial limitation of choice for the public. It also makes it far more difficult for new entrants into the market to prosper, which has the effect of ossifying criminal practice in the hands of a few providers. It risks defendants being left without adequate advice at police stations. I do not believe that any clear assessment of that risk—the risk of solicitor cover being unavailable or simply too far away—has been carried out.

Even if one overlooks these points, there is an inherent deep unfairness in what has happened. Although the cuts were introduced in July of this year, the market consolidation that was intended to enable the profession to weather them is delayed until at least January 2016, so that there is a minimum of six months between the two with no protection in place.

The Law Society expects numbers of firms to fold or stop taking criminal work as a result of this second tranche of cuts. Yet the Government’s impact assessment accompanying the regulations entirely missed the point. It recognised the,

“additional pressures created by declining case volumes”,

and that there are,

“additional challenges in coping with reductions in fees”.

Yet the impact assessment made the assumption, described as key, that there would not be any major impact on future clients, explaining that:

“Any impact on clients would be felt through a lack of legal aid coverage should providers be unable to sustain a second fee reduction. We believe that any potential problems with sustainability are mitigated by the changes to legal aid procurement and the harmonisation of fee structures”—

in other words, by the very market consolidation that has now been delayed. But the fact is that there is already, and will be, a loss of providers. The assumption to the contrary flies in the face of human economic behaviour.

It is very similar to the assumption that was made in relation to raising court fees—that the enhanced fees of up to £10,000 to bring a money claim were assumed not likely to lead to a reduction in case starts.

The real challenge for government in this Parliament should be to get the criminal system working better. The report by Sir Bill Jeffrey, which I mentioned earlier, recognised the value of independent and successful legal professionals providing high-quality advocacy. He made a number of important suggestions for the future work of solicitor and barrister advocates in the fields of training, early choice of advocates for cases, and the structure of the two professions and the work they undertake. The Government should heed his report very carefully, and it would be very helpful if the Minister could say in his response how and when they intend to respond to the Jeffrey report, which they commissioned.

The Government should also respond positively, and not just with warm words but with the allocation of the necessary resources, to the need to implement in

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full the recommendations of the

Review

of

Efficiency in

C

riminal

P

roceedings

conducted by Sir Brian Leveson and published in January this year. With better communications, fewer unnecessary hearings attended in person by all parties, getting charging decisions right first time and ensuring continuity of representation and of case management throughout the life of cases, there could be a manifestly more efficient system. But as Sir Brian made clear, resources are needed to establish and kick-start that more efficient system—resources for better technology and resources for training. It is incumbent on the Government to provide those resources—and to ensure that the morale of those involved in establishing and running the system is high, so as to make the changes successful.

No doubt the Government would say that savings needed to be made now, and would point to the obvious fact that that the savings that would result from the Leveson proposals would take time to be made. But that is, quite simply, no reason for not making them or trying to make savings now by enabling remuneration in ways that are unfair, that reduce the number of practitioners willing to undertake criminal work, and that diminish morale throughout the system.

On legal aid, we have proposed ways of saving money without cutting fees to unacceptable levels. We have suggested making defendants’ restrained funds available for paying reasonable defence fees in very high-cost cases. In civil cases, you cannot freeze funds without an exception for the payment of reasonable costs, yet at present the defendant in a criminal case who has restrained funds is entitled to legal aid because he cannot use the funds to pay for his defence. It defies logic, but apparently some in the Government support retaining the present arrangements.

We have also suggested that larger companies should be required to carry compulsory insurance for directors and employees to cover the costs of fraud prosecutions; we have employer compulsory liability insurance, so why not that? Such defence costs are usually now incurred by the legal aid budget in disproportionately expensive very high-cost cases. These are practical ways to reduce the cost of legal aid without driving firms out of business or making criminal work a Cinderella service, and without destroying the morale of those who work in it. We wish to co-operate with the Government to find ways to save money that are effective and fair, and to be involved in a far more consensual approach.

Lord Ponsonby of Shulbrede (Lab): My Lords, I congratulate my noble friend on moving this Regret Motion. I sit as a magistrate in London in the family courts, the youth courts and adult criminal courts and I frequently hear cases where the defendant or applicant is a litigant in person. From the court’s perspective, some litigants in person represent themselves very well. They understand the advice that they receive from the clerks and manage both the legal process and the practical aspects of navigating the court system through to a conclusion that they believe is satisfactory. However, some—I would say many—litigants in person have difficulty understanding the guidance that they are given when in court. They struggle with the whole procedure and, at the end, do not feel that they have been treated justly by the system that they have grappled with.

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I want to tell noble Lords an anecdote from about a year ago. It concerns a woman who turned up in court charged with fraud against her employer. She was a litigant in person. She came into court and was correctly identified. The clerk then asked her whether she was guilty or not guilty. Her reply was, “I am guilty but I want to plead not guilty”. When asked to explain herself, she did indeed have a rationale for saying that. She was imminently due to have a medical operation. If she had pleaded guilty she would lose her employment and not be able to have the operation, so she was going to delay the finding of guilt until a trial.

It could be argued that the defendant had told us that she was guilty and that she was planning to commit a further fraud on her employer. But as a court we were limited in the advice that we could give to her other than to advise her of the benefits of a guilty plea. We had 30 other cases to deal with that day. We filled in the necessary forms and the matter was indeed put off for trial. If that lady had had some robust defence advice, she may have decided to plead guilty as she had indeed told us she was guilty. But her right to plead not guilty trumped everything else, resulting in the additional cost of the trial.

The overwhelming point that I want to make is that we see many vulnerable people in courts—people who are not able to represent themselves. There is a concern. The Magistrates’ Association, together with other interested bodies, has tried to judge whether the justice system is functioning properly with this increase in litigants in person. I draw the House’s attention to a survey of magistrates published on 13 January this year. Views were taken before costs came in in February 2014 and again in November 2014 after the increase in litigants in person. The survey shows a noticeable increase in the dissatisfaction expressed by magistrates because they felt that the system was not being as just as it should be.

I understand that there are a lot of surveys, but the current chair of the Magistrates’ Association, Richard Monkhouse, was a statistician in a former life and this is a robust piece of work. I have looked at it myself and I have a scientific background. I hope that the Government will look at these figures carefully because they raise a worrying growth in uncertainty and dissatisfaction with the increase in the number of litigants in person.

A wider point should be made. Other aspects of the legal and court system also feed into the general sense of dissatisfaction and the feeling that the court system as a whole is not properly offering justice to people. We have heard from my noble friend about the imposition of the criminal courts charge. In the family courts, we have had cuts to legal aid and an increase in the costs of drug and alcohol testing, which reduces access to fairness for people. We have had the increase in tribunal fees and cuts to CABs. These are off-topic for the purposes of this debate, but they add to the sense of many vulnerable people feeling that the court system as a whole is not open to them as it should be.

Lord Carlile of Berriew (LD): My Lords, it is always a pleasure to follow the noble Lord, Lord Ponsonby, who brings a rich vein of evidence from his experience as a lay magistrate to your Lordships’ deliberations.

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I declare the interests of having been a barrister practising criminal law for 45 years and having spent 28 years, until I retired from these roles at the end of last year, as a part-time judge at various levels and, particularly for this debate, as a former president of the Howard League for Penal Reform.

In a few moments, I shall talk about prison law specifically, but I wanted to address some issues about the generality of this debate, if I may. I agree with the broad thrust of what has been said about the effect of the regulations. However, I want to commend the Lord Chancellor for his willingness to engage with the legal profession, both the Bar and the solicitors, during recent weeks and months. This has been appreciated. Other things could be done than cutting criminal legal aid in the way which has been described.

8 pm

There are still cost savings to be made which could be addressed and I can give some examples. Lord Justice Leveson’s report and the target of one case, one hearing or, at worst, one case, two hearings, which just does not take place at the moment, could save a great deal of money. Announcements have been made about the closure of court buildings but that could go much further and would not result in removing court proceedings from localities. There is absolutely no reason why most magistrates’ court hearings and, indeed, county court hearings in the civil jurisdiction, should not take place in town halls, village halls or school halls—buildings where the public would be less intimidated. Layers of administration could be removed. For example, every Crown Court centre has a resident judge. More or less by definition, they are all fairly intelligent men and women who could be trained to manage their court buildings and to be in charge of the whole staff in the courts. There should not be two separate administrations: the court judiciary and the court administration. I know from talking to resident judges that some might resign if presented with the obligation to manage the courts, but there are plenty of others who would seize the opportunity to be trained to do so.

There is an unacceptable level of regulatory duplication in the legal profession: the Solicitors Regulation Authority, which struggles with all the cases placed before it because it does not have adequate resources; the Bar Standards Board; the Legal Services Board; and the Legal Ombudsman. There is a level of duplication here which is—or should be—counterintuitive to any Conservative Government. The statutory bodies regulating the Bar could certainly be reduced by at least one, and possibly two, leaving the Bar Standards Board in place and saving public money. I respectfully suggest that another thing that is counterintuitive to a Conservative Government is the Criminal Defence Service. The nationalisation of part of criminal defences, when there is a perfectly good set of private sector organisations to deal with these things, is an admission of failure to negotiate, not an empirical and objective decision. I urge that the future of the Criminal Defence Service should be reviewed seriously. It is not, unfortunately, making the impact that was intended. Indeed, it is barely making any positive impact at all.

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I turn to prison law and to cuts to legal aid for prisoners. One of the roles of lawyers—including the Minister, who is a very experienced and much admired Queen’s Counsel—is to speak out sometimes for the unspeakable; to do really difficult things in an articulate way and to represent those many believe should not have rights but who are human beings who do have rights. Prisoners fall into that category. Since December 2013, legal aid for prisoners has been severely curtailed both in scope and through fee cuts. However, this has coincided with an unprecedented deterioration of safety standards in English and Welsh prisons; a rise in suicides; an increase in mental illness among prisoners; and a reduction in the effectiveness of treatment for this. All that is compounded by staff shortages. Access to justice is vital for prisoners who are, as members of a closed community, as the noble and learned Lord, Lord Brown, said,

“uniquely subject to the exercise of highly coercive powers”.—[

Official Report

, 29/1/14; col. 1279.]

Previous regulations removed almost all issues that prisoners face from the scope of legal aid and outside it now are advice—never mind litigation—about access to mother and baby units, prolonged segregation and access to safe accommodation and support for vulnerable prisoners, including children, on release from prison. That means that if a perfectly reasonable judicial review has to be mounted—for example, on the basis that prolonged segregation was severely damaging a prisoner’s health—it has to be done pro bono, if at all. If the provision of support for vulnerable prisoners, including children leaving custody, is to be challenged, that too has to be done pro bono. One contrasts that with the support that is available, at least in exceptional cases, for children with educational challenges and their parents.

The only forms of prison law work that remain in scope of legal aid at the moment are some parole and disciplinary hearings and a limited number of sentence calculation cases. As the Minister will know, the Court of Appeal granted the Howard League and the Prisoners’ Advice Service permission to challenge those cuts at a hearing in July 2015, so that challenge remains pending. The Government have the opportunity to respond without going through the public expense of a court challenge by looking once again at the way in which prison law has been cut.

The Howard League, which I use as an example because I know it well, provides a free telephone legal advice line, through its very expert legal team, for children and young people in prison. It is the only dedicated legal service in the country for such people. The team has expertise and has a contract to carry out legal aid work but it is now carrying out almost a majority of that work for nothing. So here we have the private sector picking up serious cases, many of which succeed when challenges are mounted, but having to do it for nothing for one of the most vulnerable groups in the community. This is not an acceptable position because of the financial challenge it presents. The Howard League and other charities do not resile from their ambition to do as much pro bono work as possible and to be the leaders of opinion and the formation of new law in relation to prisoners, but they must be allowed to do reasonable work for reasonable

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fees and that is just not happening. The work that remains in scope is all subject to a standard fixed-fee regime. This means that each case is paid for according to the case category. Lawyers get paid for the actual work they do only if they can prove that they have reasonably done more than three times the work allowed for by the fixed fee. That is self-evidently unfair to those carrying out the work and their clients.

For example, written representations for a person who has served his or her sentence, but is recalled to prison, attract a standard fee. However, the work can involve the consideration of hundreds of pages of documentation which may be extremely difficult to extract from the public service, particularly the prisons and the Home Office. Throughout that time, while the challenge is being mounted, the prisoner is deprived of their liberty, even though they have served the punishment part of their sentence and the state, of course, is paying the cost of imprisoning them—an imprisonment that may be the subject of successful challenge.

I suggest that the fee regime does not recognise the nuances or complexities of a case. A young person with learning difficulties recalled on an indeterminate sentence for public protection—an IPP—attracts exactly the same for his or her case as an adult on a much simpler fixed-term sentence. The new rates mean that practitioners who specialise in complex cases and who have the expertise are invariably operating at a loss.

I am informed that the result is that firms that have been skilled and experienced in prison law are pulling out of it and that lawyers are being laid off or moving to do other work. I suggest that that is unacceptable. Many may think that prison law is unattractive work, but it is important work. It concerns a prisoner’s ability to change and to be released into the community, which is in everyone’s interests.

I hope that the Lord Chancellor, who is plainly very interested in prison reform and has already made a significant contribution to change in prisons, will regard the sort of aspects of prison law that I have been talking about as part of the same picture and worthy of the modest investment that is involved in restoring legal aid to the sort of cases that I have been describing.

Lord Cotter (LD): My Lords, I thank the noble Lord for introducing this Motion to Regret, which I and many others hope will lead to a sustained examination of legal aid now and in the future, as a result in particular of the cuts proposed by the Government. My intervention will be very brief because I have no legal background whatever. I saw that this Motion was proposed for today, and I came to listen and to say a few words as, one may say, an ordinary member of the public.

I have listened to those who have a detailed knowledge of this field. I do not have that knowledge but I have had it put to me that there are grave concerns for the ordinary member of the public, who could be said to be at the bottom of the pile and might be induced—because of pressure and of feeling vulnerable—to shorten court proceedings and say, “Yes, I was guilty”. I may be wrong on that; others more expert than me may say, “No, that is not the case”. Is it the case that vulnerable people will suffer as a result of these proposals, as has been mentioned tonight?

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My other concern is whether it is likely that fewer people will train for the legal field, which I trust the Government will look at. That is of great concern because there could be a shortage of legal practitioners, with the result of the service not being fit for purpose. With my lack of knowledge, I will sit down. Others have great knowledge to which I have listened, but I have great concerns on behalf of the ordinary public.

8.15 pm

The Minister of State, Ministry of Justice (Lord Faulks) (Con): My Lords, this has been a wide-ranging and helpful debate. Although the Government have been criticised, there have been some positive suggestions. I assure all noble Lords that the Lord Chancellor and the Ministry of Justice listen to what is said in this House. I shall certainly report back what has been said during this debate.

The Motion gives me the opportunity to set out the background to the making of the Criminal Legal Aid (Remuneration etc.) (Amendment) Regulations, which were laid before the House on 10 June, concerning the fees payable in respect of criminal litigation services funded by legal aid. The coalition Government consulted twice on the proposed fee reduction. The first consultation, Transforming Legal Aid: Delivering a More Credible and Efficient System, ran from 9 April 2013 to 4 June 2013. The second, Transforming Legal Aid: Next Steps, was published on 5 September 2013. The September consultation proposed the staging of the fee reduction plus a number of legal aid reforms, including changes to the way in which criminal legal aid services are procured and a reduction in the fees for criminal legal aid services.

The response to that consultation, Transforming Legal Aid—Next Steps: Government Response, was published on 27 February 2014 and set out the decisions taken in relation to the procurement of criminal legal aid services and fee reductions for criminal legal aid services. These regulations introduce a further fee reduction for work done under a criminal legal aid contract. This follows an earlier 8.75% reduction that was introduced in March 2014, making a total reduction of 17.5% from the April 2013 figures.

As the House will be aware, the Government consider that there is a continuing need to bear down on the costs of legal aid to ensure that we are getting the best deal for the taxpayer and that the system continues to command the confidence of the public, particularly in the light of the continuing financial challenge faced by all government departments. The House will be aware that the Ministry of Justice has no ring-fence around it, and is subject to particular pressures in this respect.

The phased introduction of the fee reduction was intended to mitigate its impact while enabling realisation of necessary savings. The second fee reduction applies to new cases starting on or after 1 July 2015, and there will therefore be a period of time before it has an impact on the legal aid income of providers.

The Government also believe that the current remuneration mechanism for criminal legal aid services is overly complex and administratively burdensome. These regulations introduce fixed fees for Crown Court cases with fewer than 501 pages of prosecution evidence,

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and simplify the fixed fees for police station work and for magistrates’ court work. The new fixed fee schemes are being introduced for services under the new criminal legal aid contracts governing criminal litigation services from 11 January 2016.

The Motion says that the House regrets that the Government made these regulations,

“without having undertaken a review of the impact and coherence of the cuts to litigators’ fees; agrees with the Secondary Legislation Scrutiny Committee’s analysis that there is too little evidence to establish what effect the fee reduction would have; and regrets the Government’s lack of engagement with the profession and those affected by its reforms”.

As I set out in my Written Ministerial Statement repeating the Statement made by Mr Vara in the House of Commons, the Government listened very carefully to the concerns of the profession in considering the programme set in train by the coalition Government for the criminal legal aid market.

We must ensure—this point has been made during the debate—that the high quality of service provided by litigators remains sustainable in all parts of England and Wales. We recognise that changes in the litigation market have the potential to affect the provision of advocacy, and we will work with the profession to preserve and enhance the high quality of advocacy that generally obtains within the system.

In March 2014 the coalition Government agreed that, prior to putting before Parliament the second fee reduction, they would consider and take into account the following factors. The first was Sir Brian Leveson’s review, to which the noble Lord, Lord Marks, referred, aimed at identifying ways to streamline and reduce the length of criminal proceedings. I entirely accept his observations about the need to do that. This is part of the overall improvement that the Government hope to achieve in saving costs, but not at the expense of achieving a fair trial. The two other factors were criminal justice reforms such as digitisation, which will increase efficiency and affect how advocates work, and any impacts from earlier remuneration changes.

At the same time the coalition Government told legal aid providers that they should plan and bid for duty and own-client contracts on the basis of a second reduction of up to 8.75%, as they would be expected to demonstrate that they were capable of delivering at that level. Also in March 2014, the coalition Government announced that they had worked with the Law Society to agree additional support for litigation providers that would assist with the transition to the new regime. The ministry agreed to implement interim payments at plea and case management hearing stage in summer 2014 —earlier than had previously been planned. We introduced interim payments for trials at the same time—cash flow being, of course, very important to the legal profession in this area, which I wholly accept is not over-remunerated compared with other fields of law.

The present Government fulfilled the commitment given in March 2014 to,

“consider and take into account”,

the factors set out by the coalition Government. There was no commitment to any formal review or public consultation, but the Government considered the findings

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of Sir Brian Leveson’s report on the efficiency of the criminal courts, the impact of broader criminal justice reforms and the impact of changes already introduced. We examined changes to our forecast legal aid expenditure, changes to the existing market, provider withdrawal rates—that is, whether people were leaving the market—and reasons, contract extension acceptance and early information from the duty provider contract tender. We also considered the implications for quality, promptness and reliability of the first fee reduction. The Legal Aid Agency has monitored, and will continue to monitor, the quality of the delivery of services through its well-established audit and peer review programmes.

All the further consideration undertaken reassured us that the legal aid reforms so far have not had any substantial negative impact on the sustainability of the service. I should perhaps pause here and remind the House that a defendant is eligible for legal aid just as he always has been; the issue is, of course, whether the changes will result in there being legal aid deserts or professionals leaving the profession, thereby endangering defendants’ ability to secure their entitlement to legal aid. The level of interest in duty contracts—when the likely reduction in fees was already known—suggested that there remained an appetite to undertake criminal legal aid work under the new regime. Having considered all these matters, we decided to press ahead with the second 8.75% reduction in litigators’ fees that was first announced by the coalition Government.

I cannot accept there has been a lack of engagement in this process. There have been three consultation exercises over a period of almost two years, two of them relating specifically to the fee reduction. There have been numerous discussions with the legal sector, many at ministerial level. The previous Lord Chancellor worked closely with the Law Society to shape the proposals for the new contracting regime. The present Lord Chancellor and Minister for Legal Aid have continued, and will continue, to engage with a broad range of legal aid providers.

The noble Lord, Lord Beecham, referred to the exchanges between the Secondary Legislation Scrutiny Committee and Mr Vara and remarked on the continuing correspondence and the failure to give what he inferred was a satisfactory response. I remind him what the Minister said on 10 July in answer to the outstanding questions from the noble Lord, Lord Trefgarne. This is particularly relevant to the audit and peer review programmes. The Minister stated:

“The LAA uses a wide range of monitoring tools”.

Although he accepted that there were no published figures, he explained:

“Ongoing monitoring is precisely that, it is not a process with a beginning and end. As a qualitative process, it is not one that generates a significant volume of statistics”.

In terms of the number of providers, which was one of the issues raised generally in the debate, Mr Vara said:

“A reduction would cause concern if the level of that reduction was likely to reduce future competitive tension. The precise level of that reduction that would cause concern, or acute concern, would depend on the design of a future competition, for example the number of contracts being tendered, so it is not possible to provide precise figures. After a great deal of analysis we concluded that we should offer 527 duty contracts. We have received 1,099 bids for those contracts. As I said in my previous letter though,

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it is important to bear in mind that the 527 duty contracts does not equate to 527 firms providing work under such contracts. Some providers who obtain duty provider contracts to deliver the work under that contract will do so in conjunction with other firms (either as delivery partners or agents)”.

So they may very often still have a future but not in precisely the same capacity, and of course they will still always have the possibility of own-client work. The need was to consolidate the duty provider part of the legal aid services provided by firms of solicitors.

The noble Lord, Lord Marks, referred to a number of aspects of efficiency and he was right to do so. He also referred to various suggestions which I think were almost all contained in the Liberal Democrat party manifesto as to other improvements that could be made. Some of these have already been considered. Those matters will receive ongoing consideration. At the moment, the Government are not, for example, satisfied that it is a good idea to have compulsory insurance. The coalition Government considered this and concluded that there were strong policy reasons not to make it compulsory. The coalition changed legislation to enable the recovery of legal aid costs after conviction and after a confiscation order and any compensation to victims had been paid. I accept the noble Lord’s suggestion that we could go further. It is a matter for consideration, but at the moment there are no plans to respond in that respect.

The noble Lord, Lord Ponsonby, indicated that many magistrates were not happy with the situation as regards litigants in person. I am sure that litigants in person can present a challenge to particular courts. However, of course, as I say, the eligibility for legal aid has not been changed by any of these instruments that we are considering which are the subject of this regret Motion. Some people simply may not have applied for legal aid but many of them will be eligible for it. I have sat as a judge with litigants in person and I sympathise with such tribunals as they present particular challenges in questions of plea and advice, but these do not, as it were, arise directly out of the matter which is currently before your Lordships’ House.

The noble Lord, Lord Carlile, focused considerably on prison law. He will be aware that the coalition Government made some changes to the availability of legal aid for prison law, focusing very much on cases where the liberty of individuals was threatened, and took the view that, as he rightly points out, prisoners are in a particularly vulnerable position and may well need representation. However, I am sure he would accept that in many cases prisoners use legal aid when an objective view would consider that they should not do so. Equally, identifying precisely the cases where liberty is truly in issue is important. I undertake to take back the detailed comments the noble Lord made about that. However, the overall principle of the Government’s approach remains a good one—namely, that we should focus legal aid on aspects of prison law where individuals’ liberty is at stake rather than on some of the more trivial aspects which, unfortunately, were sometimes pursued.

As to the availability of prison law generally, the new model would still mean that specialist law providers would get a contract. They would not have to provide all the services at the same time. Those already awarded

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own-client contracts have the opportunity to bid for prison law as part of the tender process and will also be given authority to undertake appeal and review work.

8.30 pm

However, I understand that it is not necessarily desirable for there to be judicial review to challenge these cuts. At the same time, the noble Lord will understand why I would not wish to comment further on the matter currently before the court, in which the Howard League are maintaining various representations about the alleged unlawfulness of the Government’s acts.