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The Earl of Northesk: My Lords, I am grateful to the Minister for his explanation of these two regulations. In essence, we have no objection to them. However, by your Lordships' leave, I should like to ask one or two questions that flow quite naturally from them.

In common with my noble friend Lord Kingsland, with respect to issues on the face of the Utilities Bill, I find that our debates on the Financial Services and Markets Act are still fresh in my memory. That being so, does the Minister expect that further regulations will need to be tabled in the event that the proposed merger between the London and Frankfurt exchanges proceeds and Xetra is adopted as the settlement system? I hope that I gathered from his explanation that that may not be necessary. I also acknowledge that this is something of a "how long is a piece of string" question. None the less, it would perhaps be a little odd to make these regulations, only to have to make new ones to supersede them within the space of a few months.

One other point occurs to me. A knock-on benefit of the regulations should be to improve the competitiveness and efficiency of the City. Indeed, as I understand it, CREST has cut transaction charges by 5 per cent in advance of the implementation of these changes. I am sure that none of us will have any argument with that. However, I hope that the Treasury, and the Chancellor in particular, are well seized of how important levels of stamp duty are to the City's continuing competitiveness.

Thus, does the Minister accept that, although some savings and efficiencies in transaction costs will of course arise as a result of the implementation of the regulations, those will be relatively modest compared to what many perceive to be the more pressing need to reduce stamp duty? I concede that the point is perhaps a little tangential to the subject matter of the regulations. None the less, I look forward to the Minister's replies.

Lord Razzall: My Lords, I share the views of the noble Earl in welcoming the regulations. Obviously, it is important that the full merger between CREST and the Central Gilts Office takes place.

Effectively I should like to ask the Minister one question. He indicated, as, indeed, did another place, that the regulations and their form, which inevitably is complicated, were welcomed generally by the City. Is he aware of reservations expressed by anyone in the City with regard to the regulations?

Lord McIntosh of Haringey: My Lords, perhaps, first, I may answer the noble Lord, Lord Razzall. The only reservations of which I am aware are those of the

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settlement banks. I hope that through the introduction of Regulation 36A the Government have convinced them that their fears are no longer relevant. I believe that to be the case.

The noble Earl, Lord Northesk, asked me whether the proposed merger between the London Stock Exchange and the Deutsche Bo rse affects CREST. That matter is not entirely clear because the deal is not entirely clear. However, both the London Stock Exchange and Deutsche Bo rse have made it clear that their merger will not affect settlement systems initially and that subsequent changes will be undertaken only following member consultation.

The noble Earl asked me about Xetra. However, Xetra is a trading and not a settlement system, and therefore is not affected by the regulations.

Finally, I turn to stamp duty. I recognise that it is what he calls politely "tangential", and of course the merger has no direct implications for the levying of stamp duty. However, the Government keep the level of stamp duty under review at all times, as they do all comparable matters.

On Question, Motion agreed to.

Army, Air Force and Naval Discipline Acts (Continuation) Order 2000

8.5 p.m.

The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean) rose to move, That the draft order laid before the House on 4th May be approved [18th Report from the Joint Committee].

The noble Baroness said: My Lords, your Lordships will be aware that Parliament is asked to consider an order of this nature in most years. It has a simple purpose: to continue in force for a further year the Army and Air Force Acts 1955 and the Naval Discipline Act 1957. Those three Acts provide the statutory basis for discipline in the Armed Forces.

Given that the Acts fulfil that purpose, it is hardly necessary for me to emphasise the importance that the Government attach to this order as the means of ensuring that the legislation remains in force. Therefore, this evening I ask your Lordships to approve the order, which was discussed in Committee in another place on 16th May.

Each annual continuation order may be regarded as a stepping stone between the quinquennial Armed Forces Bills. The quinquennial Bills provide the means for both renewing and reviewing the three service discipline Acts. The next Armed Forces Bill is due to be introduced in the forthcoming Session.

I need to make one observation about the order. My noble and learned friend the Attorney-General gave an undertaking on behalf of the Government to your Lordships' House on 2nd November last year. That was that when Ministers move regulations which are subject to the affirmative procedure, such as this order, they will always inform the House whether they are

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satisfied that the instrument is compatible with the rights provided under the European Convention on Human Rights.

That is by analogy with the procedure for primary legislation set out in Section 19 of the Human Rights Act 1998. That provides that the Minister in charge of the Bill will certify that the Bill concerned is compatible with the convention rights or, if he or she is not satisfied that it is, that he or she nevertheless wishes the Bill to proceed. There is no requirement in the legislation similarly to certify statutory instruments. Nevertheless, the Government have undertaken to give their view on compatibility in relation to those, subject to the affirmative procedure.

The continuation order which your Lordships are being invited to approve may not appear to raise issues of convention rights. It is a brief document with a mechanistic purpose. However, we need to consider that purpose, which, as I said, is to continue the life of three Acts. Of course, those three Acts have been amended quite extensively in the present Session by the Armed Forces Discipline Act. That had the quite specific purpose of addressing concerns about whether aspects of the service discipline Acts were compatible with the convention. However, the main provisions of the Act are not due to come into force until this October. Therefore, the service discipline Acts are not in their entirety compatible with the convention; nor is this order which renews them.

The Armed Forces Discipline Act is aimed at dealing with the most important convention points in the service legislation. We are satisfied that it has done so in a way that preserves the essential characteristics of the discipline system. Of course, we debated that at some length in your Lordships' House.

We are now completing our trawl of the body of service legislation to see whether any residual convention issues remain to be dealt with. Any that need still to be addressed will not be in such vital areas as those addressed in the Armed Forces Discipline Act because those areas naturally were the focus of our initial survey of the existing legislation. In any event, the most appropriate vehicle for further changes that may be needed would appear to be in the quinquennial Armed Forces Bill.

Nevertheless, as I have already stated, the Government consider it essential that the order should be approved as it provides the necessary parliamentary authority for continuing the services' system of discipline. The system serves the Armed Forces well--I believe that there is common ground in your Lordships' House on that--but that does not mean that the legislation underpinning the system is incapable of improvement.

The Government have made clear their wish to improve the structure of the legislation to enable it better to meet the needs of the services and the way in which they operate today. In the 1998 Strategic Defence Review, the Government for the first time expressed the view that,

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    "there would be advantages to be gained from combining the three Service Discipline Acts into a single Act. Those differences which the Services need to retain for operational reasons would be kept but reduced to the absolute minimum".

Those words were prompted by the realisation that the present legislation does not provide the best framework for discipline when the services work together in fully joint environments, as is increasingly the case. We are considering how best to give effect to the intention to develop a tri-service Act, bearing in mind that, as was also stated in the Strategic Defence Review,

    "It would be a substantial and complex undertaking which will take some years to complete".

We are contemplating an exercise of rather greater ambition than merely putting the three existing Acts together into a single cover. We are looking at creating new legislation that will be greater than the sum of the existing parts. In the mean time, we have been taking stock of the intended consolidation of the legislation. In some minds, that has been confused with the creation of a tri-service Act. That confusion was evident from some of the remarks made in your Lordships' House during the passage of the Armed Forces Discipline Bill.

Consolidation would merely bring up to date the existing three separate Acts. In normal circumstances, that would be a worthwhile objective in itself, given the age and heavily amended state of the current legislation. Many of your Lordships know that work on consolidation has been under way for some years under the previous administration and the present one. It predates by some years the Strategic Defence Review and the intention to create a single tri-service Act.

The intention to move towards a tri-service Act has given us cause to consider whether to complete the consolidation project. Consolidation and the tri-service Act would mean significant upheaval for the services. In both cases, it would mean not only having to adjust to new primary legislation, but the complete revision of all the extensive regulations and manuals that flow from primary legislation.

We are firmly of the view that it would not be a productive use of resources to go through that upheaval twice in a few years. Arguably it would even be counter-productive, because committing staff to implementing the effects of consolidation would divert them from work on the tri-service Act. As I announced in an answer last month, we have therefore decided to defer the consolidation and subsume it within the more fundamental exercise of creating the tri-service Act. That will provide the soundest foundation for service legislation in the 21st century.

As I have explained, the need for a tri-service Act derives from the importance of having a better disciplinary framework in those many circumstances in which the services work together. The operations in Sierra Leone have been a further demonstration of how effectively our Armed Forces operate together, notwithstanding any improvement that we may wish to include in the legislative framework.

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I should like to conclude by paying tribute to the sterling qualities that have been so much in evidence in the personnel of all our forces deployed in West Africa in the past few weeks. That has been a particularly graphic example of what we have come to expect. Discipline, resolve and initiative are amply displayed wherever our personnel serve, in single service or joint environments, however challenging the circumstances. I know that those qualities are fully valued in all parts of the House.

I invite your Lordships to improve--or, rather, approve--the order.

Moved, That the draft order laid before the House on 4th May be approved. [18th Report from the Joint Committee.]--(Baroness Symons of Vernham Dean.)

8.15 p.m.

Earl Attlee: My Lords, I thank the Minister for explaining the need for her order and its desirability. I am sure that it does not need any improvement. I welcome her comments about the ECHR compatibility aspects of the order. I remind the House that I have an interest in these matters.

We normally have a substantial debate on this order, but, as the Minister said, we have discussed service discipline matters at length under the Armed Forces Discipline Bill. We remain unconvinced about the need for that legislation and we shall see how it works in practice.

The Minister referred to the quinquennial review, which is due next year. We expect further ECHR-related amendments. We shall look closely at the operation of the service discipline Acts. We agree with the need for tri-service legislation, which the Minister mentioned. My only slight concern is that it might result in a delay in consolidation. I am sure that the Minister expects us to pursue those matters when we deal with the quinquennial review--and indeed that she is looking forward to us doing so.

Overcommitment remains a problem. It was a major challenge to the previous government and the situation is no different for this Government. I hope that the problem will keep the Minister awake at night. It certainly worries us and we shall continue to press her on it.

The Minister lavished praise on our Armed Forces. We should like to echo that praise--and perhaps better still, to amplify it. We should admire the motivation of our servicemen. They are not in an ordinary job. It is paid employment, but it is more of a way of life or a vocation. Over the past decade, we have begun to regard service in the Armed Forces as just another job. That is a serious mistake. The nature of their duties means that members of Her Majesty's Armed Forces rightly hold a special place at the heart of the nation. That is why we fully support the Motion.

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