Previous Section Back to Table of Contents Lords Hansard Home Page

Amendment 13 takes us to paragraph 4 of the schedule, where a constable can give directions for the purpose of securing compliance with "specified measures". That seems a very wide phrase in this context so I suggest the words,

Amendment 14 deals with paragraph 9, on work and study. The individual may be required,

I am not challenging the exclusion of certain work or study: learning how to make explosives or working as an engineer have been referred to as examples. Yet work is an important component in the self-respect of any individual. The self-respect of the individuals that we are talking about here-and that of their families-is a particular issue. Again, I seek a way of writing reasonableness into these measures.

That is very much behind my thinking in my final amendment, Amendment 15, on paragraph 10 and the reporting measures. I have heard of occasions under the current system where a controlee was required to report at a time of day that made work or study impossible. The individual is required to report to a police station,

I take it that that is in person. He will not be able to say to a prospective employer, "I need to nip out every day"-or twice a week or whatever it is-"at quarter to 12 to get to a police station which may not be very convenient. I will be away for an hour or two. I cannot quite take it as my lunch hour because it will take longer than that". If that is at the wrong time of day, it makes certain work impossible.

Though these may seem at first sight to be things that we should not have to look at in legislation, we are always looking at how measures might work in practice and how legislation might be used. I have said already today that these measures are very stringent. An awful lot will depend on precisely how they are applied. I hope that I can be given some assurances, either on the wording or on the wording not being necessary, by my noble friend on the Front Bench. I beg to move.

Lord Henley: I hope I can give my noble friend the appropriate assurances. I will just touch on the individual amendments one by one, before coming to the generality.

My noble friend's first concern was whether the requirement to remain overnight at a specified residence for specified hours would be exercised in a way that is consistent with the ability to work. We have made it perfectly clear that the new provisions are intended to be compatible with work and study, provided these do not affect public safety. We are certainly clear that an overnight residence measure will allow an individual to work, since the hours involved will not equate to the lengthy curfew that was possible. The specified hours will also be able to take account of work commitments where appropriate, and that could include early morning or early evening shift patterns. The necessity and proportionality of each measure, including each overnight residence requirement, will be determined according to the circumstances of each individual case. The

19 Oct 2011 : Column 328

occupancy rules that may be imposed in instances where the Secretary of State provides an individual with accommodation will in essence be those that would normally apply to an individual in private rented accommodation; in other words, a standard letting agreement.

The noble Baroness has a whole list of amendments. She wants to be sure that the connection with the area an individual is sent to is substantial. I can give her that assurance from the Dispatch Box. I do not think the word is necessary but obviously we would not send, as in the example she gave, a person to the Yorkshire Dales merely because they had once visited one individual there. Yes, it has to be substantial. Wherever she uses the word "reasonable", again, we would want to ensure that "reasonable" was understood to be part of the Secretary of State's decision.

The noble Baroness touched on the police reporting requirement. It is always the case that, where such a requirement is in place, the Secretary of State will have to act reasonably in terms of the times and manner associated with the requirement to attend a police station. Changes can be made to take account of a new job or other changes in that individual's lifestyle. Amendment 12 touches on the idea of being able to return travel documents to the individual; for example, something like a Freedom Pass. Obviously asking for the surrender of a passport might be very necessary and obviously we would want to keep that, but I can see occasions where it might be reasonable to allow the return of something of the order of a Freedom Pass. If I am wrong in that matter, I will write to the noble Baroness.

I understand the noble Baroness's general concerns about the lack of the use of the word "reasonable", but I can give the assurance that it is fundamental to administrative law that the Secretary of State, or any other public body, behaves reasonably when taking decisions in any capacity. That will certainly apply to the Home Secretary in exercising her powers under this Bill, as much as it does to any other Minister or public authority taking decisions in an entirely different context. Indeed, it is a requirement under Section 6 of the Human Rights Act that public authorities-that obviously includes the Home Secretary-act compatibly with convention rights. So there is the additional requirement that any interferences with individuals' convention rights are not only reasonable but proportionate. If the Secretary of State fails to act reasonably and proportionately in imposing measures under a TPIM notice, obviously her decisions can be challenged and potentially overturned in the courts.

Noble Lords will be aware that Clause 3 of the Bill provides that each of the measures imposed by the Secretary of State must be reasonably considered by her to be necessary to prevent or restrict the individual's involvement in terrorism-related activity. Clause 9, which we will return to in due course, provides that the court must review that decision, among others, by the Secretary of State and that the court may quash or give directions in relation to any measures imposed where it is not satisfied with the Secretary of State's decision-making, including where she has acted unreasonably or disproportionately. Therefore, my noble

19 Oct 2011 : Column 329

friend's amendments are unnecessary as their effect will be achieved without it being necessary to amend the Bill, and I hope she will feel able to withdraw them.

Baroness Hamwee: My Lords, I will certainly do so. I am very grateful to the Minister. Perhaps he is able to comment on two particular matters. First-and I am sorry, this is almost like trying to prove a negative-can he say how substantial or significant a connection there needs to be in requiring somebody to live at a particular residence? This may be something that you recognise when you see it so I may be asking him a question that cannot be answered in the abstract. I was obviously grateful for his response to my rather extreme example. I do not know whether it is possible to answer what is required.

Secondly, on reporting, I am sure that the Secretary of State would be reasonable; I am much less sure that officers on the ground at particular police stations will be quite as reasonable. Is the Minister able to help the Committee as to the role of the Secretary of State and the comparative role of those officers and whether, though the Secretary of State's intentions are entirely reasonable-I use the word again-it may be possible on the ground locally for them to be distorted and life made close to impossible for the individual because an officer in a particular police station decides on what is actually an unreasonable time, for their convenience? Of course I take the point about being able to challenge through the courts but there is a limit to how many challenges there can be. This is the sort of thing that we should be able to sort out, if not to everybody's satisfaction, then by at least answering their points, without having to go down that sort of route.

Lord Henley: The noble Baroness probably answered her own question, at least the first one, on what would be substantial. It is similar to the fact that we have put in "overnight" but have not defined what "overnight" is. We all know what "overnight" means; what we are saying is that we do not want that 16-hour curfew, we want people to be able to have a job, should that be necessary, but we need not be specific. This is where the reasonableness of the Secretary of State's decision comes in. Similarly with the connection: obviously that connection is not just going to be that you have been on a day trip to Blackpool or went to the party conference there many years ago.

Baroness Hamwee: It once had a better reputation.

Lord Henley: We had better not comment on Blackpool. I suspect the noble Baroness probably understands what I am getting at and I hope the House will.

Secondly, regarding how the police act, the requirements will be set out in the TPIM notice and in that the Secretary of State obviously will have acted reasonably and set out what are reasonable requirements. It is then a matter for the police to make sure, if there is a reporting requirement, that they interpret that in the proper manner. Obviously if they do not, they will be in breach of whatever appropriate duty of care they

19 Oct 2011 : Column 330

have. Therefore, I hope that they will take notice of what that order says. I hope with that the noble Baroness will feel able to withdraw her amendment.

Baroness Hamwee: My Lords, I do not expect a response from the Minister, but I will use this last opportunity to encourage the Secretary of State, in imposing reporting restrictions, to make the sort of considerations that I have referred to entirely clear rather than just leaving them to be implied. If the Secretary of State can make that sort of thing express rather than implied, it could be a very sensible move. However, having said that, I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

Amendments 10 to 15 not moved.

Schedule 1 agreed.

6.30 pm

Clause 3 : Conditions A to E

The Lord Speaker (Baroness D'Souza): My Lords, I should advise the Committee that if Amendment 16 is agreed to, I cannot call Amendment 17 by reason of pre-emption.

Amendment 16 not moved.

Amendments 17 to 22 not moved.

Clause 3 agreed.

Clause 4 : Involvement in terrorism-related activity

Amendment 23

Moved by Baroness Hamwee

23: Clause 4, page 2, line 28, leave out paragraphs (b) to (d) and insert-

"(b) conduct which is intended to encourage or assist conduct falling within paragraph (a);

(c) conduct which is intended to assist individuals known or believed by the individual concerned to be involved in conduct falling within paragraphs (a) or (b) evade lawful surveillance, investigation, or arrest."

Baroness Hamwee: My Lords, my noble friend Lord Goodhart has put his name to Amendment 23, partly through his connection with Justice, which he will no doubt mention-the organisation Justice; I am not suggesting that other noble Lords do not have a connection with justice-and because of the intrinsic value of the amendment, which is one that Justice has suggested should be raised.

This amendment would delete a large part of the definition of terrorism-related activity, which came from the 2005 Act, and replace it with the words in my amendment. The current definition is broad and includes the facilitation of,



19 Oct 2011 : Column 331

That could embrace, for instance, innocent activities such as selling an ordinary household chemical that, unknown to the seller, is intended for use in bomb-making, or even perhaps acting as a legal representative for a terror suspect. The suggested amendment would restrict the definition to,

such acts and conduct intended to help,

The extent of the definition of terrorism-related activity has concerned people for some time. Of course, it has to be to defined adequately and appropriately, but I wonder whether we should not now be looking again at a tighter definition, which would not involve risk-that obviously has to be assessed-but that would not be so extensive that it could go well beyond what would be appropriate. I beg to move.

Lord Goodhart: My Lords, my name is put to this amendment and while I do not have a great deal to add to it, there is a certain difficulty here about how the existing text of Clause 4 is drafted. Clause 4(1) (b) states:

In other words, the provision covers somebody who has facilitated the commission, preparation or instigation of such acts but has not intended to do so. That is the possibility. It is perfectly possible, for instance, that someone in a shop may sell something that is, on the face of it and so far as that person knows, entirely harmless. Yet in fact it has a particular use to the person who is buying it. In Clause 4, this is conduct that facilitates the commission of an act of terrorism but that is never intended to do so.

It would be inappropriate to go ahead without some further amendment and the provision in Amendment 23 is perfectly appropriate for this purpose. It deals with,

or,

That provision seems to cover the effect of Clause 4 a good deal more accurately than its present formation does. It seems to me that it is necessary to change the drafting of Clause 4 and that Amendment 23 is an appropriate way of doing it. It may be that another one can be thought of that is even better.

Lord Henley: My Lords, Clause 4, as my noble friends have stated, provides the definition of the phrase,

"Involvement in terrorism-related activity",

which comes from the 2005 Act. It obviously ought to be read in conjunction with Clause 30, the interpretation clause, which also refers us back, if noble Lords will bear with me, to the Terrorism Act 2000. The starting point of our response to my noble friend's amendment is that it is unnecessary. The definition of terrorism-related activity included in the Bill is, as I said, identical to the

19 Oct 2011 : Column 332

one in the 2005 Act. We consider that to be the appropriate definition and we see no need to change it. It is settled, it has not proved problematic or objectionable and the courts have not, for once, disagreed with the assessment of successive Secretaries of State that individuals whose activity falls under it are committed terrorists.

Moreover, the Government's approach to this clause is underpinned by other requirements in the Bill. Not only must the Secretary of State consider that the statutory test for the imposition of a TPIM notice is met, including,

"Condition A ... that the Secretary of State reasonably believes that the individual is, or has been, involved in terrorism-related activity",

but the court must review the Secretary of State's decision. As I said, that scrutiny will be rigorous and, as a result of relevant case law, it makes a finding of fact on the limb of the test relating to involvement in terrorism-related activity. It also gives "intense scrutiny" to the necessity of the notice and individual obligations.

I have looked very carefully at the amendment as set out by my noble friends. I have even produced a copy that I could share with the House, if it was necessary, showing how the clause would look after their amendment had been produced. However, I really do not think that on this occasion it is necessary. It would probably be safer and better to stick with the well-tried words that we have from the 2005 Act, with which the courts themselves have not had any problems, as I said. From the look on the face of the noble and learned Lord, Lord Lloyd, when I first mentioned that point, I certainly noticed a degree of agreement with me. If the courts are happy, I suspect we should leave well alone. I hope, therefore, that my noble friends will feel able to withdraw this amendment.

Baroness Hamwee: My Lords, my concern stems from the possible prospect of a less benign Home Secretary, who may misuse the clause. He-let us say he-might believe that an individual has been involved in terrorism-related activity because he, to use the example that we have given, has sold household chemicals that are to be used for something bad. I suspect that the courts have never had to face the position that I am putting forward and so have not been troubled by it. As ever, one tries to anticipate how legislation might be misused or abused, rather than used in what we would all regard as a proper fashion. However, I hear what my noble friend has said and beg leave to withdraw the amendment.

Amendment 23 withdrawn.

Clause 4 agreed.

Clause 5 : Two year limit for TPIM notices

Amendment 24

Moved by Baroness Hamwee

24: Clause 5, page 3, line 4, after "if" insert "at the date from which it is extended"



19 Oct 2011 : Column 333

Baroness Hamwee: My Lords, in moving Amendment 24 I shall speak also to Amendments 28, 30 and 31 to 35 in my name. Amendment 24 would amend Clause 5(3), which provides that a TPIM notice,

I am not sure whether my amendment is one of drafting or principle. It certainly does not go to the major principle of the structure of the periods or their limits. However, as Clause 5(3) is drawn, the conditions are to be met and that would allow for an extension of the notice. My amendment concerns when those conditions are met, saying that they should be met,

the notice "is extended". It is not likely that the Secretary of State would decide in the second week of a notice that it should, in effect, be a two-year notice. However, again, looking to a less sensible or benign Secretary of State, that should not be possible. That is why I have tabled this amendment.

My other amendments all deal with the term "obviously flawed", although I realise that I have missed at least one instance of it somewhere in the Bill. As my noble friend Lord Goodhart said in speaking to the first group of amendments, what "obviously flawed" means is far from obvious. My amendments, which would take out "obviously", probe the meaning of the term. The context, in every case, would in effect be an ex parte application. Does "obviously flawed" mean prima facie? When these questions were asked during the Public Bill Committee stage in the Commons, the Minister said:

"An appropriate test at the permission stage acts as a check on the Secretary of State's exercise of his or her powers. At that stage, it is clearly not appropriate for the court to make the final determination ... because it is ... an ex parte process".-[Official Report, Commons, Terrorism Prevention and Investigation Measures Bill Committee, 30/6/11; col. 212.]

I understand that but I am still not entirely clear about the term as distinct from the context; they may be inseparable. The Minister's answer was that it reduced the hurdle that the Secretary of State must meet. I hope that the Minister will today give us some further sense of where in the hierarchy this comes.

6.45 pm

In its 16th report-the earlier report on the Bill-the Joint Committee on Human Rights, in referring to the term "obviously flawed" and the principles of an application for judicial review, said at paragraph 1.31:

"That is not usually the approach when a court's prior permission is required to authorise the taking of an intrusive step by the police or the executive: when considering whether to grant a warrant to enter or search property, for example, the court's function is usually to determine whether the necessary conditions for the granting of the warrant are satisfied".

It went on:

"In our view, the court's function at the permission stage should be to determine whether the conditions for imposing TPIMs appear to be met, which would be more in keeping with a requirement of prior judicial authorisation of an intrusive criminal justice measure".

I hope that the Minister can help us and possibly tell us whether this term is used elsewhere. The fact that I have not come across it is by no means conclusive. It might help the Committee to assess it if it has been used in other legislation. I beg to move.



19 Oct 2011 : Column 334

Baroness Stowell of Beeston: My Lords, I hope I can give some reassurance to my noble friend on the issues that she has raised in her amendments today.

My noble friend's first amendment relates to Clause 5 and the power to extend a TPIM notice for a further year. As Clause 5 makes clear, a TPIM notice can be extended only if conditions A, C and D are met at the time and the TPIM notice would otherwise expire. In particular, the notice and the measures specified in it must be considered necessary at that point. The Secretary of State cannot reasonably make a decision to extend until shortly before the notice would expire. If she attempted to do so, I am sure that the courts would not uphold her decision. My noble friend might also like to know that decisions on whether to renew control orders have been taken only relatively close to what would otherwise be the expiry date. However, I can also assure my noble friend that any subsequent change in relation to ongoing necessity will be reflected as soon as is practical, by either the relaxation of particular measures or the revocation of the notice as a whole. This is because necessity must continue to be made clear at all stages while the notice remains in place.

My noble friend has also tabled several amendments to Clause 6 and Schedule 1 in respect of the word "obviously". These are Amendments 28, 30, 31 and 33 to 35. She seeks to clarify the word "obviously" and proposes deleting it from the phrase "obviously flawed" where it occurs. I can confirm that, in essence, this language is intended to mean much the same as prima facie in the context of what will normally be an ex parte application. In other words, her assumption on this matter is correct.

At the permission stage, the court will normally consider the application in the absence of the individual who is to have measures imposed on him. This is to ensure that the individual is not given advance warning that he is to be made the subject of a TPIM notice. The judge therefore undertakes an initial check at this early stage to ensure that there is nothing in the material presented to him to indicate that the Secretary of State is clearly wrong to think that the statutory test is satisfied, either in relation to having reasonable grounds to believe in terrorism-related activity or the need to impose a notice, or in relation to one or more of the proposed measures. It is a preliminary hearing that in essence ensures that the Secretary of State is not using her powers in an obviously inappropriate way, and therefore is very different to the further stages when the courts would review the actual decision.

The language of "obviously flawed" is well understood and applied by the courts as it is the language that is used in the control orders legislation-it is already there. The Government therefore consider that it is appropriate to continue to use this language. The full court review will, of course, be undertaken after the measures have been imposed. The procedures for that are set out in Clauses 8 and 9.

Finally, my noble friend's other amendment in this group relates to what would happen in a circumstance where the court determined that only the Secretary of State's conclusion that condition D is satisfied is obviously flawed-therefore, A and C had been met but D was flawed. This is likely to be where the court identifies

19 Oct 2011 : Column 335

that one or more of the individual measures specified in the proposed TPIM notice clearly does not meet the test that it is necessary for purposes connected with preventing or restricting the individual's involvement in terrorism-related activity. In these circumstances the court may give permission to impose a TPIM notice, but may in doing so give directions to the Secretary of State in relation to the measures to be imposed.

The amendment would amplify Clause 6(9) by adding the words,

As my noble friend has explained, she is seeking an assurance from me that this is already the case. She is seeking further information than that which was provided during the passage of the Bill in another place. I can confirm that, as drafted, Clause 6(9) would allow the court to give directions in relation to the variation of the proposed measures set out in the draft TPIM notice. Equally, it would allow the court to direct that a particular measure should not be included in the notice. It should be noted that while the court may give directions in this regard, it will remain the duty of the Secretary of State actually to draft the terms of the measure as this role falls not to the court but to the Secretary of State, with her recognised expertise and responsibility in matters of national security and the measures that are required in order to protect the public. But when doing so following the directions of the court, she will clearly be very constrained in how she conducts that drafting exercise.

I hope that I have provided sufficient assurance to my noble friend and that she will withdraw the amendment.

Lord Hunt of Kings Heath: My Lords, before the noble Baroness agonises over whether she puts this to the vote, the final point made by the noble Baroness, Lady Stowell of Beeston, about the Secretary of State's responsibilities is well taken. I congratulate her on what is probably her first appearance at the Dispatch Box, certainly in this Committee stage.

Baroness Hamwee: My Lords, the noble Lord, Lord Hunt, gets there before me.

Lord Harris of Haringey: As ever.

Baroness Hamwee: No, not as ever, sometimes we are shoulder to shoulder. However, I congratulate the noble Baroness and I am grateful for her reply. It will deserve reading. I take her point about the term being used in control order legislation but I have written down,

I, for one, would not like to tangle with her over whether there is any significance in the term "much the same". If anybody reading Hansard who is better qualified than me thinks that one should take issue with,

I will come back to it on Report. As I say, I will read the noble Baroness's response. I am grateful to her for the detail. I beg leave to withdraw the amendment.



19 Oct 2011 : Column 336

Amendment 24 withdrawn.

Clause 5 agreed.

Clause 6 : Prior permission of the court

Amendment 25 not moved.

Amendment 26

Moved by Baroness Hamwee

26: Clause 6, page 3, line 14, at end insert-

"(1A) The application of subsection (1) extends to-

(a) a proposed extension under section 5,

(b) a proposed variation under section 12(c), and

(c) a proposed revival under section 13,

of a TPIM notice."

Baroness Hamwee: My Lords, Amendment 26 is grouped with Amendments 45 and 46, which also stand in my name. We touched on this matter when I asked the Minister a question about the length of TPIMs earlier this afternoon. I thank him for his response. Nevertheless, in case there is anything more to come out on this, I will speak to these amendments.

Amendment 26 to Clause 6 would provide that Clause 6(1), which makes the rest of the clause apply, extends to extensions, variations and revivals of a TPIM notice. As I said earlier, I had difficulty in following the procedures for the different decisions which are open to the Secretary of State. Therefore, I thought it best not to be too proud about my drafting as I do not have a professional reputation to be concerned about to the extent that other noble Lords who are very well established in their fields do. That is why I tabled that amendment.

Amendments 45 and 46, which seek to amend Clause 13, may already have been answered to an extent in the previous debate. Amendment 45 would provide that condition E-that is, the involvement of the court-would apply on revival of a TPIM. I am encouraged to think that a stopping or pausing of a TPIM might be possible-that is implied by the possibility of reviving one-but that this measure would apply after a TPIM had expired or been revoked. I hope to be told that this is provided elsewhere in the Bill. If it is not, it should apply. If a TPIM notice has expired or been revoked-no doubt, for good reason-all the conditions should then be tested again. I beg to move.

Lord Henley: My Lords, we seem to be moving at quite a speed. My noble friend need not worry too much about her drafting. We have all drafted amendments in the past that we knew were defective in many ways but they are often a useful way of getting the Government to the Dispatch Box to explain what is going on. It is worth going into detail on this issue.

I will deal first with the substantive amendment that the noble Baroness has proposed to Clause 6-to which Amendment 45 is consequential. As drafted, the Bill requires the Secretary of State to seek prior court permission to impose a TPIM notice, other than where the urgency procedure set out in Schedule 2 is relied on. This provides an important safeguard in relation to the initial imposition of TPIM notices by

19 Oct 2011 : Column 337

the Secretary of State. However, as my noble friend has identified, there is no subsequent requirement for the Secretary of State to seek the court's prior permission before making any other decision in respect of the TPIM notice. Her amendment would require the Secretary of State to seek prior permission before making three particular decisions. The first is to extend a notice into a second year under Clause 5. The second is to vary the specified measures, on the grounds that this is necessary for preventing or restricting involvement in terrorism-related activity under Clause 12-that is, where the variation is not a reduction in the measures or one made with the consent of the individual. The third is a proposed revival of a TPIM notice under Clause 13. The Bill does not require court permission to take any of these decisions. However, it provides a right of appeal against the exercise of each of these powers.

7 pm

I understand my noble friend's desire to ensure that the Bill provides sufficient and necessary safeguards in relation to the use of its powers. However, the issue that we need to consider is whether the change she has suggested is necessary or appropriate. It would certainly represent a significant change to what is currently required under the control order regime, in which once court permission has been granted all subsequent decisions of the Secretary of State, including decisions to renew the order, are made by the Secretary of State but with an associated right of appeal.

The control order and TPIM regimes are, of course, relatively unusual in requiring court permission before an order is made or a notice is served. It certainly is not a requirement in any other national security context where the Secretary of State has powers to, for example, deport an individual or deprive them of their British citizenship. However we accept that this initial involvement is a proper reflection of the significant nature of the restrictions that can be imposed under either the Prevention of Terrorism Act 2005 or this Bill. It provides an additional element of court oversight to reflect the significance of the decision to impose a TPIM notice for the first time.

However, my noble friend may not be surprised to learn that in almost every control order case permission has been granted to make the order, including in relation to the detail of the obligations. It is, as always, a question of balance. Our view is that the Bill as drafted gets the balance right by requiring initial court permission to impose a TPIM notice other than in exceptional cases-which is the key initial decision made by the Home Secretary-while allowing the Secretary of State to make subsequent decisions but with an associated right of appeal to the court. We do not believe that the additional safeguards that my noble friend suggests are necessary. I therefore hope that she will accept they are not necessary. As I said, it is a question of balance. Such safeguards would not necessarily represent an effective use of the judge's time.

What we propose is about right. I hope, therefore, that my noble friend will withdraw her amendment.

Baroness Hamwee: My Lords, again I must read what has been said, but I believe that I am satisfied and will remain so. I beg leave to withdraw the amendment.



19 Oct 2011 : Column 338

Amendment 26 withdrawn.

Amendments 27 to 32 not moved.

Clause 6 agreed.

Clause 7 agreed.

Schedule 2 : Urgent cases: reference to the court etc

Amendments 33 to 35 not moved.

Schedule 2 agreed.

Clause 8 : Directions hearing

Amendments 36 and 37 not moved.

Amendment 38

Moved by Lord Pannick

38: Clause 8, page 4, line 26, at end insert-

"( ) Directions under subsection (5) must include a direction that the Secretary of State shall provide the individual on whom the measures are imposed with sufficient information about the allegations against him or her to enable him or her at the review hearing to give (if possible) effective instructions to his or her representatives and information to the special advocate in relation to those allegations."

Lord Pannick: My Lords, I shall speak also to Amendment 49. These amendments concern the disclosure of information to a person who is the subject of a TPIM. As the Committee knows, in the AF case in 2009 the Appellate Committee of your Lordships' House considered what the principles of fairness require as to the disclosure of information in the context of control orders. I repeat my declaration of interest-I represented AF in the Appellate Committee.

The Law Lords decided that a control order is invalid as a matter of law unless sufficient of the case against the individual is disclosed to him so as to enable him to give instructions to his lawyers to answer the allegations against him. If the Home Secretary is not prepared to disclose that much, the control order cannot be maintained. Disclosure to the special advocate does not suffice, said the Law Lords, because the special advocate cannot of course disclose the information to the subject of the order and obtain a response from him.

In the recent Supreme Court case of Tariq v the Home Office, the noble and learned Lord, Lord Hope of Craighead, explained the principle of law at paragraph 81 of his judgment. He said that in AF,

The TPIM, like the control order, involves severe restrictions on the personal liberty of an individual. Therefore, a TPIM is going to be unlawful unless the AF principle is satisfied. This was addressed in today's report of the Joint Committee on Human Rights. At paragraph 1.20, it addressed the Government's argument that the AF disclosure obligation,



19 Oct 2011 : Column 339

of the human rights convention. The Joint Committee points out:

"This is an argument that the Government has already made and lost",

in the context of control orders,

The Joint Committee expressed the view, with which I agree, that the AF disclosure obligation applies in all TPIM cases, because they will all involve severe restrictions on personal liberty. I should add that if the TPIM is less stringent, it is likely to be because the subject of the order is not one of the most dangerous individuals and there will therefore be a weaker security argument for non-disclosure of the essence of the case against such an individual.

Disclosure to the individual of the case against him is not just required by law, but is also of enormous importance as a matter of principle. Your Lordships will recall our earlier debate when one of the reasons given by the noble Lord, Lord Carlile, in his objections to the proposal of the noble and learned Lord, Lord Lloyd of Berwick, that the imposition of the TPIM should be a judicial process, was precisely that the subject is protected by the important disclosure obligations that will be imposed on the Secretary of State. The noble Lord emphasised that.

Amendment 38 would require disclosure of the essence of the case against the individual at the directions hearing. Amendment 49 would make clear that the rules of court must provide for such disclosure.

I have two questions for the Minister. First, does he accept that the AF principle requiring disclosure of the essence of the case against the subject applies in the context of a TPIM, as it does in the context of a control order? Secondly, does he agree that it would be preferable for the matter to be stated in the Bill, to avoid the expensive, protracted litigation which will otherwise inevitably occur?

The Joint Committee's report, which I mentioned, gave its support at paragraphs 1.21 and 1.23 to my two amendments. The Joint Committee added the valuable point that the disclosure obligation should be at the earlier stage of the preliminary hearing, to ensure that the subject of the TPIM can instruct his lawyers-or indeed give information to the special advocate-before the directions hearing. The noble Baroness, Lady Hamwee, has tabled drafting amendments to my two amendments. I shall certainly want to consider them and the suggestion of the Joint Committee before Report but, for today's purposes, I welcome the opportunity to hear the Minister's response to my amendments. I beg to move.

Amendment 39 (to Amendment 38)

Moved by Baroness Hamwee

39: Clause 8, line 5, leave out "(if possible)"

Baroness Hamwee: I absolutely support what the noble Lord, Lord Pannick, said. My amendments to both his amendments were partly in response to an earlier draft, which I think he changed before tabling them. However, the point remains the same: to tease out whether the words "if possible" are objective or subjective to the individual. I am not sure what "if possible" means in the context. I would certainly not

19 Oct 2011 : Column 340

want anything that the noble Lord has included to detract from the thrust of his important amendments and argument. I beg to move.

Baroness Kennedy of The Shaws: My Lords, I support the amendments in the name of the noble Lord, Lord Pannick. I disclose that I act from time to time in what have been control order cases and may be called on to act in future such cases. I reinforce the importance of having disclosure of the essence of the case. The reason for that is that from time to time I have seen that, when disclosure of the essence of the case takes place, it is possible to show that the inferences drawn from certain behaviour are not appropriate.

I give an example. The case involved a student living in a house with other students. We are always concerned that association can be an unfair way to judge someone. An assumption was made and disclosed in the essence of the case against him that a conspiratorial meeting took place at a particular time. It was possible for us to show that he must have been in his room using his computer because, during the period of the meeting, he was in direct contact with the department with which he was studying at university, drawing down the homework that he was required to do. Not only was the university able to confirm that but his computer, which was seized, showed that the timing coincided with when some others were involved in the meeting, when he was in his room studying. Just that allowed someone to show that an inference being drawn was incorrect.

Given that we are putting together a system which is in many ways a source of concern with regard to liberty, it is really important that opportunities are there for people to show that their actions are not the ones that the state is imagining. We must, in drawing up new proposals-some of which I am not completely happy with-draw on the decisions made by judges under the control order regime.

7.15 pm

Lord Carlile of Berriew: I speak in support of the amendment moved by the noble Lord, Lord Pannick. As the lawyers here who are familiar with disclosure issues involving national security will be aware, there are a number of areas in which there has been a great deal of satellite litigation in cases on the issue of disclosure. I suggest to the Minister that a sound principle could be established here.

I suspect that the noble Lord, Lord Pannick, might agree that it is a principle that could be extended to resolve some of the other issues on disclosure that have arisen in cases such as Norwich Pharmacal, Carnduff v Rock-another civil case-the Tariq case and, of course, that of Binyam Mohamed, in which different issues about the level of disclosure that should be permitted have arisen in different contexts. One of those issues relates to the control principle: the control that a foreign intelligence agency exerts over intelligence material available in the United Kingdom. I hope that the noble Lord, Lord Pannick, agrees that reducing all those principles to statutory form would be of great assistance and would provide something that gets us lawyers out of work but increases certainty-that is, legal certainty.



19 Oct 2011 : Column 341

Lord Rosser: My Lords, the amendments of the noble Lord, Lord Pannick, which, as he said, are supported by the recent Joint Committee on Human Rights report, require the provision of information to the individual on whom the measures under the Bill are imposed, to enable that individual at the review hearing to give effective instructions to his or her representatives and to the special advocate about the allegations made against them.

In considering this issue, we are also considering national security. We are conscious of the need to protect people from further atrocities of the kind we have already seen in this country and elsewhere. We are talking about a small number of people whose activities are felt to pose a real threat to the public, but in respect of whom sufficient hard evidence cannot be put before a court in the public domain to enable a case to be made to the standard that has to be achieved for a successful prosecution.

We would not dissent from the provision of information to the individual, provided that it did not lead to the safety or security of any providers or sources of information being put at risk; provided that it did not mean that intelligence provided-perhaps from other countries-dried up, because that intelligence is provided only on the basis that it is not made public; and provided that the provision of the information did not jeopardise national security, including protection from acts of terrorism.

The chairman of the Joint Committee on Human Rights stated:

"We maintain our view that the priority in the Bill should be investigation and not prevention".

We certainly support the view that investigation is important and that, where possible, people should be charged and their case dealt with through the courts in the normal way. However, we do not support the view that the Bill should have prevention of acts of terrorism as an issue of lesser importance. We will want to be satisfied that the effect of the amendments would not be to veer in that direction. We await with interest to hear the Government's position, particularly in the light of the House of Lords judgment in AF.

Lord Henley: My Lords, the noble Lord, Lord Pannick, asked two questions: first, do we accept that the AF principle applies to TPIMs as well as to control orders? I can give him that assurance. It is set out in our Explanatory Notes that we believe that previous court judgments will be binding on TPIMs, as they were on control orders. I do not have the ability to cite cases as authoritatively as my noble friend Lord Carlile or the noble Lord, Lord Pannick, both of whom obviously eat them for breakfast, but my understanding is that they will continue to bind us.

The second question is: do we think that it is necessary to get it on the face of the Bill? I hope that I can explain to the noble Lord why I do not think that that is necessary. We share the desire of all noble Lords to ensure that TPIM proceedings are compatible with Article 6 and we believe that the provisions currently contained in the Bill achieve that. As we explained in our response to the Joint Committee on Human Rights in its 19 July report-I think that

19 Oct 2011 : Column 342

today's was its third report on this issue-the right to a fair trial of individuals subject to a TPIM notice is already fully protected by the provisions contained in the TPIM Bill and the application of existing case law, as appropriate, by the courts.

Paragraph 5 of Schedule 4 to the Bill reflects the read down of the Prevention of Terrorism Act 2005, effected by the 2007 judgment of the Law Lords in MB. As the noble Lord will be aware, the Law Lords read into that legislation, which obliged the courts to ensure the withholding of material from the individual where disclosure would be contrary to public interest, the words,

That has been reflected in the provision in paragraph 5 of Schedule 4 to the TPIM Bill, which provides that nothing in the rule-making power relating to closed proceedings or the rules of court made under it is to be read as requiring the court to act in a manner inconsistent with Article 6. The Law Lords in AF (No.3) confirmed the read down specified in MB and laid down what was required by Article 6 in the context of the stringent control orders before them. There is therefore already provision in the Bill which ensures that TPIM proceedings will be conducted compatibly with the individual's Article 6 rights and, indeed, the Human Rights Act achieves the same effect.

That is all that I want to say at this stage to the noble Lord's amendment. I appreciate that technically we are debating the amendment to the amendment tabled by my noble friend Lady Hamwee. It might be more appropriate for the noble Lord, Lord Pannick, to comment on that. I hope that he will accept my explanation on why we do not think it is necessary to include his amendment. I hope that the assurances that I have given from the Dispatch Box will be sufficient. I hope that my noble friend and then the noble Lord will withdraw their amendments.

Baroness Hamwee: My Lords, I beg leave to withdraw my amendment.

Amendment 39 (to Amendment 38) withdrawn.

Lord Pannick: I am grateful to the Minister for his careful response and to all noble Lords who have spoken in this short debate. I agree with the observation of the noble Lord, Lord Carlile, on the need for certainty in this and allied areas of the law. With regard to the amendment of the noble Baroness, Lady Hamwee, to my amendment, by talking about "if possible" I intended to refer not to the possibility of disclosure but the possibility of the subject of the order providing an answer. I respectfully agree with the noble Baroness that it would be wiser to omit the words, "if possible" to avoid ambiguity.

This is a simple but vital issue. Should the Secretary of State be able to impose these restrictions on an individual without telling him why? It is not just a question of fairness. Nothing is more likely to undermine public confidence in a TPIM than for the Secretary of State to make such an order without telling people why. I am sorry that the noble Lord, Lord Rosser, on the Opposition Front Bench, is not yet persuaded to

19 Oct 2011 : Column 343

support my amendment. His position, as he articulated it, appears to be at odds with the ruling in AF which makes it very clear that the duty of disclosure applies irrespective of national security concerns. I am also sorry that I have not yet persuaded the Minister that this matter should be in the Bill. I am still concerned that on a matter as vital as this, it is not good enough simply for the Bill to state that Ministers must act in compliance with Article 6 of the European Convention on Human Rights, welcome though that is. It is desirable to address the question of disclosure, which has led to enormous quantities of litigation in the past and will inevitably lead to much more litigation in the future if we do not address the matter specifically. It is highly desirable that this matter is put into the Bill in clear, unambiguous terms. We will no doubt return to this matter on Report but for the moment, I beg leave to withdraw the amendment.

Amendment 38 withdrawn.

Lord Wallace of Saltaire: My Lords, it may be for the convenience of the Committee if I report that there has been agreement among the usual channels that we should continue until 8 o'clock, at which point we should have hit our target for tonight. That will enable what is intended as a 60-minute dinner-hour debate to become a 90- minute end-of-business debate, which I have calculated will allow all speakers an additional three minutes to the advisory time. I hope that that is acceptable. Those who have come in early for the debate may wish to go and stretch their legs for 15 or 20 minutes.

Amendment 40 not moved.

Clause 8 agreed.

Clause 9 : Review hearing

Amendments 41 to 43 not moved.

Debate on whether Clause 9 should stand part of the Bill.

Lord Hunt of Kings Heath: My Lords, I shall not detain the Committee long as we had a debate on this matter in the first grouping. Essentially, whatever our view of control orders, there is general agreement that the enhanced judicial scrutiny has been rigorous and the Government have said that such scrutiny will embrace the provisions in the Bill. The Constitution Committee has suggested that to put the matter beyond doubt, the Government should table an amendment to put the matter into the Bill. The noble Lord, Lord Henley, will no doubt have read today's report of the Joint Committee on Human Rights, which endorses that point and says that the surest way to deliver the intense scrutiny that the Government say they intend is to write that explicitly into the Bill.

I doubt whether the noble Lord's arguments have advanced considerably since he gave us the Government's line about two hours ago, so I do not expect him to respond again to this point. All I would say is that I hope that between now and Report he might say that the Government will ponder this matter further.



19 Oct 2011 : Column 344

7.30 pm

Lord Henley: My Lords, I wish to make only one point. I said at the beginning of business that I had only recently seen the Joint Committee's report, which was published at 11 am today, and I had not yet read it in detail. The noble Lord seemed to imply that I would have managed to read it during the course of this debate. For once, I thought it was more important to listen to the noble Lord, and other noble Lords, rather than reading the book. Of course, we will study the report in detail, and it might be that a further response can come between now and Report. I do not think that, as the noble Lord put it, our thoughts have advanced much during the previous two or three hours.

Lord Hunt of Kings Heath: My Lords, the noble Lord, who manages to make marmalade as well as being a senior Minister in this Government, is clearly multitasked and multiskilled. I had thought he would easily have been able to read it while considering how to reply to noble Lords, and indeed noble and learned Lords, in our debate. That has been, as usual, an enlightening response from the noble Lord. I will not oppose that this clause stand part of the Bill.

Clause 9 agreed.

Amendment 44 not moved.

Clauses 10 to 12 agreed.

Clause 13 : Revocation and revival of TPIM notices

Amendments 45 and 46 not moved.

Clause 13 agreed.

Clauses 14 and 15 agreed.

Schedule 3 : Appeals against convictions

Amendment 47

Moved by Baroness Hamwee

47: Schedule 3, page 31, line 20, leave out paragraph 1

Baroness Hamwee: My Lords, I beg to move Amendment 47, and will speak also to Amendments 48 and 51.

Amendment 47 concerns paragraph 1 of Schedule 3, which deals with appeals against convictions for breaches of measures. My amendment is to enable me to ask the Minister why appeals are limited in this way. A breach of a measure may turn into a criminal offence, but that is a separate matter from the measure itself. If an individual is convicted of that breach, there are consequences for the future, as there are with every criminal offence.

The Minister may say that the measure itself will have consequences. Of course it will. That is executive action without a criminal standard of proof, and so on, as we have discussed. The consequences will be

19 Oct 2011 : Column 345

social consequences, in a wider sense. If there is a conviction for a breach, that has other consequences, because of the record of the individual. Therefore, Amendment 47 is to ask the Government to explain the thinking behind that paragraph.

Amendment 48 would take out subsections (1) and (2) to Clause 18. These are about appeals against the measure, and again the amendment is to enable me to ask questions. Clause 18(1) says that there may be an appeal only on a question of law. I would be grateful if the Minister could help the Committee on how one distinguishes between fact and law in this context. How does this apply not just to the decision that there should be a TPIM order but to the detail of the measure? Is proportionality, which we have been talking about quite a lot, a matter of law? I hope to be told that it is.

My final amendment in the group is Amendment 51, which relates to Clause 19. Clause 19 provides for the Secretary of State to make three-monthly reports to Parliament, which is welcome. Clause 19(2)(a) provides that this includes and extends to the powers of a Secretary of State "to impose measures". I am suggesting that we should add wording that makes it clear that this covers not just the fact that a TPIM order has been imposed but the detail of the measures within that TPIM order. I appreciate that it would not be proper to put every detail into the public domain. However, I do think it would be proper for the Secretary of State to spell out the sort of thing that she is doing, so that we may understand-better than we can if we are simply told that measures are being applied-just what the impact of those measures may be. I beg to move.

Lord Henley: I hope I can answer the noble Baroness's three points on these three separate amendments, which we are taking together. I shall start with Amendment 47, which deals with Schedule 3. As the noble Baroness is aware, Schedule 3 provides that an individual who has been convicted of the offence contained in Clause 23 of the Bill-contravening, without reasonable excuse, a measure imposed under a terrorism prevention and investigation measures notice-has a right of appeal against that conviction if the notice or relevant measure is subsequently quashed, and if they could not have been convicted had the quashing occurred before they were prosecuted. Schedule 3 provides that the court must allow such appeals. This is obviously not a provision that we expect to be used on a frequent basis. However, its clear purpose is to provide an important safeguard, and to ensure that the person will be able to get a conviction overturned for contravening a measure that the court has subsequently quashed.

It is therefore important that the schedule be agreed to. I know that the noble Baroness is only suggesting removing paragraph 1, but that is the operative provision of the schedule, and without it the remainder of the provisions in the schedule are neutered. I hope she therefore accepts my explanation and can withdraw that particular amendment.

Amendment 48 deals with subsections (1) and (2) of Clause 18 and is really a question about why we are considering having appeals only on a point of law. We believe that the limitation is appropriate, because in cases such as this it is the court of first instance that is

19 Oct 2011 : Column 346

the appropriate fact-finding body. It is this court that has developed a particular expertise and body of knowledge in this area of national security, among a small and experienced body of judges who hear these cases. This makes it the right court to review all the material upon which the Secretary of State relies to make her decisions and make findings on that basis.

With regard to the appeal on a point of law, the noble Baroness asked us whether we thought proportionality would be a point of law. Dare I say it-I might have to be corrected-but I think she is probably correct, and it probably would be. If I am wrong, I will correct that in due course. I will certainly write to her and copy that letter to other noble Lords who have taken an interest in these matters.

Finally, I turn to Amendment 51, which deals with Clause 19. Clause 19, as the noble Baroness is well aware, places a duty on the Secretary of State to report to Parliament on a quarterly basis on the exercise of her powers under this Bill. These are specifically the powers to impose measures on a person by TPIM notice, extend a TPIM notice, vary the measures specified in a TPIM notice, and revoke or revive a TPIM notice.

Amendment 51 would amend Clause 19(2)(a) to add "and the measures imposed" at the end of the subsection. The relevant provision would thus state that the requirement was for the Secretary of State to report on her powers to impose measures on an individual via a TPIM notice under Section 2, and the measures imposed. As noble Lords will appreciate, the details of the operation of the system and the particular cases will necessarily be sensitive and could not be disclosed publicly. However, taken together, the list of matters on which the Secretary of State must report ensures that key information about the operation of the system will be in the public domain, and will be debated regularly. Crucially, this will include information about the extent of the Secretary of State's use of her powers and the number of cases in which measures are imposed.

We understand that there is interest in as much information as possible being made available about the operation of the system and about the cases of those individuals subject to the measures. That has certainly been the case in relation to control orders and it is likely to continue in relation to TPIMs. Having that information available will help to ensure that any debate about the powers is as informed as possible.

Lord Hunt of Kings Heath: Perhaps I may ask a question about that. The Minister said that the report laid by the Secretary of State would be as comprehensive as possible within the constraints of the information that she can make available. He then said that that could be regularly debated. As your Lordships know, there is a debate to be had next week on annual orders as opposed to a system of parliamentary scrutiny every five years. Does the Minister envisage other ways in which such information can be debated in Parliament?

Lord Henley: The ingenuity of the noble Lord and others will find ways in which this House, which seems to have a more liberal approach in these matters, can debate these quarterly reports. There are Questions,

19 Oct 2011 : Column 347

Questions for Short Debate and all range of things, but it is not necessarily for the Government to offer those. As regards the debate next week, I look forward to it.

I hope that that deals with the points made by my noble friend. If not, perhaps we can discuss it further in due course, but I hope that today she will feel able to withdraw her amendments.

Baroness Hamwee: My Lords, I am grateful for the reassurance on my Amendment 49, which takes a stand on a question of law in this context, and I hope that the Minister and I are correct. On Amendment 51, I accept the sensitivity of the detail, which I acknowledged in introducing the amendment. However, I remain concerned that the type and extent of the measures being imposed are reported on. The clause is welcome and I want to make it work well for Parliament and others in the transparency for which we are all aiming. I might therefore like to take the opportunity to discuss with the Minister how one can meet the point without going over the top, which I am not trying to do. I beg leave to withdraw the amendment.

Amendment 47 withdrawn.

Schedule 3 agreed.

Clauses 16 and 17 agreed.

Clause 18 : Proceedings relating to measures

Amendment 48 not moved.

Clause 18 agreed.

Schedule 4 : Proceedings relating to terrorism prevention and investigation measures

Amendments 49 and 50 not moved.

Schedule 4 agreed.

Clause 19 : Reports on exercise of powers under Act

Amendment 51 not moved.

Clause 19 agreed.

7.45 pm

Amendment 52

Moved by Baroness Hamwee

52: After Clause 19, insert the following new Clause-

"Impact of measures

(1) Within 28 days after the imposition or variation of any measures, an assessment shall be made of the likely impact of the measures-

(a) on the individual on whom they are imposed, and

(b) on the immediate family of the individual.

(2) The assessment shall include an evaluation of the impact on mental health.

(3) Further assessments shall be made not less frequently than every three months and at the expiry, repeal or revocation of the measures, and thereafter during such period and at such intervals (but not more frequently than every six months) as the individual may request.



19 Oct 2011 : Column 348

(4) The assessment shall be made by an independent person appointed by the Secretary of State who shall be appropriately qualified in conjunction with such persons as the individual may nominate and who shall be entitled to make separate reports.

(5) The costs of assessments made under this section shall be met by the Secretary of State."

Baroness Hamwee: I shall speak also to Amendment 53. This would be a new clause dealing with a matter that I regard as of the utmost seriousness. It is addressed in particular to mental health issues.

The proposed new clause is by no means an opposition to mechanisms for addressing protection of the public and the prevention of terrorism. It is a separate issue about how measures are applied in practice and about the impact of those measures. I have mentioned the matter already today but it is important to repeat it as the context for the provision. It concerns in particular tipping the individual, his family and members of his community into the precise action that we are seeking to avoid; to avoid tipping an individual into breach of the restrictions on him, which is a criminal offence and may turn into a criminal someone who is not a criminal and has no criminal record; and to avoid our failure to recognise that at the centre of all this is a human being.

The moment my new clause was published I saw a drafting error, but I will speak to it as I intended it to be. It would provide for an assessment to be made on the likely impact-my drafting error is that I failed to refer to the actual impact-of the imposition of measures, or the variation of them on the individual and his immediate family every three months, when measures expire or are repealed or revoked, and thereafter at intervals which the individual may request. The assessment I talk of would include an evaluation of the impact on mental health. It should be made by an independent person appointed by the Secretary of State but not only by that person. I suggest that of course the person should be appropriately qualified, but shall work in conjunction with the nominees of the individual who can make separate reports. That is an important point because it is all too easy and obvious that independent experts appointed by the Secretary of State, as has happened with control orders, are perceived as agents of the Secretary of State being there to gather evidence and information.

I have proposed the new clause for the reasons I have already given and because one needs to increase the opportunity for transparency around this whole area. I have said that the costs should be met by the Secretary of State because I thought that someone might ask about that. It seems to me that the numbers of cases we are talking about are small and this would be entirely proper given that the measures applied are potentially so very stringent. Amendment 53 would bring these assessments within the remit of the independent reviewer.

The experience of control orders has been not only that in some cases they are very damaging but that the controlee is essentially broken. I want quickly to share with the Committee the story I heard earlier this week of a controlee who had failed to report to the police on time. I asked how late he had been and was told that it was one hour. His control order of course

19 Oct 2011 : Column 349

required him to report at a particular time and having failed to be there on time he was charged with a breach of his order. He found himself in Pentonville. The shocking part of the story is not just that: it is that the individual will not apply for bail. For him, being in Pentonville is preferable to being under a control order. That is what the state has done to some individuals. If that is what we are going to do to them in order to protect the rest of society, we should know what the impact is.

Lord Hunt of Kings Heath: I do not quite understand the noble Baroness. Presumably this person was in breach of the control order by not attending on time. I do not understand the issue.

Baroness Hamwee: The issue is that to this individual, being in prison is more acceptable than being in his place of residence under a control order, with the restrictions imposed by the system. I am sure that the noble Lord has heard, from people who had been under control orders that were quashed, the impact they had on them and their families. The interference with anything that any of us would recognise as a normal life has been literally intolerable. That is the point I make to the Committee. I beg to move.

Lord Carlile of Berriew: My Lords, I applaud and support the sentiment behind my noble friend's amendment, but I suggest that it is not only unnecessary but would replace a considerable amount of flexibility with something rather less. On the case history that she has just recounted, I say that nobody has been arrested and charged with breach of a control order for failing to turn up at a police station once, an hour late. In every case, there has been an immense degree of tolerance before anyone has been charged. It is only after a very serious breach, or persistent and repeated breaches, that people are charged.

Nor do I recognise the credibility of the account my noble friend was given. When I was the independent reviewer of terrorism legislation, on a relatively small number of occasions-but several-I was able to visit controlees in their own homes, alone, one to one. On some occasions I visited them in homes to which they had been relocated. The notion of a state-appointed psychiatrist, however independent, turning up unsolicited at their home would have been no more comforting than One Day in the Life of Ivan Denisovich. It is a pretty bad idea.

I ask the Minister to confirm that the following occurs and will occur. First, where there is any suspicion or indication of the poor mental health of the controlee or of any member of his or her family, medical facilities will be put in place, including, if necessary, psychiatrists and psychologists, to deal with the problem; and that such facilities will be flexible and will be provided at the cost of the Home Office. Secondly, will the Minister confirm that the Control Order Review Group has met regularly ever since control orders were brought in, that it includes various people involved in scrutinising and observing the person concerned, and that it has always discussed such issues where they have arisen? Will he further confirm that under TPIMs, some kind of review group-I hope it will not be called TPIMsORG

19 Oct 2011 : Column 350

-will continue to meet and carry out that function? There is no evidence whatever that controlees have been treated improperly in the way that my noble friend set out.

On one occasion I suggested to the Home Office that there were some difficulties from time to time in giving controlees a single point of contact-perhaps a local police officer-who was aware of the situation and whom they could telephone if they had a problem. I believe that that has been put right, that they do all have someone to contact, and that sympathetic consideration is given to all difficulties of the kind that my noble friend has in mind.

Lord Henley: My Lords, my noble friend has been consistent over the years in her concern about the impact of control order obligations on individuals and on their health, in particular on their mental health. My first point is that TPIM notices are intentionally more limited in nature than those that can be imposed under control orders. We will no longer have lengthy curfews, compulsory relocation to another part of the country and total bans on communication equipment. Therefore, whatever the result, one would hope that the effect on individuals would be less than under control orders.

Despite the limitations that should significantly reduce the impact on individuals subject to TPIMs, I appreciate that my noble friend remains concerned about these issues. I agree with my noble friend Lord Carlile that the amendment does not achieve what it sets out to do. The noble Lord put a series of questions to me about the current position and about what will be the position. He asked whether medical facilities would be provided by the Home Office for those with poor mental health. He then asked about the Control Order Review Group, and about whether something would follow it. He could not quite bring himself to work out the acronym, but no doubt something can be put in place that will have a similar role. I am sure that my noble friend asked those questions in a rhetorical manner and that he knows the answer certainly to the first two questions. Such things will be provided by the Home Office: CORG exists; and we will certainly consider something suitable to replace it in due course.

Although I cannot accept my noble friend's amendments, I say that the Bill, together with the relevant control order case law and the duty of the Secretary of State to act within convention rights, already ensures that the Secretary of State will give the appropriate consideration to the impact of the measures on the individual and on their family, including the impact on their mental health, both before imposing a TPIM notice and during the year or however long it remains in force. With that, I hope that my noble friend will withdraw her amendment.

Baroness Hamwee: My Lords, I ought to take two minutes to withdraw the amendment-that might be obscure to anybody reading this-in order to take us to the agreed time of 8 pm. Of course I understand and accept that the measures proposed by the Bill are less severe than control orders. That is the point of the Bill. Not all of them are, because there is the possibility of enhanced TPIMs. I take the point, but it does not quite cover the ground.



19 Oct 2011 : Column 351

I understand the point made by my noble friend Lord Carlile about a series of breaches. I talked earlier-I am not sure whether he was in his place-about the need not just for the Secretary of State to be reasonable about reporting requirements, but for police officers on the ground to be reasonable.

Of course, our experiences and what we hear are not the same, and I could never have the particular experience that he has had, but I hear of the danger of people who are under such orders becoming so despairing that they almost do not care if they breach.

The real thrust of this amendment is the importance of the involvement of professionals who are of the individual's nomination, not just those who are provided by the Home Secretary. If I say "by the state" it may sound like One Day in the Life of Ivan Denisovich but I say "the state" quite deliberately because that is how it is perceived in this situation. My amendment suggests the formation of something akin to a case conference with the considerable involvement of an individual or organisation of the person's choosing because of the interpretation or perception, which I suppose is inevitable in this situation, that anybody who is provided by the state is not going to be neutral, far less on the individual's side. Having said that, I beg leave to withdraw the amendment.

Amendment 52 withdrawn.

House resumed.

Arrangement of Business

Announcement

8.02 pm

Lord Wallace of Saltaire: My Lords, the Question for Short Debate standing in the name of my noble friend Lord Lexden is now the last business for today. We have reached today's target amendment for consideration on the Terrorism Prevention and Investigation Measures Bill and have adjourned the same until Wednesday next week. The consequence for those taking part in the QSD is as follows: speaking times for my noble friends Lord Lexden and Lord Shutt remain unaltered, but the speaking time for all other Peers taking part in the debate is now increased from six minutes to a maximum of 10 minutes.

Northern Ireland: Economy

Question for Short Debate

8.02 pm

Asked By Lord Lexden

Lord Lexden: My Lords, I am immensely grateful to have been given this opportunity to raise an issue of the greatest importance, not just to Northern Ireland

19 Oct 2011 : Column 352

but to the United Kingdom as a whole. It is an issue which for many years inevitably yielded precedence and priority to the suppression of terrorism and to the protracted search for political stability. The most vivid memories of pain and suffering will long endure in your Lordships' House, adorned as it is by distinguished former Secretaries of State for Northern Ireland, by ex-Ministers who served with them and by leading figures from the Province itself. Thanks to their efforts, and to those of so many other people of good will, the security situation has been transformed and devolution successfully restored. This remarkable progress throws into sharper relief the issue-the third great issue in the Province's life-which is the subject of this evening's short debate: its economic future. Peace and political stability need economic progress as their third companion.

Since I have never held any public office connected with Northern Ireland, a brief autobiographical note might not be entirely misplaced. My interest in the Province was first aroused while I was at Cambridge by a former Westminster MP for South Belfast, Conolly Gage, whom Churchill had failed to persuade to take junior office in 1951. He was a staunch unionist with strong progressive views. Between 1970 and 1977, I taught history at Queen's University, Belfast, where I had the inestimable advantage of working with-indeed, sitting at the feet of-my noble friend Lord Bew, at whose bootlaces I continue to stare.

During the two years before his murder, I was Airey Neave's political adviser. On the morning that he was killed in March 1979, we finalised the Northern Ireland section of the Conservative manifesto for the forthcoming election. "I wish we had more to say about the economy," he remarked. There was just one sentence:

"We recognise that Northern Ireland's industry will continue to require government support".

The words may have been few in number, but they heralded Thatcherite spending on a large scale, maintained unfailingly under successive Governments of both parties, to sustain Northern Ireland's economy during the troubled years that lay ahead by attracting inward investment, supporting the Province's precious small businesses and protecting its agriculture, which constitutes an important element of the Northern Ireland economy. Public spending per head was held at a level that was one-third greater than in the rest of the country.

Such measures were essential in those times, but they have not supplied the Province with the foundations for sustained economic prosperity in the generations that are to come. The long years in which Northern Ireland required significant support have left it in a position where public spending is equivalent to more than two-thirds of GDP. Taxpayers in Great Britain have been called on to a substantial extent; they now provide the resources for around half of all government spending in Northern Ireland. That surely gives them a powerful interest in the future of the Northern Ireland economy.

Despite high public spending, in no other region is so large a percentage of the population of working age economically inactive. Yet, in this same region entrepreneurs once built vast businesses that made the north of Ireland a leading industrial centre, part of a mighty web of enterprise that also embraced Glasgow

19 Oct 2011 : Column 353

and Liverpool and created the economic basis for Ulster's enduring political union with Great Britain. In 1894-I mentioned that I was a historian-the president of the Belfast Chamber of Commerce proudly boasted that the annual output of linen yarn in the north of Ireland,

I have no idea whether the great man's calculations were accurate, but this claim that Ulster's linen industry surpassed all others is incontestable.

Having achieved so much in the past, Northern Ireland can surely set out with confidence to re-establish a thriving private sector of significant size in a form suited to the conditions of the 21st century. That, of course, is the rebalancing to which my Question this evening refers. The absolute necessity of striving to achieve it has been fully recognised by the coalition Government. Indeed, it is one of their principal objectives set out in their programme agreed after the election. Last year's Budget spelt out the details: the process of rebalancing,

The case for such action is constantly on the lips of my right honourable friend the Secretary of State for Northern Ireland, who puts the arguments for it with brio and such dedication. Speaking at the Conservative Party conference a fortnight ago, he reviewed progress, reiterating once more that the Government's,

Here my right honourable friend touches on one of the preconditions of success in Northern Ireland; that is, effective partnership between the coalition Government and the Executive at Stormont. It is surely the duty of us all to encourage the Executive to play their full part in the work of partnership. Funds have been supplied to establish enterprise zones. Proposals are now awaited from the Executive. It is frankly disappointing that five months after the Northern Ireland elections the Executive have yet to produce a programme for government.

At the very centre of discussion about how the Northern Ireland economy can be rebalanced stands the question of introducing a rate of corporation tax in the Province substantially lower than that which now applies throughout the country. The proposal stirs some instinctive unionist scepticism. Those, such as Joe Chamberlain, who called for home rule all round-devolution for all four constituent parts of the United Kingdom-at the beginning of the 20th century believed in devolved institutions with equal powers. But what we have today is, in the current unlovely phrase, asymmetrical devolution with more power vested in some devolved institutions than in others.

In this context, should Northern Ireland have its own low rate of corporation tax, particularly since across its land border, the Republic of Ireland-a key

19 Oct 2011 : Column 354

competitor in many areas-has long been reaping the benefits of a 12.5 per cent rate? The issues were set out in a consultation document, Rebalancing the Northern Ireland Economy, published by the Treasury in March. The responses were numerous with business organisations and the five parties in the Northern Ireland Assembly all expressing strong support for change. A ministerial working group is now being set up to examine in detail the complex and technical matters that need to be addressed. My noble friend Lord Shutt will no doubt have something to say about it.

Like the rest of our country, Northern Ireland today needs jobs; that is, jobs in the private sector, jobs that will last, jobs in the industries of the future and jobs that will match the vast range of talent that exists in that wonderful Province. The highly regarded Northern Ireland reform group estimates that a corporation tax rate of 12.5 per cent could create as many as 90,000 new jobs over a 20-year period. Without new and fulfilling jobs for young people in particular, much of the Province's great talent will leave and find employment elsewhere. Northern Ireland cannot afford such loss. That, above all, is why economic prosperity, springing from private sector growth, is essential to secure the vital third element of the full restoration of the Province's fortunes after its long, dark years. That is why so many people believe that the case for a 12.5 per cent corporation tax rate is now so compelling.

8.13 pm

Lord Brooke of Sutton Mandeville: My Lords, your Lordships' House is in debt to my noble friend Lord Lexden for having obtained this Question for Short Debate slot and for his discrimination in choosing this topical subject. I emphasised the very rebalancing of this Motion in the speech that I made in your Lordships' House in the debate which followed the final declaration of peace and the return of the Assembly. We should also congratulate him on the enchanting comprehensiveness of his introduction.

It is now nearly two decades since I gave up ministerial responsibilities in Northern Ireland, so I shall leave the corporation tax issue to others, including, retrospectively, my noble friend, who for understandable reasons maintain closer familiarity with the Province. That does not exculpate me for not having pursued it more vigorously when I did have ministerial responsibility. Perhaps since I came to Hillsborough direct from four years in the Treasury I had too much respect for its then rationale when, of course, the present level of devolution within the total realm was still a thing of the future.

I shall, however, briefly relate one telling and not irrelevant moment in the 1997-2001 Parliament, when I chaired the Select Committee on Northern Ireland affairs. We were engaged in a report on cross-border petrol smuggling between the Republic and Northern Ireland and were examining the then Treasury Minister responsible to Parliament for Customs and Excise. I asked the Minister to remind the committee of the Republic's responsibilities under the Kyoto Protocol for carbon emissions. The Minister asked to be allowed to consult the accompanying Customs official and responded audibly, within the hearing of the committee, to the latter's advice, with the words, "That can't be

19 Oct 2011 : Column 355

true", until appreciation sank in that the Republic enjoyed privileged treatment under the protocol as a non-industrial economy, whereas Northern Ireland's treatment was as part of the United Kingdom. I do not blame the Minister's Private Secretary for deleting the expostulated remark from the official record but it was an incidental insight into the precise extent of the Treasury's understanding of the Province's difficulties.

In my confidence that others will fully air the corporation tax dilemma, let me turn to personal experience of my own 50 years ago this autumn and look at the debate's gravamen from the private sector's end of the telescope. I realise that the debate is about Her Majesty's Government's encouragement but one of the ways in which the economy will be rebalanced is through entrepreneurial activity. Fifty years ago, I was the first head-hunter in the United Kingdom. I was the seventh consultant member of a small firm which had been established five years earlier in Chicago. I undertook to join it for a year to set up a new office in London, although I told the eponymous founder of the firm, who died in January of this year, that I had no idea whether there would be a responsive British Market; I had no idea whether I would be any good at it; and I had no idea whether I would enjoy it. In the event, we planted an acorn, we have harvested a forest-of course including subsequent competitors, some of which were started by our own people- and that firm is now the largest firm of its kind in the world to be still in private hands, which, in that industry, is exactly where it should be. It was on that firm's business that I first visited Northern Ireland in 1963.

Why is that relevant to Northern Ireland today? I go back again to my time there as a Minister when anything that created private sector activity was of course a plus. I used to keep my eyes open for gaps in the economy where the Province was consuming products or services, however small, that it was not itself making. Where I needed to buy services, which I could have bought in England but which were available in the Province-my mind goes back to a fair amount of bookbinding; certainly, to a commemorative sampler; and, more grandly, to a fibreglass dingy for the Hillsborough Castle lake, which had then an island and a boathouse but no boat, that was baptised as the "Tom King" after my predecessor-I bought them out of my own pocket as a tiny contribution to the local economy. When there was no local product that I could buy, I made quiet inquiries as to why not.

We all know the skills base of the local economy. Today there is not time to tell the moral tale in the public sector of the Passport Office crisis at the beginning of the 1990s and the Province's dramatic resolution of it-unlike Dr Watson's remark about Sherlock Holmes and the Giant Rat of Sumatra, the world is ready for that story but we have no time. But it was a particularly vivid index of the Province's superlatives.

I hope that out of this debate, whether through Her Majesty's Government or the devolved Executive or even from an enterprising charity, will come an analysis of all the things that today the Province consumes but does not make or internally provide. I hope too that at least one person of 27, as I was 50 years ago, has the excitement of creating a business that creates a new

19 Oct 2011 : Column 356

industry or service-of course, there is nothing about being 27 that is mandatory-and that there will emerge from the analysis a whole raft of opportunities. Anything that Her Majesty's Government do in the mean time to favour the entrepreneurial spirit will be a bonus and to be welcomed the more in the Province.

Finally, as to the public sector, I remind your Lordships' House of Lenin's doctor, the Armenian Armand Hammer, to whom Lenin offered a monopoly of a single product in the new Utopia. Dr Hammer, who could recognise a bureaucracy when he saw one, chose pencils, and from that acorn grew Occidental Petroleum.

8.20 pm

Lord Alderdice: My Lords, I am grateful to and congratulate my noble friend Lord Lexden on obtaining this debate on rebalancing the economy of Northern Ireland, which is a challenge. The value of this debate in your Lordships' House is that we are not under any compulsion to do other than try to explore the questions honestly and in a fashion that might be helpful to Her Majesty's Government in fulfilling their responsibilities in relation to the Province.

I note that in chapter 2 of the book that launched the consultation there is a list of some of the strengths of the Northern Ireland economy: a relatively young population, high quality education and training, persistently competitive labour costs, a flexible and responsive skills system, a track record of attracting inward investment, 100 per cent broadband coverage, good transport links, a relatively low crime rate, strong tourism potential and so on. That list, more or less, is one that many of us in Northern Ireland are familiar with because we have spent a good deal of our lives trying to use lists of this kind to sell Northern Ireland to other places. Indeed, it is not hard to be convinced that we have these great strengths and potential. Some noble Lords have laboured for some years in Belfast City Hall. It is hard to inhabit such a building and not feel a sense of confidence and pride in a city that could produce something of that kind for its main building. It is an acknowledgment of the strength of the local economy at the time. Belfast is the city that produced and launched the "Titanic", and we still produce T-shirts that say, "She was all right when she left us". There is a great sense of pride in these things, and anyone who in the great days of the shipyards stood in one of the hulks that were being produced-cathedrals of engineering-could not but get a lump in his throat and feel a sense of pride about living in a place that could make such extraordinary products.

But it is important not to inhale when dealing with your own propaganda and to recognise that, although there are great strengths in Northern Ireland, our problems with the economy did not all come from the Troubles. Of course we had great strengths at the end of the 19th and the beginning of the 20th centuries when we were a central feature of an empire that spanned the world, and with all sorts of economic differences from the world in which we now live. It was also the case that many of those who laboured long and hard in the shipyards, the linen mills and other industrial aspects knew very poor circumstances in terms of their own health and welfare. That was one of the reasons we were successful too.



19 Oct 2011 : Column 357

The truth is that after partition in the early 20th century, when the world moved into depression and we did too, it became increasingly difficult to sustain a Northern Ireland economy that was independent in terms of its own taxation and economic strength. As the 20th century moved on, it became even more difficult for our industries to be competitive, and long before the Troubles broke out we were in very substantial difficulties and already needed support from the rest of the UK economy. There was a certain amount of optimism in the 1960s when Brian Faulkner was Minister of Commerce. He certainly brought a degree of energy, enthusiasm and a sense of optimism that there were new possibilities, and it is not at all clear how things would have gone had he been able to remain in post, the Troubles had not happened, and so on. But if we stare long and hard at the reality we quickly come to the conclusion that we could not assume that, without the Troubles and all that came with them, everything would have been well in the Northern Ireland economy.

The Troubles added to our problems in two ways. First, they chased away business, whether internally or through inward investment. Who would want to invest in a country that was at war with itself? But there was another almost insidious way in which our economy was damaged, and that was through the sustenance that was necessary from the British Government and the British Treasury to maintain some cohesion in the community, ensure that public services were delivered, and that security did not suffer any more than was absolutely necessary. What that did over two generations was to produce a population in Northern Ireland that was extraordinarily dependent on the public sector and public expenditure. It is not just that it was the case in practice; it was a culture that was espoused and adopted-it was taken into the whole community.

When my noble friend talked about "jobs, jobs, jobs", as he quite rightly did, the problem with the phrase is that there is an assumption that it is up to the Government or someone else to provide us with those jobs, whereas actually what we want is a community that sees itself taking the initiative in order to provide its own wealth creation. I am afraid that I found it enormously difficult in east Belfast-a community that would like to live with the myth of an enthusiastic, entrepreneurial and largely unionist population-to persuade local people to start up their own businesses and try to create wealth for themselves. It was always a question of being dependent on the Government doing something or someone else providing the jobs.

The reason I mention this is not because I am particularly sceptical about any of the proposals around. My noble friend mentioned the corporation tax proposal, which seems to me to be a potentially substantial jolt. It is not going to be a requirement that the Northern Ireland Executive should institute a particular level of corporation tax. The challenge is this: are you prepared to take on board this opportunity? I hear in Scotland, for example, all sorts of talk about wanting the power to set corporation tax, but the Government there are not even implementing the capacity they already have to raise income tax, should they choose to do so. It makes me wonder whether what is in truth required there is a serious economic power or whether it is a political game being played for wholly other reasons.

19 Oct 2011 : Column 358

But the possibility that people would take responsibility for something as large as corporation tax, or perhaps more modestly, aircraft passenger duty, is to say to our local elected Assembly and Northern Ireland Executive, "You now have the responsibility as well as the power to do some of the things that are necessary to make a change. Are you up for it?". That, in a sense, is the question that I come back to my noble friend with because, as has already been said, some months on from the election to the Assembly and the establishment of the Northern Ireland Executive, the plan is not at all clear.

No one went into the election in Northern Ireland in any great doubt as to which would be the major parties of government or who were likely to be the First and Deputy First Ministers. When an election was held in the United Kingdom as a whole and the largely unexpected outcome-at least in some circles-of a coalition came into being, it took only a few days to put together a coalition agreement. One might be critical or otherwise of it, but the fact is that it took only a few days-and there was no clarity before the election that there would be that kind of an outcome. In Northern Ireland, it was absolutely clear what the outcome would be, and months later we still do not have the kind of plan that is necessary to take the country forward. Although the question of corporation tax and other fiscal freedoms is important, and although it is true that we have great strengths and possibilities, we have two major problems. One is the fact that our peripheral position and our previous dependence on heavy engineering and other aspects of the economy are disadvantages, and we have a cultural disadvantage in that we have become an institutionalised, dependent economy which is much more difficult to get out of because it needs a change in people's mindset.

But I come back to the fact that there are strengths. We have two universities and relationships with other universities that produce ideas and the possibility that those ideas could be productive and help to build up and strengthen our economy. It is also true that, even now, many of our most creative young people find themselves having to leave Northern Ireland rather than be able to stay and develop their skills in order to build our economy. If there are things we can do to help nudge-perhaps it requires more than a nudge; perhaps it requires a really substantial push-those who now have the responsibility for Northern Ireland to take that responsibility seriously for the development and rebalancing of the economy, and if this debate contributes to that, I think we will have done a worthwhile job and made a contribution.

8.30 pm

Lord Bew: My Lords, I thank the noble Lord, Lord Lexden, for securing this important debate on the need to rebalance the Northern Ireland economy. I would also like thank him for his very kind words about me, but to say one thing: he misrepresents the flow of intellectual influence. When the noble Lord, Lord Lexden, was an academic at Queen's University Belfast in the 1970s, he with Professor John Vincent wrote a book called Governing Passion. For my generation of graduate students, it was a powerful and exciting

19 Oct 2011 : Column 359

book that had a huge impact on the way we wrote about politics. I therefore put it on the record that the flow of intellectual influence went that way.

It is important not only to thank the noble Lord, Lord Lexden, for securing this debate but to draw attention to the fact that we have had, at least in the past year or so since the change of Government, a more intense debate about the Northern Ireland economy. Whatever the merits or demerits of the argument about corporation tax, to which I shall come in a minute, it is important that we have had the beginnings of a serious discussion. It has inevitably been delayed because of the whole question of the Troubles and the recovery from them, and the domination of public debate by the need to find a secure settlement.

When the issue of corporation tax first entered the public domain as a crucial subject, my own reaction was initially quite sceptical. I always thought that it was good that we were talking about it because at least we were talking about the need to rebalance the Northern Ireland economy, at least it was a new idea, and at least it was focusing public debate on an economic question. None the less, I was sceptical, and the noble Lord, Lord Lexden, has already referred to part of the reason for it: you could reasonably argue that unionism in the past century had one idea that really worked. That one idea was equality of taxation means equality of services and good things flowing from the London Treasury in return. This was Edward Carson's idea. It is why, for example, before Irish independence he always supported vigorously in this House expenditure of money by the British state on the west of Ireland. Those of us who know the west of Ireland know that some of the public amenities that you can find there and in the ports are a product of decisions made by the British Treasury before 1916 and 1921. It has always been a logical idea that a unitary state implies a unitary taxation system and a unitary flow of benefits to the citizens in return throughout its regions. That was the ground for my scepticism.

Now that we exist in a different world with devolution in the United Kingdom, there is much conversation about the possibility of the devolved systems having different taxation regimes. It seems widely considered to be entirely compatible with the continuation of the union that one has taxation regimes that are not as simple and uniform as those with which I grew up. There is therefore an argument on that score that uniformity may not as be as important as many people considered it to be in the last century.

There is another simple point: Northern Ireland does not do too badly with foreign direct investment-it actually does better than the other regions of the United Kingdom. It has major problems with the productivity of workers and of the culture, which has been so admirably described in its historical evolution by the noble Lord, Lord Alderdice, but it does better than other regions of the United Kingdom for FDI.

I began to wonder even so whether it was right that we should talk so much about corporation tax. I looked at the companies that went to the Republic of Ireland, which is obviously Northern Ireland's major competitor. Many companies, it is argued, go there

19 Oct 2011 : Column 360

primarily because of the low level of corporation tax, but most of those companies do not say that. They tend to put it low on their list of reasons for moving to the Republic of Ireland-there was recently a case of a company that was considering Derry but went to Kerry. Companies do not say that corporation tax is the reason; they tend to put it at about number five on their list of reasons. Being a credulous sort of person, I tend to believe them.

But this is where my mind begins to change on this topic; I have begun to rethink. I am not convinced that companies tell us the full truth about their decision-making in this matter. I give an example that has struck home to me in the past 18 months watching the public debate in the Irish Republic. It brings home some of the difficulties for Northern Ireland. Google along with a number of other American companies about 18 months ago began to criticise the educational system in the Irish Republic, saying, "It is not as good as you think it is and this is a problem for us". The then Irish Minister of Education, Mr Batt O'Keeffe, immediately responded and took these criticisms quite seriously. The new Minister, Ruairi Quinn, has said in a memorable but graphic phrase, "We have been codding ourselves about the quality of our educational system". The concerns of the American companies were highlighted by a number of international reports that seemed to show that Ireland was sliding down, particularly on the mathematical side. There are great concerns, for example, about the quality of maths in Irish schools now. This crisis has been brilliantly covered by Sean Flynn, the education correspondent of the Irish Times, in a series of magnificent articles. At the turn of the year, he described 2010 as a very bad year for Irish education.

However, in the past few weeks, Google, one of the leading companies making this criticism of the education system, has announced that it is going to Dublin and not to Belfast, which was also a bidder, for a major new investment. So it turns out that you can believe that a society has significant defects in its educational system that create problems for such American companies with what they are looking for in their workforce, but they still, oddly enough, end up in the place with the best tax regime. That is what has made me cynical about the reasons given by companies for acting as they do. Details of that sort enhance the case for corporation tax reform for the benefit of Northern Ireland.

I understand that it is possible that this issue may be stuck. The Treasury has objected, as have a number of very serious economists. There are complications around the issue that are nothing to do with Northern Ireland's place in the United Kingdom but a lot to do with Scotland and what Scotland wants to do, as has already been alluded to by the noble Lord, Lord Alderdice. If the Treasury is going to say no and if the public argument is going to go against the case for corporation tax, which has been made eloquently by many Northern Irish politicians of all parties and by the Secretary of State, Owen Paterson, we have the problems as outlined by the noble Lord, Lord Alderdice. We have the problem of a dependency culture that relies on the state and the Treasury, for reasons that are not the fault of the people of Northern Ireland.

19 Oct 2011 : Column 361

What, then, is going to be done? There is perhaps one slight hope: that an unintended consequence of the changes in university fees and the system in operation in the United Kingdom might be that some of the talent that currently goes to English and Scottish universities will stay in Northern Ireland, which might in turn turn out to be a very useful development for the economy.

I understand and respect the arguments of the Treasury going back to the Varney report, which was a serious document, but if the answer is going to be no, the question must be: what else are we going to do? At this point, I am not hearing much else.

8.39 pm

Lord Black of Brentwood: My Lords, I join others in congratulating my noble friend Lord Lexden on securing this debate. I know from my long association with him that there is no greater or more eloquent champion of the people of Northern Ireland, its history and heritage, and the opportunities for its future than my noble friend, as has been evident today in his choice of debate and the passion of his remarks.

Economic issues are perhaps of more significant importance in Northern Ireland today than almost anywhere else in the United Kingdom. I would like to speak about one small but crucial sector of Northern Ireland's economy-its creative industries. As the media play a role in that I should declare an interest as a director of the Telegraph Media Group. The creative economy is important not only because of the private sector jobs it can create and the investment it brings, but because it is so often at the very cusp of the public/private divide that is the defining characteristic of the Northern Ireland economy, which we are discussing this evening. As such, the creative economy could and should have a vital role to play in rebalancing the economy of the Province.

Northern Ireland is already home to a lively cultural sector, employing, according to the Northern Ireland Executive, some 36,000 people, and there are many success stories to tell-such as the emerging film and TV production centre, with Northern Ireland being used as a base for filming major productions such as HBO's "Game of Thrones" and Universal's "Your Highness". Northern Ireland Screen's target is for direct, achievable, levered investment in the Northern Ireland economy of £112 million from screen production activities between 2010 and 2014.

Northern Ireland has a long-standing musical heritage. Indeed, Belfast will be hosting the MTV European Music Awards on 6 November.

It also has a vibrant newspaper industry, with over 50 publications throughout the Province. Papers such as the Tyrone Courier have even beaten UK-wide circulation trends. This publication is believed to have doubled its readership in the past 10 years by focusing on key community issues.

But there are some serious economic issues ahead in this sector. For understandable reasons, there have been cuts to the Creative Industry Innovation Fund, which helps leverage investment in the cultural economy. Perhaps more worryingly, there seems to be little strategic

19 Oct 2011 : Column 362

thinking by the Northern Ireland Executive about how to develop infrastructure for the creative industries and allow them to play their part in economic regeneration. The Northern Ireland Programme for Government for 2007 to 2011 made scant reference to this sector. I hope the next one, when it appears, will remedy that.

The newspaper sector is facing particular challenges. In recent years its workforce, according to Skillset, has shrunk to around 1,000 people, and the workforce of the publishing sector as a whole has halved. There are serious commercial question marks hanging over the viability of some of the Province's smaller local newspapers, themselves a vital part of Northern Ireland's civic tapestry.

One of the key problems is the change that is taking place in the public sector, ironically enough. Fewer public sector jobs has meant reduction in public sector recruitment advertising, which accounts for some 70 per cent of the recruitment revenues on some newspapers. The depressed property market, which is probably more stressed in Northern Ireland than anywhere else in the United Kingdom, has had a similar impact on classified advertising revenues. These pressures come at a time when, ironically, weekly newspapers in Northern Ireland are often at the centre of boosting the Province's private sector businesses, while initiatives such as the Newspaper Society's local business accelerators campaign, launched only today and welcomed by the Prime Minister, can play an important part. It is an excellent initiative. Papers such as the Banbridge Leader and the Dromore Leader and the MidUlster Mail and Tyrone Times have launched successful business awards, highlighting the strength of local SMEs and the resilience of larger businesses.

A number of things can be done to help strengthen the creative economy-the jobs it supports and the investment it brings, as well as the vital part it plays in the cultural life of Northern Ireland-as the economy is rebalanced.

First, it is vital that we do what we can to help the Province's newspaper industry. There are continuing concerns about the threat to statutory public notices in newspapers, a key source of income as well as an essential tool for members of the public and community groups to find out about public events and developments in their area. Already local council public notice advertising spend is down 37 per cent in Northern Ireland, which is hitting newspapers hard and opening up a democratic deficit. Further reductions would be intolerable.

Secondly, I welcome what the Government are doing to help publishers in Northern Ireland, as elsewhere, diversify their businesses. The Government are planning three local TV stations in Northern Ireland and there was considerable interest in the recent visit of the Secretary of State for Culture Media and Sport to promote those plans, which can help the media in Northern Ireland expand beyond print and offer cross-selling of advertising packages across the full range of media-newspapers, TV, radio and Internet.

It is however vital that the UK regulatory regime recognises the realities of today's highly competitive local media markets, allows greater flexibility over media mergers and acquisitions and does not continue

19 Oct 2011 : Column 363

to block small, family-owned newspaper publishers from developing and growing their businesses in the deeply troubling way that happened only this week in a proposed merger relating to the Kent Messenger Group and Northcliffe Media.

Thirdly, there are significant opportunities to begin, through heritage-led regeneration, to build hubs of creative industries that will help promote private sector investment and jobs. Such regeneration can be a great catalyst for private sector growth in areas of major deprivation-for instance around the Carlisle Memorial Church and the Crumlin Road Gaol and Courthouse in North Belfast. This is a focus for the valuable work of the Belfast Buildings Preservation Trust, which I strongly commend. The trust, along with the Northern Ireland Design Alliance, is seeking to use the creativity that is the driving force of this sector to help in the delicate task of rebalancing economic structure and policy in Northern Ireland. This will also help the heritage-based industry, in particular, to forge new links with EU member states and with the United States of America, countries with which there has traditionally been little engagement in this sector and, as a result, lost opportunities for private sector investment.

Another significant opportunity is the BBC's decision to move programme and production responsibility outside of London. Speaking last week at the Belfast Media Festival, director general Mark Thompson spoke of his hope that BBC Northern Ireland would become a "fully-fledged creative hub". That will contribute not only to national network programming but, provided the BBC opens its arms to the private sector rather than acting as a publicly funded competitor, it can create another unrivalled opportunity to promote the economic rebalancing that is central to this debate.

In all these areas, policy needs to be developed to encourage relevant new skills, to help in the creation of new economic hubs, to support risk-taking and a creative approach to regeneration, and, above all, to provide leadership in a sector where this has traditionally been in short supply. In that way, the richness of Northern Ireland's cultural sector-its music and performing arts, its screen and TV potential, its newspaper publishing industry and new media and its heritage and built environment-can play a long-term role in attracting private sector investment and new jobs and, at the same time, enhancing the quality of life and of enjoyment of people throughout the Province.

8.48 pm

Lord Empey: My Lords, like others, I thank the noble Lord, Lord Lexden, for securing this debate. One interesting point that has not yet been made is that this debate is about rebalancing the economy of Northern Ireland. It is not about the latest security atrocity or terrorism-something that we have been living with for so long-but how the economy can be improved. It is about time that we looked at this issue. At the end of the day, rebalancing and strengthening the economy is one of the tools that we can use to prevent further outbreaks of terrorism and maintain the isolation of those who are prepared to take up

19 Oct 2011 : Column 364

arms against the democratic wishes of the people. The noble Lord, Lord Lexden, has done a twin service in securing the debate.

I, too, am interested in the decisions on air passenger duty. The Treasury announced the formal process yesterday and of course there will be negotiations with the Northern Ireland Executive. It will not be a for-nothing negotiation on behalf of the Executive. They will probably find that, just as the same principle will apply to corporation tax, the loss of revenue will eventually come out of the block grant. Having been involved at the start of the route development fund in about 2000 or 2001 which helped us to secure the transatlantic service, I am obviously anxious to see it maintained. Only a year or so ago, we got the New York Stock Exchange to set up in Northern Ireland. What kind of message are we sending them if we suddenly say we are stopping the very aircraft that gets them to and from their headquarters? We want to remember, going back 10 years, that we had one international flight out of Northern Ireland. It went to Amsterdam. We are now competing with air passenger duty in Dublin of €3. The Executive will have to take the decision that is necessary to make up the shortfall in funding.

One sector that sometimes gets left behind is the agri-food sector. At present, it accounts for some 20 per cent of Northern Ireland private sector employment. Everybody had been saying that financial, hi-tech or IT services were the solution. The dotcom bubble burst, then the financial services bubble burst. Throughout the bad days after the crash in 2008, the agri-food sector and the land-based industries, which are a much greater proportion of the Northern Ireland economy than in the United Kingdom as a whole, kept on steadily going. Invest NI, which I had some part in creating, had taken a view in recent years that it would concentrate its activity on jobs that produced salaries of £25,000 a year or more. In most cases, the agri-food sector did not come across that. The average salary there is currently some £20,000 to £22,000. However, in light of current circumstances and given the plans that the Irish Republic has announced to grow its food sector by 40 per cent by 2020-Scotland has also announced that it intends to grow its food sector-if we were to do the same thing it would have a dramatic effect, creating between 7,000 and 8,000 jobs directly and a significant number in addition.

Given the circumstances that the world finds itself in, being a significant provider of food is not a bad place to be. In the current circumstances, while I accept the need for high-value-added jobs, we have to be more realistic in the current labour market and economic situation. I would be inclined to give significant support by having a major plan to develop the agri-food sector, not only on the food processing side but particularly in research. There is a lot of research money in Europe. We get just about-and no more-our share of it. I strongly urge the Executive to pursue this because we can collectively achieve a lot more by doing so.

Much has been said about corporation tax. I am not going to rehearse the arguments. I regard it as only one of a whole series of tools. I support the idea-I have always done so-but there is no silver bullet that will fix the problem. I know from my own experience

19 Oct 2011 : Column 365

on the skills side that, as a United Kingdom, there is still in excess of one-fifth of our population that is not adequately literate. Northern Ireland is actually slightly better off than the rest of the UK in that regard, but what a statistic for a country that prides itself on being one of the top economies of the world.

We saw the social problems in the summer during the riots. The common denominator by and large, with some exceptions, was the absence of basic skills. When we translate all of that back to Northern Ireland-the noble Lord, Lord Alderdice, made a number of very important points about the culture-we might say that people have been bred up on the benefits system. That is not where their natural home is, but to get away from it, when you add all the benefits-free school uniforms, dentistry, healthcare, opticians and so on-you would need nearly a bank manager's wages to make it worth your while to work.

Given the combination of that with the lack of opportunity, what do we expect people to do? They have to put food on the table somehow, so it is up to us, in rebalancing the economy, to get the message across. I have been in the middle of Stormont for years, and have seen how the carve-up happens at the table whenever the money from London is put on there-everybody grabs their bit and that is the way it works. We have to realise that that endless flow that we have seen for many years is no longer endless and it will get progressively less. That is an inevitability as the economy of the United Kingdom faces up to the fact that we talk about deficit reduction but in fact we have structural debt and all sorts of debt, and it is going to take a generation to clear it. Northern Ireland is not going to be able to rely on very substantial amounts of public expenditure to survive.

Therefore, I entirely support the comments of the noble Lord, Lord Black. I believe very strongly in the creative industries. There is tremendous potential and we have some wonderful talent. Look at our golf. We have huge opportunities there to exploit that from a tourist point of view and in other ways. What other small province in the world could have produced so many talented people in such a short time? It is statistically almost impossible but we have done it. When we add in our land-based industries and our experience in food production, in those three areas alone there is potential for significant growth.

It is depressing in the current circumstances to see youth unemployment in particular rising, but I retain residual optimism that ultimately the entrepreneurial spirit and indeed the genes that were in the economic life of this part of the United Kingdom can be revitalised. It is a matter of concern that so far into the new Assembly progress has not been made. I know how hard it is to produce these programmes for government. It is a very tiresome process, but at the end of the day if we do not get on quickly, we are not giving the right leadership to the industry that is so necessary for our future prosperity.

8.57 pm

Lord Kilclooney: My Lords, I should like to fill the gap-I was not aware of this debate until today, unfortunately. I congratulate the noble Lord, Lord Lexden,

19 Oct 2011 : Column 366

on having this debate. As the noble Lord, Lord Empey, says, the great news is that we are discussing the economy of Northern Ireland and not the security situation.

I declare an interest as chairman of the largest newspaper group in Northern Ireland and the Republic of Ireland, employing some 300 people, so I know something of the problems of business in both parts of that island. I am delighted to hear the noble Lord, Lord Black, mentioning the Tyrone Courier and certainly he will be well reported in the Tyrone Courier next week because it is the largest weekly newspaper in Northern Ireland. One thing I disagree with him about is that he says the small papers are in trouble. No way-small papers are succeeding. We have the largest circulation in Northern Ireland, with 75,000; the big papers, like the Belfast Telegraph, are down to 50,000. The weekly papers are succeeding; the daily papers are in decline right throughout the United Kingdom-so be careful at the Telegraph!

The noble Lord, Lord Lexden, said that devolution was successful. I was deputy leader of the Ulster Unionist Party at that time with the noble Lords, Lord Empey and Lord Trimble. We negotiated the Belfast agreement. To say it is successful is going a bit far. I am more inclined to agree with the present Secretary of State for Northern Ireland in his speech in Manchester a few weeks ago when he said it is getting to the time when they have got to make decisions. People in Northern Ireland are losing respect for the Northern Ireland Assembly, and if it collapses then the gap is filled by terrorism yet again. It is important that decisions are made.

Look at the decisions that have been missed. We mentioned golf; the great international football pitch-no decision; the extension of Belfast City Airport-no decision. The replacement of the 11-plus-abolished; now we have three 11-pluses.

Lord Empey: Five.

Lord Kilclooney: Well, there is one for integrated schools, one for Roman Catholic schools and one for state voluntary schools, which is amazing. On John Lewis's planning application at Lisburn, there is no decision. There are no decisions being made and sooner or later the public in Northern Ireland will catch on, which will be very bad news there. As far as devolution is concerned, we should place on record our appreciation of the work of Senator George Mitchell, who some of us were with on Monday evening at King's College, and our thanks to the former Prime Minister, the right honourable Tony Blair. He is criticised very much these days in the media but we should place on record our appreciation of the time and effort he gave to bring devolution.

The noble Lord, Lord Lexden, said that GB taxpayers are subsidising Northern Ireland. He forgot to mention places called Scotland and Wales, and other parts of England. They are getting subsidised as well. We are actually quite successful now. We are not the poorest part of the United Kingdom any longer. Wales is-check the figures. Our unemployment in Northern Ireland is now less than the UK average. We have statistics to show that Northern Ireland is progressing and we should not always be on the back foot, trying to say that things are bad there.



19 Oct 2011 : Column 367

I come to the issue of corporation tax. I have always been critical of the Northern Ireland Secretary of State in his campaign to have a lower level of corporation tax in Northern Ireland. If you look at the PwC accountants' report on what attracts an investment, corporation tax is number 10 in the priorities -not number one but number 10. I know that from my experience in business in both Northern Ireland and the Republic. Other things come into account: national insurance contributions; other forms of taxation; education-there was some criticism of that this evening-and labour costs. The noble Lord, Lord Bew, mentioned Google but he did not happen to mention Dell, which left Limerick in the Republic of Ireland. Why? Was it the 12.5 per cent corporation tax? It stayed in the European Union and went to Poland, with its 19 per cent corporation tax, because that tax is not the main factor in deciding how you develop a business. There are many other issues: read the papers tomorrow and see what Aviva has announced in the Republic of Ireland today.

I am going to be told that my time is up. All I can say in closing is that, as a Unionist, I believe in equality of services, equality of taxation and equality of responsibilities.

9.02 pm

Baroness Smith of Basildon: My Lords, this has been a stimulating and, I hope, a very valuable debate for the Government. As the noble Lord, Lord Empey, said, the significance of debating the economy is one that your Lordships' House should be proud of. I congratulate the noble Lord, Lord Lexden, not only on his choice of debate, which has given us the opportunity to debate extraordinarily important issues this evening, but on the way in which he introduced the debate. I think your Lordships' House will be very grateful to him for doing so.

The comments made by the noble Lord, Lord Alderdice, at the beginning of his contribution were very appropriate. He talked about the purpose of tonight's debate, which is to help assist the Government in what is a difficult decision to make: how to rebalance and grow the Northern Ireland economy. It is a debate that, as we have heard tonight, cannot be taken in isolation because the economy of Northern Ireland is inseparable from what has occurred politically, socially and security-wise over 30 years. We recognise that there is higher per capita public spending in Northern Ireland and understand that the Government want to see the level of public spending reduced more quickly there. We all want to see a stronger and more resilient economy, because nothing causes public concern and dissent faster than rising unemployment, the fear of unemployment and poor public-and indeed private-services.

After decades of underinvestment in key services-although not for a lack of spending, as there were very high costs associated with policing and security-there is a real need for public services to improve and be more efficient. Your Lordships' House has to understand that there are special reasons why public spending in Northern Ireland remains higher, and it was clear from the debate tonight that it does. That backlog of

19 Oct 2011 : Column 368

underinvestment did not disappear with the Good Friday agreement or the establishment of the Northern Ireland Executive.

I entirely agree with the objectives of improving the economy, attracting private sector investment and improving skills, as the noble Lord, Lord Empey, said. As noble Lords have said, this has to be done in several ways. A reduction in the level of corporation tax is the main argument put forward in the document on rebalancing the economy. However, I do not see bringing the rate of corporation tax down to 12.5 per cent, in line with the Republic, as a silver bullet. It was Kate Barker who first commented on this in her Economic Advisory Group report. She reported that if a reduction in corporation tax were to be introduced, it would have to be alongside other measures to rebuild the economy. I am not sure whether Kate Barker at that time considered it alongside the reduction in the block grant; I think that came from the Azores judgment. However, we need to look at the other side of the equation and at further cuts in the block grant.

The Northern Ireland Executive are already having to make savings and efficiencies following the cut of £4 billion to £5 billion over the next four years as a result of the public spending review. They are taking action; I am pleased to see that the RPA-the review of public administration-is proceeding to reduce the number of councils. However, I am sure that the Executive will have heard the frustrations expressed tonight in your Lordships' House about the programme for government.

I was the relevant Minister on two levels. I had to look at two decisions: one on the introduction of water charges and another on the 11-plus, which was also mentioned. Neither of those were popular decisions and nor are they now. However, clearly difficult decisions must be taken so I am certainly not against the Northern Ireland Executive having to take political responsibility for their own budget. My real fear is that the cuts already announced are too harsh and too deep, and will bring significant problems to both individuals and the Northern Ireland economy. I was struck by the comment of the noble Lord, Lord Black, about the creative industries and how difficult they are finding some of the cuts that they have had to face.

I welcome some of the decisions made by the Executive in support of businesses. For example, there was an announcement yesterday by Invest NI, which is part of DETI, the Department of Enterprise, Trade and Investment, of a new £50 million fund to provide loans to companies that have not been able to access equity. Despite government promises to get the banks to lend more, that remains a significant problem for many smaller businesses and medium-sized enterprises that are trying to grow. I congratulate Invest NI on a great initiative, which has the potential to make a real difference.

We see a position where the Northern Ireland Executive already have to make significant changes and cuts, and need to attract investment to rebuild the economy. My concern arises because the impact of a reduction in corporation tax could be a loss of a further £300 million or £367 million-different figures have been mentioned. That cut in devolved spending has to be taken into consideration by all who are debating this issue. Where

19 Oct 2011 : Column 369

will that money come from? Which services will bear the brunt of that further cut? That is the area of concern. Is it too high a price to pay? In examining the case for a cut in corporation tax for Northern Ireland, one has to look at the reasons for the growth in investment that we saw in the Republic of Ireland. Was the primary factor in the growth in investment and the increase in jobs that was seen-we do not see it now-a different level of corporation tax?

I am not a tax expert but I have tried to speak to and read the works of those who are. They tell me that the Republic did not compete on just its tax rate. Many experts say that, in effect, many companies are offered a zero rate-they pay nothing at all-and that is part of the reason for the current problems that the Republic of Ireland is experiencing. There was significant growth, yet while the rate of corporation tax remains the same the economy now has significant problems. The level of unemployment in the Republic is significantly higher than it is in both the UK as a whole and Northern Ireland. For example, unemployment in Northern Ireland is a little more than 7.5 per cent, while in the Republic it is 14.3 per cent-up from 4.6 per cent in 2007. Among 18 to 24 year-olds, unemployment has significantly increased here in the UK to just over 21 per cent. In Northern Ireland it is 18 per cent but in the Republic of Ireland youth unemployment is a staggering 31.5 per cent.

Therefore, I urge caution: I worry that some may feel that a cut in corporation tax is enough to encourage that much needed investment. I note that the noble Lord, Lord Lexden, agrees with my concern that on its own it is not enough. We recognise that it is much more complex and that significantly more information is needed. I understand that the Northern Ireland Grand Committee in the other place has postponed its session on the economy and instead is debating the big society because it feels that it does not have enough information at this stage and wants more information before it resumes that debate.

I appreciate that the Government know that there is a lot of work to be done before any decision can be taken but, for the debate to proceed, more basic information is required. The Minister may have this information to hand. I am not clear whether the Government yet know how many companies in Northern Ireland pay corporation tax and at what level. Do we know what the total take of corporation tax in Northern Ireland is? Unless we have those figures it is very difficult to ascertain what the cut in the block grant should be.

The paper suggests that the level of corporation tax tapers off as the level of the block grant goes down. However, if it proves evident that the cut in corporation tax is not having the intended effect, do the Government plan to consider making adjustments to the amount of block grant being removed? I know the issue will be resolved but the Azores judgment specifically says that there has to be a balancing to ensure that any money that could be gained through corporation tax has to be taken away from another area. Therefore, if the amount gained through cutting corporation tax is not realised, does the amount of the block grant still go down by that amount? I have reservations about this

19 Oct 2011 : Column 370

devolved matter but if we are to work with the Executive and the people of Northern Ireland to secure the stable and resilient economy that we want to see we have to listen to local decision-makers and take on board their arguments on these issues.

Finally, I understand that the Government are establishing a working party-it may already have met-with Northern Ireland representatives and UK Ministers. Given the significance and impact of this issue it would be helpful to have representatives from all the political parties on the Executive discussing and examining it.

9.12 pm

Lord Shutt of Greetland: My Lords, I congratulate the noble Lord, Lord Lexden, on securing this splendid and important debate. I am grateful to your Lordships for the quality of their contributions. Noble Lords have travelled down memory lane but in so doing have provided tremendous insight into the journeys and experiences that have ultimately brought them to this House. It is a privilege to listen to so many wonderful contributions.

The coalition Government's commitment to rebalancing the Northern Ireland economy is one of the key objectives we share with the Northern Ireland Executive. The recent announcement by the Chancellor that air passenger duty in Northern Ireland would be reduced and then ultimately devolved to the Assembly shows that we are prepared to act decisively and creatively in order to keep the economy moving. I believe we all agree that the Northern Ireland economy is overreliant on public sector spending. The situation is understandable-one of the sad legacies of the Troubles is that the economy stagnated in Northern Ireland while it grew elsewhere. The support of the public sector was necessary, but both now and in the longer term relying on those levels of public spending is unsustainable.

The Northern Ireland Executive and Invest Northern Ireland have had some notable successes in attracting investment in recent years, with new entrants to the Northern Ireland market such as the New York Stock Exchange and Citigroup and the expansion of existing businesses such as PricewaterhouseCoopers-all creating jobs which add value to the Northern Ireland economy. However, these successes are not enough. Northern Ireland still has some way to go and, for that reason, the Treasury consultation paper on rebalancing the Northern Ireland economy set out some radical proposals for discussion.

The business community has made the case that a reduction in corporation tax to a level similar to that in Ireland would kick-start inward investment and growth, sending a resounding message that Northern Ireland was open for business. Those responsible for attracting inward investment in the Republic are adamant about the role their business tax regime has played in ensuring that even during the global economic downturn Ireland remains at or near the top of the global rankings for attracting inward investment and jobs. The head of the Irish economic development agency has said that the 12.5 per cent corporation tax rate is the "cornerstone" of Irish industrial policy.



19 Oct 2011 : Column 371

However, we need to be cautious-as has been repeated here-because low corporation tax is not a silver bullet. Infrastructure, education, training and the planning regime all play a key role, too. The Exchequer Secretary has written to the First Minister and Deputy First Minister about the creation of a working group to further examine issues raised during the consultation period. The work of that group will be vital in gaining deeper insight into the potential costs, benefits and administrative hurdles associated with a tax reduction. We must not try to pre-empt the outworkings of that process. No decisions have yet been made, but we all look forward to the insight that the ministerial group will give to the issue.

I will now endeavour to pick up the points raised during the debate. The noble Lord, Lord Lexden, referred to the working group and hoped that I would add something on it. The noble Baroness also referred to it. It is only in recent days that the invitation was put to the Northern Ireland Executive asking them to nominate Ministers to serve on a group. Their decision was to come up with four Ministers-the First Minister, the Deputy First Minister, and the two Ministers responsible for finance and for trade and industry. The point was made about business as usual and getting on with life in the way in which others would. The four Ministers have been put up. The Executive were asked, "Who would you like to serve on the group?". It was not even asked of them, "How many would you like? Who would be the appropriate people?". The Executive have chosen those four people because of their function. They will, of course, be able to report back to the Northern Ireland Executive. Three parties who also have jobs in the Executive are not among those four people. In effect, it is the people themselves on that Executive who have come up with the four people who they think are right to serve on that group.

Lord Kilclooney: As to the cost of reducing corporation tax in Northern Ireland, the Chancellor of the Exchequer during his most recent visit to Northern Ireland said that reducing the tax could mean a reduction in the block grant of £400 million. This committee will now consider what would be the cost of the tax reduction. Is it not surprising that various businesses and organisations supported the reduction of corporation tax without even knowing how much it was going to cost the people of Northern Ireland?

Lord Shutt of Greetland: There is work to be done, which is why the committee has been set up to look at the detail of how this would work. Think about this: in this jurisdiction, we have income tax rates of 20 per cent and 40 per cent, and 50 per cent for people earning in excess of £150,000. In the Republic, the tax rates are 21 per cent and 40 per cent. In this jurisdiction, we have VAT of 20 per cent. In the Republic it is 21 per cent. It is even stevens.

On corporation tax, our rate is at 26 per cent, being reduced to 23 per cent, but in the Republic it is at 12.5 per cent. The Republic has held discussions with Europe as to how to endeavour to solve its troubles. Of course, it was under great pressure not to have that low rate of corporation tax. I find it instructive that the

19 Oct 2011 : Column 372

Republic has fought tooth and nail to retain a 12.5 per cent rate. I turn to the noble Lord, Lord Bew, who has been moving on this issue. The Republic's clear view that that 12.5 per cent rate has been so important concentrates the mind. I understand that.

The noble Lord, Lord Alderdice, asked whether the Northern Ireland Executive are up to the job. It is not for me to take a view on whether people are up to the job. They have been elected and, under the system there, various people have executive roles. I am led to believe that we will not have to wait that much longer for a programme for government. On rebalancing the economy, the discussions are not a done deal, but if the rebalancing on corporation tax can take place, that may well energise them to look at other areas where the Executive can do what they can do to rebalance the economy.

Five sets of people are involved: much depends on the devolved Government, what they can do and the powers that they have, including with what is clearly a well-thought-of organisation, Invest Northern Ireland; there is also what this Government can do, although because of devolution that is somewhat limited-that is one reason why this idea has come from the Secretary of State; there is the involvement of Europe; there is the use of the cross-border entities, particularly on tourism; and, very importantly, there is the inventiveness of the private sector itself, which is a point that has already been made by several noble Lords.

I was very impressed by the contribution of the noble Lord, Lord Black of Brentwood. I am always impressed by that which I do not expect and do not know about which arises in debates in this House. On culture, the city of Derry/Londonderry will be the city of culture in 2013. Bearing in mind the detail of what the noble Lord had to say, I felt that he could well be placed as a consultant to the Northern Ireland Executive on cultural matters.

The noble Lord, Lord Empey, referred to food and was the one person who said that this was not about bother in Northern Ireland but about the economy of Northern Ireland. It is not for the UK Government to say where Invest Northern Ireland's priorities ought to be. The noble Lord makes the very valid point that for so many reasons it is clearly an area that should be looked at as a possibility for investment. Of course, it would be for the Northern Ireland Executive to take that view.

I am concerned about the time. My time is up. If there are any specifics and anything that I have been asked about to which I have not responded, I will endeavour to do that. It has been a splendid debate on the possibilities of what can be done, based on the rebalancing report and splendid introduction made by the noble Lord, Lord Lexden. I hope and believe that so many of the contributions will be noted by Her Majesty's Government as we go forward.

House adjourned at 9.25 pm.


Next Section Back to Table of Contents Lords Hansard Home Page