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Amendment 12 would mean that the Secretary of State could not restrict the individual's ability to associate or communicate with "specified descriptions of persons". This provision is necessary because, in appropriate cases, it may be necessary, for example, to prevent the individual communicating, without prior permission, with persons living outside the United Kingdom. In such a case, it is not practicable or possible to specify all the named individuals to whom this applies. In the case of this particular example, I can reassure my noble friend that this would not prevent the individual seeking permission to speak to particular individuals, such as family members, who are abroad. The effect of the provision would be that the individual would need to provide further details about individuals with whom he wished to communicate in order to allow the Secretary of State to make an informed decision about whether to permit the communication.
In relation to Amendment 20-an amendment to Condition D in Clause 3-I can confirm that, as currently drafted, the legislation will require the Secretary of State to consider issues of proportionality as part of the consideration of the necessity of individual measures to be imposed under a TPIM notice. I can therefore assure my noble friend that the additional words that she suggests are not necessary in order to achieve the desired effect.
I turn now to Amendment 40. The noble Baroness's amendment would add two new subsections to Clause 11. That clause currently simply requires the Secretary of State to keep under review whether Condition C-the necessity for measures-and Condition D-the necessity for specific measures-continue to be met. Amendment 40 would put on a statutory footing the requirement for a review group of officials to consider cases on a quarterly basis and to report to the Secretary of State. This review function is undertaken in the control order context by the Control Order Review Group. I can confirm that a TPIM review group will be established for the new regime to perform this function on a quarterly basis.
I turn finally to Amendments 42, 43 and 44. They build on proposals that my noble friend put forward in Committee. When debating my noble friend's previous set of amendments in this area, I made the point that
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There is an extensive framework of judicial oversight and full appeal rights in relation to the TPIM notice, the measures specified in it and their impact. The individual will have the opportunity to make their own representations on these matters, including submitting assessments prepared by any person they wish. If a measure is considered to have a disproportionate impact, it will be revoked by the Secretary of State, and if it is determined by the courts to have such an impact, the courts will be able to quash it or direct its revocation or variation. We should also remind ourselves that the overriding purpose of the Bill is to protect the public from a serious and sustained risk of terrorism. It is therefore right that the Government should weigh their responsibility to protect the public heavily when considering the proportionality of their decisions.
The Home Secretary can be faced with difficult decisions when considering what restrictions are necessary and where to strike the balance of proportionality between the rights of the individual and the rights of the wider public to be protected from that person. The High Court has specifically accepted that an individual's mental health does not automatically trump the national security case against him and the right of the public to be protected from the risk of terrorism. This serves to underline the difficult balancing act that will have to be conducted by the Home Secretary in each and every case.
The Home Secretary's decisions are necessarily informed by sensitive information about individuals' involvement in terrorism-related activity and the threat they pose to the public. It is this information that tips the other side of the scales and against which the impact of the measures must be weighed in order to arrive at a reasonable and balanced decision that accords sufficient weight to the need to protect the public. This information would not be available to the commission proposed by these amendments, but it will be fully taken into account by the courts and the Home Secretary when reviewing the ongoing necessity and the impact of the measures.
It therefore seems that the amendments put forward by my noble friend do not provide exactly the right balance. The approach I have outlined of careful ongoing review and rigorous judicial oversight strikes
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Baroness Hamwee: My Lords, I certainly do not intend to press any of these amendments and I am grateful to the Minister for his explanations. I will comment on three of them. I am interested that a solicitor holding his client's money might be providing financial services but am happy to accept that interpretation. On the first of the amendments, I take the Minister's point about needing to use the correct terms, but I hope that every measure will be absolutely clear about the area as well as the place which is included-not, for instance, an "area around" or the "environs of" Heathrow Airport. If necessary, it would be proper for a map to be produced so that the individual as well as everybody else can be absolutely certain about what area is designated for this purpose. On the proposal for an independent commission, I am not seeking to challenge the architecture of the Bill and I am well aware of the court's ruling that national security is not to be trumped. However, I hope that the Government and the new review group will take into account the points I have made, and the noble Baroness, Lady Stern, has made so powerfully, about, among other things, the need for an independent take on what is going on and to involve in the assessments people of experience and, where appropriate, non-members of the review group with that relevant experience. Having said that, and having thanked the Minister, I beg leave to withdraw Amendment 9.
(a) to report to such a police station, at such times and in such manner, as the Secretary of State may by notice require, and
(b) to comply with any directions given by a police officer in relation to such reporting."
Lord Pannick: My Lords, with the consent of the noble and learned Lord, Lord Lloyd of Berwick, I shall speak to Amendment 16, which is in my name and the name of the noble Lord, Lord Macdonald of River Glaven.
A TPIM notice may be issued under the Bill by the Secretary of State where she reasonably believes that an individual is or has been involved in terrorism-related activity. Amendment 16 seeks to substitute a test of balance of probabilities. The argument in favour of this amendment is very brief. If the Secretary of State is not satisfied on a balance of probabilities that an individual is involved in terrorism-related activities, surely there is no justification for taking these exceptional legal measures against him.
I asked the Minister on the first day in Committee, at cols 312 to 313 of Hansard, whether there would be any impediment to national security if the balance of probabilities test were to be adopted. The Minister did not suggest that any such conclusion had been reached in any of the reviews that had been undertaken. I remind your Lordships also that on the first day in Committee, at col. 301 of Hansard, the noble Lord, Lord Carlile of Berriew, with his extensive experience, said that he would have no difficulty if the balance of probabilities test were to be the test adopted in the Bill. I hope the Minister will be able to accept the amendment.
Lord Lloyd of Berwick: My Lords, I support the amendment spoken to by the noble Lord, Lord Pannick. It covers the same ground as my amendment, which would have amended Clause 6 by substituting civil standards of proof for "obviously flawed". I agree with every word that the noble Lord, Lord Pannick, has said.
The great advantage of the balance of probabilities as a test is that it is flexible. At the more serious end, it approaches the criminal standard. There could hardly be a more serious finding to make against an individual, as has been said often today, than that he has been engaged in terrorist activity. Therefore, the burden of proof in these cases ought to approach the criminal standard. There is not the slightest justification for a burden of proof which is less than the civil standard.
With one exception there is no precedent that I can find in English law for a serious finding, such as is involved here, being made on the basis of reasonable belief. In the earlier debate I referred to many instances of prevention orders being made by the civil courts,
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This is a very grave finding. As I suggested earlier, it is a finding which justifies a standard of proof on the balance of probabilities rather than reasonable belief. I support the amendment for the reasons that have already been set out.
Baroness Kennedy of The Shaws: My Lords, I, too, support the amendment. It was always a great source of regret and sorrow to me that during Labour's years in government we saw an erosion of the standards of proof on many different fronts. I remember getting support from the Conservative Benches and agreement that erosions of the standard of proof were taking place. Therefore, this rather strange volte-face by the coalition Government has come as a surprise to me. I want the Government to think again about this erosion of the standard of proof. As noble Lords who have already spoken have said, the consequences are serious. This House should not contemplate having anything less than the balance of probabilities.
Lord Judd: My Lords, I, too, support the amendment. Inevitably my argument relates back to what I said on a previous amendment, but it is absolutely crucial that we should have the maximum possible support across all communities for what is being done. If the Secretary of State is to have these great powers, which the House has reaffirmed today, then we must fall over backwards to ensure that justice is nevertheless seen to be done, and not just done. In that sense, it must be very convincing indeed when the Secretary of State acts. The amendment is wise and sensible. The absence of the provisions in the amendment again undermines the battle for the hearts and minds of the impressionable young.
Lord Mackay of Clashfern: My Lords, we have to bear in mind that as the Bill now stands, the initiator of this procedure is the Secretary of State with responsibility for national security. The Secretary of State has available to him or her all the information that the state can provide, including on a secrecy basis, on these matters.
When a court is deciding something, the balance of probabilities is a suitable standard because it is not expected to believe one thing or the other; it is to
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Of course, Secretaries of State might be rather special, and they might be able to come to a faith and belief without much in the way of evidence. However, that is taken care of by the language in the Bill as it stands, that the belief must be reasonable. So it is not only belief but a reasonable belief. In other words, the Secretary of State must have available to him or her information as a result of which he or she comes to be convinced that the person has engaged in the activities that the noble Lord kindly laid out for us. I agree that it is an extremely serious matter but the language in the Bill is suitable to a situation in which a decision has to be made, not by someone who has to review the evidence as an impartial judge but by someone who comes to the evidence with the executive responsibility to take the necessary action. In my view, this requirement that the Secretary of State should reasonably believe that the person in question has been involved in these activities, is a stronger and more reliable basis for going forward than a mere balance of probabilities. It is difficult to see how one could be convinced on the balance of probabilities alone.
Lord Lloyd of Berwick: The noble and learned Lord refers to a "mere" balance of probabilities. He will of course be aware of the many cases decided in the highest courts where what he calls a "mere" balance of probabilities can approach the criminal standard, specifically in cases such as these.
Lord Mackay of Clashfern: I agree with that and am very much aware of it, but it is still a mere balance of probabilities. Although it can go very close to the criminal standard, it is still a balance of probabilities that is being used, and I would say that the criminal standard requires a jury in effect to believe-to be sure-that this is what happened. I regard "reasonable belief" as a very strong and appropriate phrase to use where the person initiating the procedure is the person with the responsibility to have before him or her all the necessary material.
Lord Newton of Braintree: My Lords, having stuck my neck out first one way and then the other in the earlier part of our proceedings, I had decided to keep my head down on this one. I want to say to my noble and learned friend, given the views I expressed in the House earlier in the day, that he has made me feel better. It may be respectable to keep my head down, so I shall continue to keep it down.
I would like to raise a point which I raised-obviously rather ineffectively-at the last stage, and that is to ask why the Government make a different provision for the generality of the Bill than for the temporary power
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It does not seem to me that the answer to that question can be that the situation is different. The urgency of the situation-with Parliament not sitting and, as I understand it, a heightened state of security-relates to the ability of the Secretary of State to make an order. However, the balance of probabilities relates to the individual, not to the overall situation.
I am glad to see the noble and learned Lord, Lord Lloyd, nodding. I too feel better now, as it is obviously not a completely stupid question. I do not see where the distinction comes, as we would still be considering individuals. It may be that the noble and learned Lord, Lord Mackay, has answered the question for the Minister, I do not know.
It is very important to start by reminding the House what we have under control orders, what we are proposing and what the amendment proposes. Under the control orders, the standard of proof was a "reasonable suspicion" by the Secretary of State. We considered this, as your Lordships are well aware, in the counterterrorism review, and it was concluded that it was necessary to raise the test of involvement in terrorism-related activity from "reasonable suspicion" to "reasonable belief". Reasonable belief is considerably stronger than reasonable suspicion, as my noble and learned friend Lord Mackay has said. We have raised that standard, as is right and proper. It will provide an additional safeguard, and is consistent with the approach taken in the Terrorist Asset-Freezing etc. Act 2010.
It is obviously a matter where we have to consider proportionality and the appropriate balance. Again, I have to weary the House by stressing the need for that balance. We consider that a change to reasonable belief will not be prejudicial to national security. It is right that the Secretary of State should be able to take action to protect the public in circumstances where she reasonably believes that an individual has been involved in terrorism-related activity and the measures are necessary. I was grateful for the support of my noble and learned friend in this matter.
It was right to raise the standard of proof to reasonable belief, but we do not believe that it is necessary to go as far as a balance of probabilities, which might be a more appropriate action if this amendment had been considered at the same time as the first amendment we debated and if this were a matter for the courts to decide. As it is, this is a matter for the Home Secretary to decide, and we believe that this is the right action and that a move to a balance of probabilities would provide the wrong balance for the main TPIM regime in terms of ensuring that the public will be protected.
My noble friend Lady Hamwee went on to mention the enhanced TPIM Bill. That is a different matter where we are obviously considering much more draconian
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Lord Pannick: My Lord, I do feel able to withdraw this amendment. I do so in particular because the noble and learned Lord, Lord Mackay of Clashfern, tells the House that reasonable belief, in the circumstances, is a stronger test than balance of probabilities. I beg leave to withdraw the amendment.
(2) Measures may be renewed for a further period of one year, and no more, on a further application to the court if the court is satisfied on the civil burden of proof that the individual has been involved in terrorist related activity since the imposition of the original measures."
Lord Lloyd of Berwick: My Lords, very briefly, Clause 5 enables the Secretary of State to renew measures for a further year if conditions A, C and D are satisfied. He does not need to be satisfied of condition B, that there has been fresh terrorist activity during the first year. Amendment 39 has two separate purposes. First, it requires the Secretary of State to be satisfied of fresh terrorist activity during the first year before he automatically renews for the second year. Secondly, it places an absolute limit on renewal of two years. It cannot go beyond that.
Curiously enough, this amendment might have received some support from the noble Lord, Lord Carlile of Berriew. If I remember correctly, it was his view that somebody who had been subject to a control order for two years would have little further potential use as a terrorist. He was rather minded to pose-or had some sympathy with posing-a limit of two years on the extent to which these measures can be renewed.
The Minister said at an earlier stage that it is not the Government's intention to use measures of this kind to warehouse individuals who are suspected of being terrorists. Yet, as we know, they have been warehoused-if that is the right word-for periods of three, four and five years without ever having been charged or tried. That is happening now. The purpose of this amendment is to ensure that that does not happen in future. There should be a final limit of two years. I beg to move.
Lord Rosser: My Lords, very briefly, this amendment seems to provide for a TPIM to remain in force for no more than a year or a lesser period determined by the court. It also provides that the measures may be renewed for a period of no more than one further year if, on application to the court, the court is satisfied on the civil burden of proof that the individual has been involved in terrorist-related activity since the imposition of the original measures. If that is correct, our view is that those considered to be engaged in serious terrorist activity are not often likely to have so changed their intentions within a period of 12 months. For that reason, it would not be appropriate to end the order. The amendment suggests that it would be, unless there was evidence of further terrorist-related activity. If we understand the amendment correctly, our view is that it would detract from the ability to protect the public. We are not inclined to support it.
Lord Henley: My Lords, I get the impression that the House wishes to move on. I never understand these things-I do not know whether the noble Lord, Lord Hunt, wishes to go out for dinner or whatever-but I will endeavour to be relatively brief.
I was amused for the second consecutive amendment as first the noble Lord, Lord Pannick, and then the noble and learned Lord, Lord Lloyd, cited my absent noble friend Lord Carlile as being a likely supporter of their amendments. It is easier to make these assertions in his absence. We will invite my noble friend to look at Hansard in due course and decide whether he necessarily agreed with the noble Lord or the noble and learned Lord. I just say that in passing.
I thank the noble and learned Lord for his explanation, which would obviously change the provisions relating to the period for which a TPIM notice can have effect. I will set out our thinking on this issue. In his model, there would be a requirement for new terrorism-related activity to have taken place while a TPIM notice is in force, in order to allow that TPIM notice to be extended into a second year. Again I must dare to use the word "balance". We do not think that this strikes the right balance in the context of preventive orders of this kind. Indeed it would undermine the ability of the Government to protect the people of this country from a risk of terrorism.
The counterterrorism review carefully considered the issue of time limits and how long restrictions such as these should remain in force on the basis of the same evidence. It concluded that extension of a TPIM notice for a further year should only be allowed on one occasion if the notice continues to be necessary in order to protect the public. After that one extension-up to two years-new evidence would be required to impose a new TPIM notice. That is a significant move away from the position in control orders, which can potentially be renewed indefinitely on the basis of the same evidence where the control order remains necessary.
We are of the view that the ongoing necessity for the notice can be made out for a second year on the basis of the original terrorism-related activity. This is particularly so where that activity is very serious, suggesting that the individual's mindset and intentions, perhaps to do serious harm, will not have changed after just one year subject to restrictive measures. Indeed, there are many court judgments in the control order context confirming that, for the purposes of public protection, ongoing necessity is not dependent on new terrorism-related activity since the imposition of the control order. We do not believe that the new terrorism-related activity should be required in order to extend the original TPIM notice for that one year.
While the Government's view is that TPIM notices should not be used to warehouse people, and should not be imposed indefinitely on the basis of the same evidence-as can happen under control orders if the statutory test continues to be met-a notice that can only last one year without evidence of new activity undertaken while subject to the measures will not be sufficient to disrupt the threat posed by the individuals concerned in many cases.
Again I come back to the question of balance. We believe that the balance is about right in what we propose-that is, one year with the ability to extend it
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"(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum, or to both;
(ba) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both;"
"( ) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003, the reference in subsection (3)(b) to 12 months is to be read as a reference to 6 months."
(a) which would be within the legislative competence of the Scottish Parliament if it were contained in an Act of that Parliament, or
(b) which otherwise confers functions on the Scottish Ministers.
(a) applies (with or without modifications) an enactment contained in, or amended by, this Act, or
(b) otherwise corresponds to such an enactment."
Lord Pannick: My Lords, your Lordships have come to the final amendment on Report. Amendment 53 in my name and in the names of the noble Baroness, Lady Hayman, and the noble Lord, Lord Hunt of Kings Heath, would require an annual review of this legislation in Parliament as is currently the case with control orders.
Our debates at Second Reading, in Committee and today on Report have confirmed that the Bill addresses a fundamentally difficult problem for a free society, which is afflicted by the scourge of terrorism. The Bill, regrettably but necessarily, confers powers on the state to impose substantial restrictions and detriments on persons suspected of involvement in terrorism but against whom no proceedings are brought in the criminal courts. These orders will be imposed by the Secretary of State as an administrative matter, given that your Lordships rejected the amendment proposed by the noble and learned Lord, Lord Lloyd of Berwick. On any view, these are exceptional measures in a free society.
It is vital that the continuing need for such exceptional measures be examined every year. This will serve three important purposes. First, it will impose a discipline on Government. Civil servants and Ministers will need every year to consider the continuing case for the
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In Committee on 1 November-I refer to Hansard cols. 1131-1132-the Minister made three main points. First, he said the Bill contains adequate protection because it provides for a sunset clause after five years. However, 2016 is a long way away, and annual reviews are needed for all the reasons I have given. Secondly, the Minister said the Bill is the product of detailed scrutiny and has struck the right balance in its substantive provisions. The point is that the Bill contains exceptional measures, the need for which will depend on the nature and extent of the threat posed at any particular time. However confident noble Lords may be that the contents of this Bill strike the right balance, this is a context where annual scrutiny is essential. Thirdly, the Minister emphasised that the Secretary of State has power under Clause 21(2) to repeal the powers. However, that is no substitute for an annual obligation on Ministers to come before Parliament so that we can debate, and Ministers can explain to us and to the wider public, whether these wholly exceptional measures are still needed. I beg to move.
Baroness Hayman: My Lords, the noble Lord, Lord Pannick, has spoken with his usual clarity and force and that means I can be very brief. It was the issue of time limiting the provisions of the Prevention of Terrorism Act 2005 that six years ago brought me into conflict with my then own-and then government-Front Bench. I am delighted that the noble Lord, Lord Hunt of Kings Heath, has put his name to the amendment. I have to say, however, that like the noble Lord, Lord Newton, I was disappointed at his attitude on Amendment 1. He invoked the principle of consistency. I think he ought to be careful about that when we review this particular amendment, given that the Labour position then on time limiting was consistently to oppose any form of time limiting on the 2005 Act until two thumping defeats in this House and some fairly vigorous ping-pong.
Lord Hunt of Kings Heath: I am most grateful to my noble-and, dare I say, socialist-friend for raising that. The point I raised on our debate on the first amendment was consistency with the legislation, which we took through and which we were operating.
Baroness Hayman: My Lords, I have always felt that consistency was a dangerous principle for politicians to invoke. I make a serious point here. Of course there
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As the noble Lord, Lord Pannick, has said, when we are departing from the normal procedures and principles of the criminal law-and there are reports of various committees, both Joint Committees and committees of your Lordships House about the exceptional nature of the provisions in the Bill-there is an obligation upon us as parliamentarians to keep that under review, and always be willing to reassess what we have done and how we have done it.
In the words of the noble Lord, Lord Faulks, in our debate in Committee-I hope that I am not paraphrasing him-we have got it basically right in the Bill and there is no point in having an annual squabble about it. However, I do not see this as an annual squabble. I see it much more as the noble Lord, Lord Pannick, did, as the opportunity to reassess both the need and the efficacy of what we have put in place. These are difficult balances to strike. We do not get them right and perfect every time. There is a discipline imposed by Ministers having to justify each year the continuation of provisions that all of us recognise as important and exceptional and departing from principles that are equally fundamental to how we conduct ourselves as a society.
I feel very strongly that it is not an overwhelming burden to put on Ministers to ask them to have the respect for Parliament and the recognition of the departure from the norm that the measures in this Bill contain once a year, to reassess and bring before Parliament a renewal order that asks whether we have got it as good as we can get it. Therefore, I hope that the House will support the amendment tonight.
Lord Mackay of Clashfern: My Lords, I would like warmly to support this amendment. It is absolutely clear that this procedure is a very special one, outside the ordinary system of courts of law and the like. It is justified on the basis of need by those familiar with the terrorist threat that our nation faces. In the nature of things, that threat must vary, and it must be right that this Parliament should have an opportunity annually to review such special procedures as these. However satisfied we may be-and, obviously, different people will be satisfied to different levels whether the balance is right-it is an altogether exceptional procedure.
The noble Lord, Lord Judd, said earlier that justice must be seen to be done. This is not a procedure in which that is going to happen; in the nature of the procedure, it does not have that characteristic. Therefore, it is highly important that we have a provision that enables us to review each year whether or not this type of procedure is still necessary and efficacious. I agree with everything that the noble Baroness, Lady Hayman, said about this. I found valuable her exposition of how politicians should be consistent, and if they happen to be inconsistent they should have an explanation for it-not just that they have changed sides.
Lord Macdonald of River Glaven: My Lords, I support the amendment for reasons already advanced. For my part, I have no desire at all to see this sort of scheme become a normal and conventional part of our legal arrangements; it is not, for all the reasons that noble Lords have repeatedly advanced this afternoon. It is an exceptional scheme, and it is important that it continues to be seen as such. The amendment lays it bare; it mandates appropriate and continuing scrutiny, engaging the regular attention of this House and providing reassurance that these measures will not continue for a moment longer than they are required or necessary. A strong part of providing that reassurance will be annual scrutiny by this House of the continued necessity for such a scheme as is undoubtedly going to pass into law.
Baroness Kennedy of The Shaws: My Lords, I, too, support the amendment. I am not going to take up the time of the House, because I think that the arguments are simple. It is about the exceptional nature of this shift, which requires us to keep it under scrutiny. I remember having conversations with colleagues when we were discussing control orders, and hearing repeated over and over again in this House how important it was that liberty is maintained and that requires eternal vigilance. That is why when you depart from the norms that are in our system you have to have them under review as often as yearly.
I know that the Minister speaks passionately about liberty-I have heard him do so. I remind him that that vigilance requires that we keep this constantly in front of us, and I think that once a year is not asking too much.
Lord Newton of Braintree: I have three prefatory remarks. First, I apologise to one of my noble friends, to whom I had given the impression that I might simply pack up my tent and go away. Actually, I got so interested that I am still here-and from that she will know that I may not be as totally supportive as she would like.
Secondly, I would just like to say what a joy it is that the noble Baroness, Lady Hayman, is now back in our deliberations rather than presiding over them as Lord Speaker, and to say how good a speech she made alongside that of the noble Lord, Lord Pannick, in supporting the amendment. I will not follow her down the line of discussing obstinacy versus consistency as a virtue, but I am bound to say that one thing that I have observed in government over the years is that when consistency becomes obstinacy, which is what happens on too many occasions with politicians, it is a danger and not an asset.
Thirdly, I would say to my noble and learned friend Lord Mackay, who I was very keen should speak before me, that he has again given me a greater cloak of respectability than I normally have on these occasions. The House will realise from that that I agree entirely with what my noble and learned friend said, and I hope the Government will think again about this, as the case is clear, compelling and strong.
Lord Judd: My Lords, personally, I have the unease that in all that we have done with these special arrangements there is a danger that historically we will have proved inadvertently-maybe-to have given a victory to the extremists and terrorists, because we have abandoned in this area of the administration of justice the principles that we hold dear and believe to be fundamental to our whole system of society and law.
It is absolutely essential that the Executive have to demonstrate all the time why such a risk must be taken and why it is necessary to have these exceptional measures. For that reason, the responsibility is always with the Executive to justify what is being done and therefore to review the process at least once a year is the very least that we can settle for.
Of course, the arguments are extremely beguiling in favour of an annual review. Any provision which threatens the liberty of the subject demands anxious consideration at every level. But there is a difference between what happened in 2005 and what we are confronted with today. I am sure that those who brought in those provisions-those exceptional and extraordinary measures-hoped that they would not be necessary for more than a short period. Unfortunately, that has not proved to be the case. This Bill is the result of a careful and thorough review of counterterrorism and of mature reflection by a number of people that, sadly, powers of this nature need to remain. There have been important modifications to these powers, including the higher threshold for the Secretary of State before deciding that there should be such provisions and the removal of the relocation measures. There has been a degree of sensitivity over how potentially extreme the provisions are, but the legislation has been the result of a mature consideration and has been scrutinised in a thoroughly orthodox way through both Houses of Parliament. It has not been the result of an accelerated procedure.
I respectfully suggest, although entirely appreciating the arguments that such provisions need regular review, this has had a thoroughgoing review. It can be reviewed again after the end of this Parliament, and I respectfully ask the House to consider rejecting the amendment.
Baroness Hamwee: My Lords, the noble and learned Lord, Lord Lloyd of Berwick, expressed a certain weariness when he spoke on this issue in Committee. I do not think that he used the words "ritualistic" or "formulaic" but that may have been what he had in mind when he referred to the way some of the control order debates seemed to be going. I share that concern, but it leads me to say that we should make sure that renewal of this provision is not ritualistic or formulaic. We should take care to avoid that. However, it is not an argument for saying that we should not undertake that renewal.
We will, I am sure, be told by the Minister that we can debate the issue at any time that any of us succeeds in putting down a debate, and that the Government could repeal TPIMs at any time. Neither of those
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Your Lordships' Constitution Committee, as the noble Lord, Lord Pannick, said, also questioned whether it was constitutionally appropriate for the extraordinary executive powers involved in TPIMs to remain in being for a lengthy period of time. Whatever one's views on the need for TPIMs, these are considerable and exceptional measures, and it is surely right and appropriate that Parliament should-as happens currently with control orders-continue to have the opportunity and the duty to decide each year whether the situation remains such that the measures in this Bill and the associated powers should continue in being or instead be allowed to expire.
The fact that debates on the Bill are taking place now does not affect the necessity and appropriateness of proper consideration each year by Parliament of whether the circumstances remain such that these powers, and the way in which they are used and operated, are still needed for a further period of time. It remains to be seen whether the Minister's position has changed on this issue, but if the noble Lord, Lord Pannick, decides in the light of the Minister's reply to test the opinion of the House, we should support his amendment.
Lord Henley: My Lords, perhaps I may say how grateful I am to the noble Lord, Lord Pannick, for setting out his amendment and explaining it so carefully. I am also grateful that he set out the arguments I put forward both in Committee and at Second Reading. I will go through them again because I think that the House would like to hear them, and I might be able to persuade noble Lords of the merits of my position. I will not follow the second speaker in the debate, the noble Baroness, Lady Hayman, in her strictures to her own former Front Bench about consistency. I will leave that as an internal family matter that they can sort out among themselves. Consistency is important on some occasions, but that is a matter for the noble Lords, Lord Hunt and Lord Rosser, to consider in due course.
It is important that I set out the Government's views on why we think it is not necessary to go to an annual review, as opposed to the five-year review that we are proposing. I will set out the argument on three
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Secondly, we believe that annual renewal is unnecessary. The Bill has been subject to full parliamentary scrutiny with the usual timetable allowing for a settled position to be reached. As I stressed earlier, by contrast the control order legislation had to be, necessarily, rushed through with very little opportunity for debate, although there was considerable debate in this House. That made annual renewal an appropriate safeguard for the 2005 Act. Admittedly it was a safeguard that was initially opposed-as the noble Baroness, Lady Hayman, reminded us-by the Government at the time, but it is one that is not necessary in respect of this Bill.
I stress that there are other significant forms of oversight and scrutiny. There will be the annual report by the independent reviewer of terrorism legislation; there will be quarterly reports to Parliament by the Secretary of State-she must report quarterly on the exercise of these powers under the Act-and there will be the usual post-legislative scrutiny which requires a detailed memorandum on the operation of the Act to be submitted to the relevant departmental Select Committee and laid before Parliament. As we discussed when debating many of the earlier amendments and all earlier stages of the Bill, every individual TPIM notice will be carefully scrutinised by the courts.
Thirdly, I stress again-this point was raised by my noble friend Lady Hamwee and others-that there are other means by which the Bill can be amended or repealed. There is an order-making power to repeal the TPIM powers, and if it becomes clear that the powers are no longer needed-we would all welcome that occasion if it should happen-it will be possible at any time during each five-year period for the Home Secretary to repeal the powers by order. If it becomes clear that the powers should be changed, the legislation can be amended by Parliament at any time in the usual way.
We do not, therefore, believe that an annual renewal is necessary. We think a five-year review of these matters strikes the right balance. I appreciate that other noble Lords who have taken part in the debate have strong views on the matter and I understand the concerns of the noble Lord, Lord Pannick. However, I hope-although I doubt very much-that what I have said might persuade him on this occasion to withdraw his amendment.
Lord Mackay of Clashfern: My Lords, first, is it fundamental to the Bill being put before Parliament that the Secretary of State believes, at this moment
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Lord Henley: My Lords, the important point is that the Bill is the result of the counterterrorism review that my right honourable friend the Home Secretary initiated and which she reported on earlier this year. Following the review of counterterrorism legislation we came forward with the Bill and other parts of the package that we discussed at earlier stages. My right honourable friend therefore believes, as do I, that the Bill is fundamentally necessary at the moment. However, she has given herself a power, if she feels that the Bill is no longer necessary, to withdraw it. That power is set out in the Bill; I suppose that it is a Henry VIII power which many people would welcome on this occasion, but we would only withdraw the Bill if we felt that it was no longer necessary.
Lord Henley: What I was saying, if the noble Lord will allow me to continue my argument before he intervenes, is that we do not think that an annual review of this by Parliament is necessary: once during each Parliament should be sufficient. However, as I made clear, other reports from the independent reviewer and from my right honourable friend will come before Parliament to inform debate on these matters.
Lord Hunt of Kings Heath: All I wanted to say to the Minister was that while he referred to a Henry VIII clause, he might also have reminded his noble and learned friend of the other Henry VIII clause, which allows the Home Secretary in certain circumstances to go back to control orders.
Lord Pannick: My Lords, I am disappointed by the Minister's response, although I admire his powers of advocacy in what I regard as a hopeless cause. This is an exceptional Bill. I am sorry that the Minister feels unable to respond to the wisdom and experience of other noble Lords who have spoken in the debate. The noble Baroness, Lady Kennedy of The Shaws, spoke of eternal vigilance. I hope that your Lordships will at least agree that annual vigilance is essential in relation to this Bill. I wish to test the opinion of the House.
(a) the number of police officers to be deployed,
(b) the number of military or territorial forces to be deployed to undertake police duties,
(c) the number of private security contractors to be deployed to undertake police duties,
(d) the level of qualification and training of forces deployed under paragraph (c),
(e) the cost of the total security operation,
(f) national and border security preparations,
in order that the Olympic Delivery Authority may effectively exercise its duties under subsection (1).""
Lord Rosser: My Lords, the amendment seeks to ensure that appropriate measures have been taken on security arrangements. It calls for the Government to report to Parliament on a number of specific issues, which are detailed in the amendment.
We had a debate in Committee about police numbers required at the Olympic and Paralympic Games when the Minister assured us that sufficient police officers will be available, albeit it does appear that this will be done on the basis of quite extensive and quite prolonged overtime working. Since that debate, further issues affecting security have come to light. One concerns what is happening-or perhaps more significantly, what is not happening-at our points of entry. Another
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Since this is a matter on which the Secretary of State for Defence has now surfaced, can the Minister tell us whether any conclusions or decisions have been reached on the use of our Armed Forces-how many, and in what capacity, and what options are still being explored? As there has been talk of the use of ground-to-air missiles, who will make any decision on the availability and use of such missiles?
On security personnel, it is claimed that there has been a significant underestimate of the numbers required. What then is the position? If it is the case that rather more will be needed than originally envisaged, what are the areas of activity or locations where the underestimate was made? Who is advising on the numbers of security personnel needed, and who is making the decisions on how many will be needed, and where and when? How many security personnel will now be needed in total, and what will be the total cost of such personnel? Will that cost be higher than originally estimated, and if so, by how much? Are the security personnel all being provided by one company, or from a range of companies and organisations?
A further issue that has arisen since Committee is what is happening at our points of entry. The Home Secretary said last week that she did not know how many people entered the country who should have been prevented from doing so. As the Government have always claimed that there will be no reduction in front-line services as a result of the cuts, can the Minister give an assurance that there has not been-and will not be-any reduction in the number of front-line UK Border Agency staff involved in security checks, bearing in mind the importance of such checks, particularly in the period running up to and during the Olympic and Paralympic Games?
Can the Minister also give an assurance that the Government now know who is entering the country? We have been told that there are currently times when there are significant delays at our airports-not least Heathrow-and other points of entry. If that is happening currently, what steps do the Government intend to take to ensure that such delays do not happen in the run-up to, and during, the Olympics, without compromising the thoroughness of security checks, which will be more important than ever since the Games will be a tempting target for those bent on committing acts of terrorism? In addition, the Government have said that it is important that people coming from other countries to the Olympics gain a positive impression of our nation. That will not be assisted if there are lengthy delays at points of entry.
There have also been reports that the USA wishes to bring its own security personnel-some of whom would be armed-to protect its own competitors and officials at the Games. Can the Minister say whether that is true and also whether any other countries have indicated such a wish to have their own security personnel?
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Finally, since security at the Games involves the police, the Armed Forces, security companies, and border agency staff, there is a need to ensure that there is proper effective overall co-ordination. In the light of the apparent discovery of an underestimate in the number of security personnel, and the difficulties over handling quickly the numbers coming through our points of entry without compromising security, can the Minister say who, in the run-up to and during the Olympics, is in overall charge with the day-to-day responsibility and accountability for seeing that all aspects of the security operation and all organisations and bodies involved in the different aspects of security are delivering and that their activities are co-ordinated?
The events of the past few days do not inspire confidence that the Government have a proper grip on the situation or that the decisions that need to be taken have been taken or are close to being taken. I hope that the Minister will recognise that when it comes to security, there is a world of difference between knowing what should be happening and knowing what is or is not actually happening. I hope the Minister will be able to provide some firm reassurance on these points when she responds to the amendment. I beg to move.
Lord Patten: My Lords, this amendment is potentially imperfect and deficient in its content. Secondly, it is potentially disturbing and indeed dangerous. I say these things with care and, of course, declaring my interest as a member of the advisory board of the British Olympic Association. For those who know my athletic prowess, this is an unlikely role for me to have, but that is what I do, as a sort of unpaid Parliamentary Private Secretary to the noble Lord, Lord Moynihan, the chairman of the British Olympic Association, who, alas, is unable to be in the Chamber tonight. I have declared that interest. However, the noble Lord, Lord Rosser, mentioned ground-to-air missiles. The last thing I ever expected to have to do in a debate about the Olympics is to declare my interest working with the world's largest defence company, but that I had better do as ground-to-air missiles have come up, and that should be recorded properly in the register.
Needless to say, in making these critical remarks about deficiency and possible danger, I do so full of good will. The Olympic movement is full of hopes that 2012 is going to be a great success, and therefore I say this in a bipartisan way, hoping to improve matters rather than make them worse. I am against this amendment and if it comes to a vote I shall cheerfully vote against it. If you are going to have this kind of reporting back to Parliament three months before the Games, first, the timing is a bit tight, to put it mildly; secondly, the amendment is deficient in missing some of the big things that should be considered.
The first would be the specific need to check and recheck, through the sorts of channels that are not iterated in this amendment, that the built environment of the Olympic Park should be checked again and again for latent objects or devices which could have
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I suspect that is nothing like as big an issue as my other example of where there are yawning gaps in the drafting: the failure to mention cyber matters at all. If anything is going to happen to disturb the Games apart from random acts of terrorism, involving whatever devices or armaments, which may or may not be successful, it is going to be a cyberattack-on the ticketing, on the transport infrastructure, on a whole range of other matters that can be affected by cyberwarfare, and I use that conventional phrase, I hope, advisedly. If I was at his elbow when the noble Lord, Lord Rosser, was drafting the amendment-and I am not his unpaid Parliamentary Private Secretary-I would have suggested that for completeness these things should have been considered. Alas, they are not. I know they are being considered by my right honourable friend the Home Secretary, the Metropolitan Police, the security adviser to the Olympics and everybody else, but I do not think they should be considered belatedly, three months out from 2012, and with the weight and amount of detail that is going to be prescribed here should this amendment be successful.
This is why I used the words "disturbing" and potentially "dangerous", because if we do fear the potential problems that have been referred to, then giving great detail about preparedness is rather like giving great detail about a military deployment during that deployment's beginning and early stages. It is never a good idea to warn those people who are going to cause trouble. The weight of security is obviously going to be very much greater than we thought three or four years ago and that is a very good thing, but I really hope that the noble Lord, Lord Rosser, in this bipartisan spirit that has motivated my speech throughout, of wanting to see 2012 as successful as possible, will, after probing, withdraw his amendment. I know my noble friend the Minister will answer all the points he has raised about ground-to-air missiles and the rest of it-it is somewhat surprising to be debating those things in this Chamber this evening-but it is not very sensible to have this kind of reporting back under the glare of publicity, three months before the Games, informing those people who might try to disturb the Olympic Games exactly what security is there. I think that is entirely wrong. If I was not being bipartisan, I would say it is barking. However, I just say it is misguided.
Lord Addington: My Lords, I am afraid that the last point made by the noble Lord, Lord Patten, is the one that immediately occurred to me. You do not tell somebody how you are going to stop them doing something, or what sort of resources you are going to put in place. I like to think of Report as clarifying rather than probing, so I ask my noble friend to give me one primary assurance: that we will have our initial plans, our reserve plans and then we will have other reserve plans, and that ultimately the resources of the state will be available to secure something as important
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Baroness Garden of Frognal: My Lords, I am grateful to the noble Lord for tabling this amendment and giving us another opportunity to provide reassurances on this topic. The safety and security of the Olympic and Paralympic Games are of paramount importance to the Government-and for all concerned-and it is only right that we give this subject the full attention that it deserves.
This amendment would require the Government to place before the House, three months before the start of the Games, a report detailing the thrust of such consultations that the Olympic Delivery Authority, in exercising its security responsibilities under Section 6 of the 2006 Act, chooses to have with the Metropolitan Police Commissioner and other relevant police authorities.
As covered in Committee, your Lordships will be aware that, as under the previous Administration, the Government have pursued and are continuing to pursue a policy of maximum transparency in communicating what London 2012 safety and security will look and feel like. This includes the overall London 2012 safety and security strategy, which was updated and republished in March this year and which sets out the overall approach to Olympic and Paralympic safety and security. Updates on security preparations and readiness form part of the Government Olympic Executive's reports which are published quarterly; indeed, the next one is due very shortly.
In line with the department's responsibility for co-ordinating all matters of security and the emergency services for the Games, Home Office Ministers have also given supplementary statements when necessary. Notably, this included providing details on future Olympic and Paralympic safety and security funding as part of the annual police funding announcement last December. This set out the Government's intention to deliver the core programme for additional policing and wider Games security in full for £475 million. I can reassure my noble friend Lord Addington that the Prime Minister has signed a guarantee to take all financial planning and operational measures necessary to guarantee the safety and the peaceful celebration of the Games.
We are only a few weeks away from the announcement of police funding for 2012-13 and, without wishing to pre-empt what might be said, I am confident that it too will cover Olympic and Paralympic safety and security funding. Police chiefs and authorities have
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Let me also repeat a point that arose in Committee. Lending police forces will be reimbursed in line with prevailing mutual aid arrangements, which will enable them to backfill though the use of overtime, if they choose, meaning that local policing will not be denuded. I can reassure the noble Lord, Lord Rosser, that this is all within the budgetary plan.
Your Lordships will appreciate that, as with day-to-day matters of security, there is a fine line to tread regarding quite what the Government put into the public domain on Games safety and security. Our goal, as stated in the Home Office strategy, is to deliver,
We remain confident that we are on track to achieve our goal. However, for obvious reasons, there are details that the Government and the police would not want to put into the public domain. Within that constraint, the Government have been as open as possible in making information available about the policing and security operation and that will continue to remain the case.
The amendment refers to security at our border. The noble Lord, Lord Rosser, explained that there were reservations over border security. We are confident that the border will be secure. The Home Secretary has made it quite clear that the pilot scheme which relaxed controls at the border has now been discontinued. Border agencies will be on their guard for the Olympics. The UK Border Agency has robust plans in place to manage the arrival and departure of those whom we expect to visit the UK next summer-both the Games family and regular spectators.
I can reassure the noble Lord that the Home Secretary is in the lead on Games security but the overall goal-a safe and secure Games-is a communal endeavour. The police and LOCOG-as event organiser-have particularly significant roles to play. This includes, for LOCOG, the provision of private security at venues. As some of your Lordships will be very well aware, there has been extensive coverage of this matter, in yesterday's Guardian and elsewhere. As I have indicated, the focus of the Government and everyone involved is to deliver a safe and secure Olympic and Paralympic Games that London, the UK and the world can enjoy.
This remains a police-led operation. The police have substantial experience of securing major events. The police will police the Games and the UK, as they already do, but, separately, we need to ensure robust security of venues delivered by the right people with
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The majority of the guard workforce will be private security guards, supplied by G4S and working for LOCOG, which, as I have said before, retains overall responsibility for delivering the venue security operation. The security guards will be supplemented by military personnel and volunteers where appropriate. All roles will be performed by people who are appropriately trained. The noble Lord made reference to the statement yesterday from the Secretary of State for Defence. The Secretary of State was not actually guaranteeing that there would be ground-to-air defences. What he was saying-quite appropriately-was that all measures necessary to ensure security would be taken. If the advice of the military is that they are required then there will be appropriate ground-to-air defences, but there were many caveats in that statement, and the Government would take the decision on whether or not the Armed Forces would be used and in what roles.
This builds on long-standing work with the Ministry of Defence, which has been fully involved in Games security planning. Military support to the Games will make the best use of the UK's highly skilled resources. I stress that this is not in response to any specific threat. It is part of a sensible approach to planning. We continue to plan against a severe threat level, and so we maximise our flexibility to respond to changes.
I can reassure your Lordships that, as LOCOG works through the mechanics of how private security will be provided, there is no prospect whatever that private security personnel would undertake or in any way assume the duties or responsibilities of police officers, as was suggested in the amendment.
The Olympic Delivery Authority-which, to remind your Lordships, is the focus of this particular amendment-has done an incredible job in delivering a series of truly world-class venues, to time, budget and quality. But, to echo comments that I made in Committee, its race is largely run. This January, the Olympic Delivery Authority will transfer its responsibilities at the Olympic Park, including security, to LOCOG. The torch, as it were, is being passed. It follows that the Olympic Delivery Authority subsequently will not be exercising its responsibilities under Section 6 of the 2006 Act; hence, any such update as may be presented to Parliament under the terms of the amendment at hand would not be particularly enlightening.
The Government remain committed to transparent and bipartisan dialogue on Games security. The public have a right to know what to expect, and we hope that they will be assured by the very significant investment and very significant activity under way to safeguard and secure the Games. We are confident that we will be ready, and we will continue to release such information as is appropriate as soon as it is available.
The noble Lord, Lord Rosser, asked about who was advising on the number of security personnel. That is a matter for LOCOG as event organiser, but of course it is working very closely with the police and security agencies. He also mentioned the story in the Guardian about the misgivings of the United States. We understand from the United States embassy that the US is perfectly supportive, that we have a very strong relationship with the US, and that the US is confident in our plans for a safe and secure Games. Everyone is determined to leave nothing to chance in our aim to deliver a Games that London, the UK and the whole world will enjoy.
My noble friend Lord Patten mentioned void spaces. The police have a proper programme of checking, sealing and certifying void spaces. He also mentioned a range of other possible hazards which are not referred to in this amendment. I think we will probably not go into those this evening.
In respect of the amendment which the noble Lords have tabled, I thank my noble friends Lord Patten and Lord Addington for their contributions, and thank again the noble Lord, Lord Rosser, for bringing this up again at this debate, but I hope that, with the reassurances that I have given, he will feel free to withdraw this amendment.
Lord Rosser: I thank those Members of your Lordships' House who have participated in this debate and thank the Minister for her response. She addressed a great many of the points that I raised. I am not sure that all of them were addressed. I am not quite sure whether an undertaking has been given with regard to dealing with the queues which exist at the present time at our airports. If more staff are not provided, presumably this situation could conceivably get worse in the run-up to, and during, the Olympics, when there will be considerable numbers of people coming into the country.
I would comment only that the issue of security is likely to be raised on occasions before we get to the Olympics if further issues are raised in the press about, for example, what is happening at our points of entry and the problems that we appear to be having there, and if we are faced with statements in our media, which appear to have some validity in the light of what the Minister said, that there has been an underestimate of the number of security personnel who will be needed. We would be failing in our duty in this place-as I am sure they would be in the other place-if we did not raise these concerns and ask Ministers to comment on them and, we hope, give appropriate assurances that everything is under control.
Once again, I thank the Minister for her reply. I appreciate that she responded to a great many of the points that I raised and I am grateful to her for that. In the light of what she said, I beg leave to withdraw the amendment.
"(6) The Secretary of State will work with the London Organising Committee and the Greater London Authority to produce a strategic overview and detailed proposals for encouraging the use of public transport by-
(a) individuals in possession of a valid Olympic Identity and Accreditation Card,
(b) members of the general public, and
(c) non-Olympic visitors and other tourists,
during the period of the Olympic Games and the Paralympic Games.""
Lord Stevenson of Balmacara: My Lords, we discussed the traffic management provisions for the Olympic route network in Committee and had a good debate. Since then, the Minister has written to many noble Lords and we are very grateful to her for that. In raising this issue again on Report, I do not want it to be felt that we are in any sense being critical of the responses that we have so far had to these debates. I reaffirm that we all share a commitment: we do not want competitors missing their events or officials failing to turn up at the right time just because London is gridlocked.
Following the mention of bipartisanship-I am sorry that the noble Lord, Lord Patten, is no longer in his place as I wanted to raise it for him-I want to mention one other matter. It is not directly related to this amendment but I think it would help the House. In our previous series of debates we had a big discussion on ticketing. It was very pleasing that the head of ticketing at LOCOG made contact with me directly and asked whether we would like a briefing on our side of the House. I said that we would but also suggested bringing in the noble Lord, Lord Higgins, who made some points in Committee that I am sure your Lordships will remember. As a result of that, we had a bipartisan meeting with LOCOG at which we bashed the issue of tickets around. I have not yet seen the letter that the Minister promised to write but I think we may have convinced him that one or two of the things that the Government were offering in Committee-they were certainly in the comments made by the noble Lord, Lord Coe-were not really necessary for where they wanted to get to and that there is a better solution to some of the problems that were raised in the House. That is a good example of how we should progress on these matters. I am very grateful to those who were able to facilitate it.
The discussions at Second Reading and in Committee have not stilled the sense of unease that many of us feel about the provisions in the Bill relating to transport. Nor have they stopped people contacting us or writing to us. It certainly is not wise to get a black cab at the moment, with all that is going on around taxi use of the ORN. Media scares are to be expected but-I hope I speak for everybody in your Lordships' House-we would be at fault if we did not try everything in our power to ensure success in every aspect of the Games. As the noble Baroness, Lady Grey-Thompson, said in our previous debate, this may not be the sexiest part of the Games' organisation but you have to get it right if the Games are to be the best yet, as we all hope they will be.
As things stand, the feeling of the House at the end of the previous debate on this issue was that there is a potential PR disaster here. I should like to highlight three of the many concerns that have been raised. First, the laying out and operation of the Olympic lanes-the two central lanes on many parts of the ORN, which at peak may have Olympic vehicles passing down them every six seconds-is bound to have a major impact on the road system in London and cause much change and disruption to normal, day-to-day activity. Secondly, there is a growing sense that there will be two classes of traveller making their way to the Olympic venues: those who glide down the Olympic lanes and those whose journeys are pure hell. Thirdly, there is the need to reduce non-Olympic demand on the Tube-that is, Londoners, non-Games visitors and people going about their everyday lives. We were told that this reduction would be approximately 30 per cent during the Games. That is on top of those reductions that will already have happened as a result of the normal change of the seasons. If people are to get to the venues in reasonable time and London is to keep moving, there must be a three in 10 reduction in usage of the Tube system.
On the first point, we have, until now, concentrated on the ORN because that is the bigger and more concrete-excuse the pun-form of the transport system that will run for the Games. However, we need to focus a little more on the Olympic lanes themselves. Once the lanes start going in, let alone when they are being used during the Games, there will a bit of a hullaballoo, which will slow down and stop other traffic. Taking up two lanes, even on the widest of London's roads, will be a real pain. I just do not see how London will keep going. Maybe the situation is better than we fear but the truth is that we do not know because consultations are still being carried out. Indeed, in response to the questions that were asked in Committee about, for example, whether taxis will be able to use the Olympic lanes, we were told that monthly meetings are still being held.
On the second point, as we discussed last time, our dilemma is that we want to provide good, reliable travel facilities for bona fide Games participants and their necessary support staff. However, this group makes up much less than half of those who must be given access to the ORN lanes. The impact that this will have on ticket-holders struggling to get to the Games will be a problem. We have committed to the ORN and it must go ahead, but what is the communication strategy and when will it kick in?
On the third point, I cannot be alone in finding these figures difficult to comprehend. What on earth will be done to reduce Tube usage by 30 per cent? All we have to go on is the Minister's recent letter, in which she says that there will need to be large reductions at specific stations and on specific lines, and that that scale of reduction has been achieved at previous Games. I assume we are not talking about the 1948 Olympics, so where was this? Where have these reductions been achieved and how did they do it? I think we should be told. Short of locking gates and physically preventing people using the Tube at certain times, I just do not get it.
We covered all the detailed arguments in our earlier sessions on the Bill, so there is no need to go on with these points or to raise other questions, although there are some. I repeat: this amendment does not seek to offer faux guidance on what should be done to resolve these points, which are, I am sure, occupying better and more professionally qualified minds than mine at this very moment. Our amendment stems from the point that was made in Committee. While the Government will get absolutely no credit from a successful Olympic and Paralympic Games-although that is what we all want to see-they will be pilloried if there are the slightest problems over such issues as transport. Our concern on this side of the House is that Parliament, too, may be held in disrepute if we do not point out the concerns that are being reflected to us and call the Government to account.
It is with that in mind that our amendment calls for Parliament to be fully briefed three months before the Games on the measures that LOCOG is taking on transport that it thinks will resolve these and other related issues. We are not arguing that Parliament should take over responsibility for this issue; we are not arguing that there is necessarily anything wrong with the planning at this or that point in time. However, a properly documented analysis of the situation and how LOCOG is dealing with it, drawn together and formally presented to Parliament, would help in the communications battle to get across to people not only what the problem is but what is being done to ameliorate it, and give proof positive that Parliament has been kept fully informed. I beg to move.
Lord Myners: When the Minister responds to this amendment, it would be helpful to know whether the current expectation is that government Ministers will be able to take advantage of the speedy travel to the Olympic centres and back to their homes; or whether they will travel with the rest of us by the same mechanisms that they deem appropriate for the rest of the population. It is a very simple question to which I hope we will get a very straightforward answer.
Baroness Ford: My Lords, as someone who has been very closely involved with the preparation of the Games, I should like to make one or two points that I hope might be helpful to noble Lords in thinking this through. I think that there will be two classes of people travelling to the Olympics. There will be lunatics who want to go by car, and there will be very sensible people who do what I do every other day, which is to take the Tube-the Central line, the District line or the Jubilee line-to Stratford. There is no better way to get to E20 than by public transport. Anyone who imagines that there is a better way of doing it plainly never makes that journey.
I have also made that journey frequently over the past two or three years during August. It is like living on a different planet. The travelling experience at the end of July and the start of August is completely different from the experience at any other time of year. It is partly that cyclical change in travel patterns that has led us to believe that there will be less pressure during the Games period than there would be at
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The planning that has been put in place is by no means sanguine. One has only to think back to the opening of the Millennium Dome to understand how a poor transport set-up can absolutely mar an occasion and completely destroy its reputation. However, bearing all of that in mind, and thinking through all of that planning, I think that the work that has gone in to arranging the travel plans for the Olympics has been well thought through; by no means has it been complacent or sanguine. It is right to urge people to take public transport. Those who use the Central, Jubilee or District lines to Stratford-and we hope that people will use the Javelin trains from St Pancras too-will realise that, out of peak hours, those trains are virtually empty. There is plenty of capacity there. If people plan their routes properly and choose their times sensibly, I think that they will have a good experience going to and from the centre of London to Stratford.
Baroness Grey-Thompson: My Lords, I declare an interest in that I am a board member of Transport for London, and I also sit on several committees of the London Organising Committee of the Olympic and Paralympic Games. I believe in encouraging those who can use public transport at Games times to do so, and I think that they will find it quick, relatively easy and, dare I say it, fun. London will be busy. It will clearly look, feel and work very differently at Games times. The happiness quotient at each of the six Games that I have attended is perhaps hard to explain. However, the Games-time city has a very different feel to it. It is also important to remember that London will be open for business. This amendment is useful, because it is important that we have an opportunity to highlight the positive sides of London's public transport system, and there are many; to continue to encourage a wide range of people to think about public transport as a serious option; and to remind ourselves of what we are trying to achieve.
It is commonly accepted that organising an Olympic and Paralympic Games will be a huge logistical challenge, but there are twin objectives-not only to deliver a great 2012 Games, but to keep London and the UK moving. Many positive things are already happening. The transport infrastructure is complete, in operation and delivering an early legacy well ahead of the Games. There has been detailed planning, modelling and testing, aided by the test events programme, and there is the experience that London has from other large events. Detailed transport information is being made available to businesses, and from early next year there will be a lot more information available to help the public plan right up to and during the Games. For many spectators, the Games are still a long way off; they are not thinking that far ahead about how they are going to plan their Games times. However, when their tickets are in their hands, information will be available about how to travel around. From my own sporting background, I understand the need to minimise disruption at Games times. This will be important in how we are perceived internationally.
I would like to take this opportunity to knock down some of the transport myths that seem to be associated with the Games, because I believe that these exacerbate perceptions and put people off thinking about public transport as a sensible option. It is not true that the Olympic route network is only for the Games family. Any vehicle, including taxis, can use the vast majority of the ORN. In London, it covers just 1 per cent of the road network and only one-third consists of Games lanes. Games lanes are only implemented when there is more than one lane available. The largest element of the Games family is the media, followed by athletes, officials, Games workers, and only then sponsors and IOC members. The vast majority of the Games family- 80 to 90 per cent of them-will use buses and coaches to get around.
The second myth is that there are going to be queues of two to three hours to get into stations and on to trains in London during Games time. Again, this is not true. TfL and Network Rail have undertaken modelling to understand the likely demand at key stations, such as London Bridge, if businesses and people do not change their travel behaviour during Games time. This shows that, at certain times and in certain locations, demand will exceed transport capacity, but queues of the length that have been mentioned in the media are not expected. There is ongoing work with businesses to deliver the change in travel patterns and reductions in demand required. That needs to keep going, especially for the smaller businesses. The big businesses understand that they need to plan ahead. I was at a conference a couple of weeks ago and talking to somebody who owns a restaurant close to the Games. He asked me how many potatoes he needed to order. I said that I had no idea, but you need to be thinking about that right now. It is important that we keep reminding those small businesses that they need to start planning well ahead.
The third myth is that there will be 100 days of traffic disruption in London around Games venues, due to the ORN and road restrictions. Once again, this is not true. The ORN comes into operation just a couple of days before the Games and is taken out as soon as it is no longer required.
Much has already been done to encourage the use of public transport, but as we move into the new year, the public will start to think and plan ahead as the Games become more real. It is the role of LOCOG and the stakeholders to decide how the various groups are moved around London. It is in their interest to make public transport work, because this is how the rest of the world will see us. It is important that we do not forget the tourists who are coming to London who will want absolutely nothing to do with the Games. There will be people who may not even think about the Games being on. As we get closer to the Games, and as the competing nations and chefs de mission visit more frequently, many who hold a valid identity and accreditation card will naturally see public transport as a viable option in many circumstances, although I would not encourage competing athletes to use it. At other times, they will find it an easy way to get round. The stories about the best way to get in and out of the city-to go shopping and to do all the other things that athletes do-will spread quickly among them. I
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Baroness Doocey: My Lords, I declare an interest as a member of the Metropolitan Police Authority and the Home Office Olympic Security Board. Everyone would agree that the Olympic lanes are what I would describe as a necessary evil, because nobody would want athletes not to get to their events on time. I wholeheartedly agree with the noble Baroness that the only sensible way to get to the Games is by Tube; there is no question about that. However, with just 36 weeks to go to the Games, I am concerned that London's emergency services are still unclear about the circumstances in which they will be allowed to use the Olympic route network.
Last week I chaired a meeting of the Metropolitan Police Authority's Olympics committee, where the London Ambulance, the London Fire Brigade and British Transport Police came along to the committee to give evidence. All these emergency services expressed deep concern about the Olympic route network. Although agreement has been reached that will allow them to use the Olympic Games lanes when answering emergency calls, no decision has yet been made about allowing emergency vehicles to use these lanes when not answering emergency calls. This means that when emergency services need to get back to base or to move equipment from A to B, they could be faced with sitting in traffic jams for hours on end. It also means that the rail emergency response vehicles would face similar problems. This could have major repercussions in the event of a serious incident on the rail network.
I find it almost unbelievable that with less than eight months to go, this has not yet been resolved. Can I ask the Minister if she can do everything possible to take whatever steps are necessary to get this sorted as a matter of urgency?
Baroness Garden of Frognal: My Lords, I am grateful to the noble Lord, Lord Stevenson, for tabling this amendment and allowing us to have another lively debate. I am also grateful to him for his comments about the spirit of co-operation and bipartisanship in which this Bill has been conducted. It has been a great pleasure to work with noble Lords in trying to ensure that we all achieve the best results for the Olympic and Paralympic Games.
On the matter of transport, I can assure the House that promotion of public transport is at the heart of our transport strategy for the Games and that detailed plans have already been set out in the Olympic Delivery Authority's Olympic Transport Plan required by Section 10 of the 2006 Act. Indeed, the opening words of the most recent, June 2011, edition of that plan are:
I am grateful to the noble Baronesses, Lady Ford and Lady Grey-Thompson, for their support for public transport, and the use of public transport, in the course of the Games. This might be the moment to reassure the noble Lord, Lord Myners, that Ministers will not use the ORN Games lanes.
Next summer the world will come to London to share in the excitement of the Olympic and Paralympic Games. The Games will draw up to 600,000 ticketed spectators daily to London's transport system. Many more will come to London and other venue cities to join in the wider celebrations. There will be up to 3 million additional trips in London on the busiest day of the Games, in addition to the 24 million trips normally made. It is the scale of the demands that this volume of visitors will place on our transport system, rather than the specific impacts of the operation of the Olympic route network for the Games family, that drives our strategy of promoting travel by public transport, walking or cycling at Games time. The Olympic route network roads will, as I explained in the Committee debate, almost all be fully open for normal traffic and the temporary traffic management measures necessary to make the network work effectively for the Games family will be implemented in a proportionate and targeted manner so as to minimise the impact on normal business. I am grateful to the noble Baroness, Lady Grey-Thompson, for so clearly setting out, and exploding, some of the myths around transport in London at this time.
Our goal is that all spectators travel to the Games by public transport. We have invested £6.5 billion in transport infrastructure since 2005 to boost London's transport capacity to enable spectators and visitors to get to their events and to keep London moving. Londoners are already benefitting from this transport legacy in advance of the Games. The improvements to the public transport system already delivered include a 50 per cent increase in Docklands Light Rail capacity with lines extended to Woolwich and Stratford International; extra capacity on the Jubilee line, with the signalling upgrade now complete and additional trains already operating at peak times, with more early in 2012; the new high-speed rail service between St Pancras, Stratford International, and destinations in Kent; refurbished and extended London Overground services on the East London and North London lines; upgrades to national rail services on the Lea Valley and Great Eastern lines; King's Cross-St Pancras and Stratford regional stations essentially rebuilt and expanded, with step-free access and extra capacity; and step-free access now provided at Southfields, serving the Wimbledon venue, and at Green Park, a vital central transport hub during the Games. I have mentioned those facilities in some detail, given the numerous concerns about the problems of transport in London, to show that an awful lot of work has already taken place to improve transport facilities around the capital.
In addition to these upgrades, additional public transport capacity will be provided specifically at Games time. This includes: later evening services on the London Underground, DLR and national rail services from London, with trains running up to 90 minutes later than normal; a high-frequency Javelin rail shuttle service
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Taxis and private hire vehicles will play an important role at Games time, in particular as a travel option for those with reduced mobility. ODA and its partners are working closely with the industries to assess likely demand, to make them aware of the temporary traffic restrictions that will be in place and to mitigate their impact where possible. They are also working to ensure appropriate provision of pick-up and drop-off points at all of the Games venues as well as key transport interchanges. Information packs are being put together for all taxi and private hire drivers, which will cover the ORN, venues and other details about the Games, ensuring that drivers can operate effectively and make the most of the opportunities that the Games offer. I say to my noble friend Lady Doocey that the packs will be distributed in spring next year. More information will be going out but I hear what she says about the emergency services. We will make further inquiries to ensure that all that is in order and come back to her on that.
The amendment seeks to encourage the use of public transport by those with an Olympic identity and accreditation card. For most of the transport needs of the athletes, officials, media and marketing partners who form the Games family, transport by road along the Olympic route network, mostly in buses and coaches, will, as at previous Games, provide the most convenient and effective means of ensuring that they get reliably to where they need to be each and every time. We listened with great interest to the experience of the noble Baroness, Lady Grey-Thompson, in respect of the transport for the Olympic athletes and the Olympic Games family. We are, of course, encouraging the use of public transport as much as possible. For example, the media will use the Heathrow Express to travel between Heathrow, which is LOCOG's official port of entry, and central London. Transport for London will be providing access to free public transport travel for all members of the Games family.
The Games will, of course, place unprecedented demands on our public transport system, despite the enhancements to capacity I have described in detail and the normal summer seasonal reduction in background demand that can be expected at this time of year, so it will be necessary to reduce non-Olympic demand at key hotspots at times of high Games demand to keep London moving. The latest surveys and forecasting enable those times and places to be identified and the necessary reductions to be specifically targeted. On the basis of the most recent surveys and forecasts, we now know-noble Lords have already indicated this-that we will need to reduce non-Olympic demand by approximately 30 per cent on average across a number
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The noble Lord, Lord Stevenson, asked how we will achieve the public transport reductions and whether we were confident that the necessary reductions will be achieved. There is a rolling programme of tracking research used to estimate the level of reduction that may be achieved in 2012. This gathers information on public awareness, propensity to plan and intention to take action to change travel behaviour during the Games period. A whole host of research goes into trying to ensure that we have the best ideas of where the transport hotspots will be and how we can cope with the additional traffic. TfL has been working with businesses since November last year to encourage them to plan to reduce journeys where possible, and reroute, re-time or change the mode of essential journeys. TfL is already working directly with businesses responsible for more than half a million employees in transport hotspots. This will be supplemented next year by extensive public communications to commuters and the wider public.
Finally, the amendment also calls for proposals to promote public transport use by non-Olympic visitors and tourists. I am aware that behind this may be concerns in some quarters that the Olympic and Paralympic Games will deter non-Games tourists from visiting the UK. This has been indicated in tonight's debate. The Government are committed to ensuring that the tourism industry maximises the economic benefits provided by the Games. Including new money that has recently been announced from the GREAT campaign, plus private sector support, VisitBritain will invest around £127 million in a new international marketing programme. Over the next four years it is expected to deliver 4.6 million extra visitors from overseas and £2.27 billion in extra visitor spend. We have also recently announced the 20.12 per cent discount initiative which will be launched next year by VisitEngland as part of a campaign to use the Games to boost domestic tourism.
Visit England's campaign is supported by a £3 million investment from the Olympic budget and is expected to deliver 12,000 new jobs and £480 million in extra spend over three years. At this point, I congratulate the noble Baroness, Lady Ford, and her team on their success in achieving the World Athletics in 2017. If we get all the transport right for the Olympics, then 2017 will be a piece of cake.
I hope that has addressed the points that noble Lords have made in this debate. We hope that the non-Olympic visitors and tourists will of course be able to benefit from the significant enhancements to public transport provisions, and that the Olympic lanes will work as efficiently as intended to get the athletes and the Olympic family to and fro. The noble Lord, Lord Stevenson, asked where the previous reductions have been achieved, and we have looked to previous host cities on the reductions and on travel to
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I have something here for the noble Baroness, Lady Doocey, on the emergency services. The Games consultation and engagement team is working with the emergency services to ensure that vehicles attending emergencies can move around the city safely and easily. There will be ongoing discussion about the other vehicles she mentioned, the ones that are not actively engaged on emergency services. That is all being debated and consulted on.
I hope that I have been able to demonstrate that we are well under way in delivering a comprehensive and detailed strategy to promote public transport for the Games while also effectively managing the pressures that will be placed on specific parts of that system. On that basis I hope that the noble Lord, Lord Stevenson, will feel able to withdraw his amendment.
Lord Stevenson of Balmacara: Perhaps I may ask the noble Baroness to go back a little in her speech. I heard her say something about one-day travelcards being available to Games ticket holders. Can she confirm that?
I thank all who have spoken in this debate, particularly my noble friend Lady Ford and the noble Baronesses, Lady Grey-Thompson and Lady Doocey, who shared their expertise in these matters. I am left with three quotes and a conclusion which I would like to cover before we resolve how to take this forward. When the noble Baroness, Lady Grey-Thompson, was talking about modelling, she said that on certain occasions demand is going to exceed supply. That is picked up by the sense of the word hotspot which I assume covers much of the same issue. There is obviously going to be a problem at some point during the Games and we recognise that.
The noble Baroness, Lady Doocey, was worried that emergency service vehicles would be sitting in traffic jams for hours on end, and I hope that she found the Minister's response helpful. If there are traffic jams, they will not be the only people sitting in them; it is also going to be Londoners and others who wish to go about their ordinary business, including visitors and businesses that may have time-sensitive deliveries to make-for instance newspapers. There is obviously a second concern in that.
The third concern-the one we are all beginning to push at-is that we are making it clear that these will be the world's first public transport Games, while at the same time recognising that even our enhanced public transport system will not really be able to cope. We have a problem.
Our amendment was an attempt to try to take a little of the potential blame away and bring it back to Parliament. However, I think that it has not found much favour and therefore will not push it further at this stage.
Lord Myners: Before my noble friend finishes, can we ask the Minister to say a little more about the one-day travelcards as I think it may well be the first time that this has been announced? Am I correct in understanding that, as my noble friend says, these are for London travel but that they will cover travel for the journey to and back from the Games, that they will apply to wherever the traveller travels from, and that they will be free? If they are not free, then they are just a return ticket, and not a travelcard at all, so can the Minister confirm what exactly these travelcards cover and will they apply to people going to Weymouth to see the sailing, or to Greenwich to see the equestrian events? Can the Minister be more precise please?
Baroness Garden of Frognal: All spectators will receive a free all-zones travelcard for the day of their Games event ticket, so that will cover the London venues. A dedicated Games journey planner on the London 2012 website will enable ticket holders to plan and book their journeys well in advance of the Games. We are hoping that the all-zones travelcard will be an additional encouragement to the spectators to use public transport.
Lord Stevenson of Balmacara: I am grateful for that useful clarification. Let us paint the scenario. The Ministers are trapped in their cars, not in the Olympic lanes, but possibly hovering close to the Olympic network.
Lord Stevenson of Balmacara: Or they are in the Tube-I will come to that. Everybody who has deliveries to make in London has to make them at unsocial hours with difficult transport arrangements but they have to take notice of that; if they are not worrying about the number of potatoes they have got to buy, they will certainly be worrying about this. They will, we hope, get it right and we will be working on that.
All the extra visitors will be confused and bemused as they often are in London, so no change there, but those who have tickets for the venues will be trying to use a Tube system running at overcapacity. Despite the improvements already mentioned there is very little time-eight months now-until we get into the critical phase.
It does seem a bit of a mess. I do not think there is anything one can do about it, and we must all pull together to try to make sure the best comes out of it. I wish those who are responsible for it all the very best. With that, I withdraw this amendment.
Lord Harrison: My Lords, I bring to the House's attention Sovereign Credit Ratings: Shooting the Messenger?, a report of the European Union's Sub-Committee on Economic and Financial Affairs, and International Trade, which I have the honour to chair.
As noble Lords will be aware, credit rating agencies have had a very high profile since the banking crisis erupted in 2008, in relation to which there has been widespread and, in the committee's view, deserved criticism of their role. When the banking crisis hit, the rating agencies were revealed to have woefully underestimated the risk that complex financial products, such as mortgage-backed securities, posed. Thus we were told in the evidence that some securities that carried an AAA rating one day were downgraded to a CCC the next. Indeed, many commentators accused the rating agencies of contributing to the severity of the crisis.
In the crisis aftermath, many sovereigns, as well as the European Union, sought to sharpen regulation of the credit rating industry. In the European Union this led to the creation of the European Securities and Markets Authority, or ESMA. With the reputation of the credit rating agencies yet to recover, many people were quick to blame them for exacerbating the European Union sovereign debt crisis after it intensified in 2009. They were accused of failing to predict the crisis, and then of precipitating it by downgrading the ratings of euro area sovereigns too far and too fast. In the midst of this, the Commission in November 2010 launched a public consultation to discuss the need for further regulation in the credit rating industry and invited views on proposals to foster a European credit rating foundation which might challenge the oligopoly of the major rating agencies.
In April 2011, and in the light of these developments, our committee launched this inquiry, seeking to analyse the interaction between the credit rating agencies and sovereign debt, with a particular focus on the role of the CRAs in the euro area crisis. We took evidence during May and June from representatives of the "big three" rating agencies-Fitch Ratings, Moody's and Standard & Poor's; from representatives of the OECD and the International Centre for Financial Regulation; from Dr Wolf Klinz, the European Parliament rapporteur; and from the Financial Secretary to the Treasury, Mark Hoban. We also received a welter of additional useful written evidence, for which we are grateful. Our report was published in July and we are pleased that the Government's response now brings this debate to the Chamber tonight.
The committee concluded that the rating agencies could not be accused of precipitating the euro area crisis. Their downgrades, in reality, reflect the seriousness of the problems that some member states currently face. Indeed, in most cases the CRAs followed, rather than led, market sentiment. We acknowledged that downgrades can, in certain circumstances, exercise a disproportionate influence on markets, exacerbating existing fragile situations. However, whether this happened in relation to the euro area crisis is more difficult to determine. Yet the committee did conclude that the credit rating agencies conspicuously failed to challenge the assumptions on which their assessment of the sustainability of sovereign debt was based in the years
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The committee has two central concerns apart from the ones that I have expressed. The first relates to the extent, or otherwise, of competition in the industry. We concluded that the credit rating agency industry is, at present, an oligopoly. The stranglehold of the largely United States-based big three has proved impossible to break. This is not for want of trying on the part of some. As I have already mentioned, the Commission has floated the possibility of the establishment of a European credit rating agency, whose start-up costs could be,
The European Parliament Committee on Economic and Monetary Affairs raised the possibility of an independent, non-publicly funded European credit rating foundation. We concluded that there was a compelling argument for a thorough competition inquiry into the structure and regulation of the credit rating industry, but we also felt that the European Union should not fund, either initially or in the long term, a credit rating agency. An EU-sponsored credit rating agency would simply lack credibility with the markets.
Our second concern relates to the use of credit ratings. Sovereign ratings can play a useful role that contributes to the smooth, efficient working of the worldwide sovereign debt market. However, there is a compelling need to reduce the mechanistic role that credit ratings play in regulations, investment mandates and private contracts. This hardwiring of ratings leads to knee-jerk rating changes which can cause deleterious cliff-edge effects, herd behaviour among investors and systemic disruption. Indeed, there is an overwhelming imperative for investors to see sovereign ratings for what they ultimately are: subjective provisions that rely heavily on the personal judgments of rating agency staff. Investors should not follow ratings blindly but should view them as opinions that need to be balanced and confirmed by other market indicators. Responsibility for investment decisions ultimately lies with investors, and they should bear in mind the principle of "caveat emptor"-buyer beware-when deciding how much reliance to place on the judgment of rating agencies.
Where, then, do we stand today? We have received the Government's response to our report and I am heartened that they agree with so many of the committee's recommendations. I am sure that the Minister will want to elaborate on the Government's position.
The question now turns to the Commission. Given that ESMA has only recently taken over the direct regulation of credit rating agencies, we argued in the committee that the new system should be given time to bed down and its effectiveness should be assessed before further changes are made. Yet Commissioner Barnier has pressed the case for further regulation of rating agencies for some time now and today-as if to prove the timeliness of this evening's debate and the fact that he has obviously read our report-he launched
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There is also the question that ESMA might be communicated with by the credit rating agencies. That flies in the face of what we said on the committee-that 12 hours is a sufficient break and we do not require the three-day break that might confuse the markets even more because something might be said out of turn. We need more diversity and stricter independence of the credit rating agencies and, again, I ask the Minister to respond to the question of competition.
This is an important issue. Recently the credit rating of France was reduced from AAA, with deleterious effects on the markets. We need to be serious about this. I hope that we can have a good debate and that the Minister will be able to respond to the Commission's proposals.
Baroness Noakes: My Lords, I had not originally intended to take part in today's debate. I had seen the report of the EU sub-committee chaired by the noble Lord, Lord Harrison, and agreed with its balanced view and recommendations. I also agreed with the Government's response to that report. Then I noticed, as the noble Lord, Lord Harrison, has already pointed out, that the noble Lord has cleverly timed this debate to coincide with the expected announcement of the EU Commission's latest regulatory onslaught on credit rating agencies. So here I am.
I start from the position that we have to push back at the relentless tide of regulation from Europe and that any more regulation has to have the highest level of justification. I also believe we should make a start on returning powers to the UK, but stopping further regulation from Europe is not a bad place to start.
Looked at dispassionately, it is not clear that the rating agencies deserve the degree of punishment that has been meted out to them in the wake of the global financial crisis. Both Europe and the G20 needed scapegoats to cover up the fact that neither Governments nor their regulatory and prudential agencies had the faintest idea of the financial mayhem that was stalking the world in 2007. So the credit rating agencies, which certainly did not cover themselves in glory in relation to structured financial products in that period, ended up subject to a range of regulatory interventions and technical standards.
As is well known, the European Commission has never intended to let the financial crisis go to waste. The noble Lord, Lord Harrison, and I attended a breakfast briefing last week where a senior member of the Commission's staff positively bragged that the crisis had led to 29 pieces of legislation affecting the financial services sector. His justification for this onslaught
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As the noble Lord, Lord Harrison, has noted, the Commission now wants to ratchet up the regulatory pressure on the rating agencies even further. This appears to be retaliation for their alleged failings in relation to the stressed eurozone economies. There is no doubt that Ireland, Portugal, Greece, Spain and Italy have not enjoyed having their credit ratings reduced-the reductions were late and sudden-but those countries had to face up to the fact that their credit ratings had been overstated for too long.
I completely agree with the report of the sub-committee chaired by the noble Lord, Lord Harrison, that the credit rating agencies did not precipitate or exacerbate the euro area crisis. I also agree that they did a rather bad job of not identifying the real risks in those economies. However, this is not a sufficient excuse for additional regulation.
It took me rather a long time today to confirm whether Commissioner Barnier did in fact launch his latest round of regulatory assault on the credit rating agencies. In fact, one blog this afternoon reported that Commissioner Barnier himself had been downgraded from "punctual" to "tardy" because he was late for the relevant press conference. However, a couple of hours ago I managed to track down a one-page summary of the proposals.
As the noble Lord, Lord Harrison, has noted, one of the things being mooted as part of the proposals is one which would allow credit rating agencies to be silenced if a country was in some kind of crisis intervention. That idea should have been killed at birth and never taken into the heart of EU policy-making. Constraining the credit rating agencies from placing their sovereign debt evaluations in the market is contrary to free speech. It is also impractical because the rating agencies would presumably have to declare that they were unable to issue a rating, which could well trigger a panicked response in the sovereign debt markets. The creation of an information void-or, at least, one with only government-controlled information-is likely to have the worst possible effect on credit markets. Fortunately, the Commission has stepped back from the brink on this and the matter is now marked, in the summary that I saw, as "for further consideration". I hope that that means that the proposal is gone for good, but we have yet to see.
A dodgy proposal that has survived is that of compulsory rotation of rating agencies every three years or every 10 issues. I share the view of the committee and the Government that greater competition in the rating agency market would be a good thing, but there are problems with the rotation proposals. First, as most issuers already use more than one agency, the impact of the rotation proposal is huge turbulence in what is a very small market. It might well give the smaller agencies an opportunity to improve their position, but does that end actually justify the means? Creating further competition through turbulence has no respectable precedent.
Secondly, there are likely to be real impacts. Certainly, issuers will be faced with varying increased internal costs in dealing with additional rating agencies, possibly annually if they do a lot of issues. More importantly, it is far from clear that the markets which look to credit agencies will accept any new players at face value. Disruption in corporate credit markets, and through that disruption in the real economy, may be the only certain result of these proposals. It is not surprising that the Association of Corporate Treasurers is deeply concerned about these proposals and it wrote to the Commission in clear terms recently. It was disappointing and unsurprising in equal measure that Commissioner Barnier's spokesman dismissed the association's views as "a typical lobbying move" that "smacks of desperation".
A further bad idea is the proposal to create a European framework for civil liability. The sub-committee chaired by the noble Lord, Lord Harrison, had it right when it said that civil liability is best left to member states. It is clear that S&P's foolish error last week on the rating of France has touched a raw nerve, and has strengthened the resolve of those at the heart of the European project to control and punish credit rating agencies. But anybody who has looked at France's economic position might marvel that it has hitherto escaped the analytical stringency applied to others in the eurozone. Credit spreads are now telling their own story on France. The mistake was unfortunate, but do we want a credit rating sector terrified of making a mistake, or one which is not prepared to boldly challenge received wisdom? What the markets want and what, for example, France might want, may not coincide. I have not had time to look in detail at the Commission's proposals in this area, but I hope that they do not live up to the rhetoric of punishing mistakes that was being bandied about last week.
The only good aspect of the latest proposals is that the Commission has dropped the barmy idea of establishing the European credit rating foundation, which the noble Lord, Lord Harrison, has referred to. I understand from the press that there is now a suggestion in Brussels that another non-credit rating agency approach might be adopted, possibly using, for example, the European Court of Auditors. Will the Minister say whether the Government will give any support to an EU move to take credit rating agencies out of sovereign debt ratings? More generally, will my noble friend say whether these new proposals from the Commission will be subject to the UK's veto, or can they be bulldozed through by qualified majority voting?
The Government's official response to the committee's report agreed with the committee that further changes should take effect only once the existing raft of changes had had time to bed in. Will my noble friend confirm that the Government will stick to that position?
Lord Myners: My Lords, I congratulate my noble friend Lord Harrison and his committee on the excellent work that they have done on this issue. They have produced a flawlessly argued case which, on the whole, the Government have very sensibly accepted in their written response. I share with the noble
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I am delighted to see the Minister here as I was a little worried that the noble Lord may himself have been downgraded. The appointment of the noble Lord, Lord Green of Hurstpierpoint, as a member of the Treasury team was relayed to us in a press release issued very quietly by the Treasury and was not given a lot of publicity. He is to give advice to the Chancellor on issues relating to banking, which seems to me to be the job that the noble Lord, Lord Sassoon, was doing. I am delighted to see that the noble Lord, Lord Sassoon, is here and that he has not been downgraded, which would have been a great disappointment to me and to other Members of the House. It would be interesting to know why his advice on banking is not sufficient for the Chancellor, and why the Chancellor now needs the noble Lord, Lord Green, to be a member of the Treasury team.
As the noble Baroness, Lady Noakes, said, credit rating agencies have, to some extent, been used as scapegoats by those who should have taken responsibility for policy errors but instead sought to deflect the blame on to others. The credit rating agencies clearly played a lamentable role in the rating of SIVs, CDOs and other packaged products. They engaged in misdirected behaviour, employed flawed processes and had a business model based on suspect economics: the issuer pays protocol. Some would say, in respect of sovereign debt, that the case is not proven as to whether the rating agencies also had a role in triggering some element of the sovereign crisis. I am more inclined to give the rating agencies the benefit of the doubt and to say that they did not play any significant part in causing the sovereign crisis.
Here I disagree with paragraph 22 of the committee's report, which says that credit rating agencies play a role in determining the cost to governments of borrowing. They simply do not. The realistic situation of the borrowing nation's capacity to pay determines the price it pays for credit. The thermometer does not trigger the fever. The credit rating agencies measure the likelihood of repayment. They certainly do not have any impact on the cost of credit. Again, at the risk of giving even more credit to the noble Baroness, Lady Noakes, she was absolutely right in pointing to the case of France, where the credit rating agencies may say one thing about the rating of that country but the pricing of its debt in the markets says something rather different in terms of differentiation between France and Germany, the quality of covenant and the capacity to honour debt obligations.
The reality is that credit rating agencies are a lagging indicator rather than a leading one. They tend to verify the market's judgment rather than to lead it. We should not be terribly surprised by that. My experience is that, on the whole, credit rating agencies employ rather average people. They are given extraordinary status by Mr Peston and others on television when they talk about changes in rating, but quite frankly, if you are good at the job, you work in an investment bank, a bank or a hedge fund; you do not work for Fitch, Standard & Poor's or Moody's. On the whole,
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We need to understand the way in which the credit rating agencies are hardwired at the moment into regulatory architecture and find a way to eliminate the central role that they play. In that respect, we should strongly support international efforts to reduce the role of credit rating agencies in helping to determine risk-weighted assets and other important calculations that feed into Basel and other capital requirements. Unfortunately, the role of the credit rating agencies is rather helped in this respect by their standing in America, under the SEC regulations, as nationally recognised agencies or quasi-regulatory authorities. This is a deep lacuna. I urge the Financial Policy Committee of the Bank of England to look at the role of credit rating agencies and see whether we can find a way of taking them out of the central role that they currently play.
The implementation of the credit rating agency directive will be in the hands of the European Securities and Markets Authority-ESMA. This has only recently been established but is an important agency because it will exercise direct regulatory authority. I hope the Minister will correct me if I am wrong here, but I believe that ESMA has the power to overrule national regulatory agencies. In other words, the FSA is subordinate to ESMA and could not, if it wished to, introduce higher standards. ESMA has been clear that it intends to ensure that its rules are enforced uniformly across the EU and in so doing will limit the ability of individual countries to require additional measures. Mr Steven Maijoor, the chair of ESMA, was quoted in the Financial Times recently as saying that,
The regulations will not be based on the UK's "comply or explain". They will be enforced on all national regulatory agencies by ESMA. I would welcome an assurance from the Minister that he will stand up for self-determination of regulation in the UK and not allow us to be steamrollered by ESMA or any other part of the European regulatory architecture.
We saw some very flawed thinking from the European Commission on credit rating agencies-that there should be a government-sponsored CRA, the banning of the publication of ratings, and the pre-approval of methodology, which implies again some process by which these become nationally recognised outcomes rather than the opinions of rather average people. I worry very much about Mr Barnier. I met Mr Barnier when he was a Minister. He came to see us at the Treasury. He came down the corridor and I was watching him. I am a great fan of art and I was rather impressed that he stopped to look at every painting. I thought this is a man with whom I share a common interest-until I realised he was actually looking at his reflection in the glass on every painting, and adjusting his hair or
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The Financial Secretary to the Treasury-it is not the noble Lord, Lord Sassoon, but Mr Hoban-said in his letter to the noble Lord, Lord Roper, on 28 September that he would be reporting back to us on the work of the Financial Stability Board on rating agencies,
He actually wrote the letter on 28 September, but I am accustomed to how timing and seasons change when Ministers come to author letters. I would be interested to know whether this reply has been produced and whether the Minister can tell us what the FSB has decided on credit rating agencies.
Finally, as my time expires, I regard the CRAs as just another of those innocent fools and victims who played a part in the financial crisis. Your Lordships have already had an excellent committee report on the auditors. We have now had a report on the credit rating agencies. I think attention should now be turned to the benefit consultants and, finally, to those rascals who decide whether a credit event has been caused in the credit default swaps. Plenty for the Minister to do even though he is now job-sharing with the noble Lord, Lord Green of Hurstpierpoint.
Lord Vallance of Tummel: My Lords, I first congratulate the noble Lord, Lord Harrison, on his admirable chairmanship of our committee during the production of the report. My first brush with the credit rating agencies was when the Select Committee on Economic Affairs produced its report, Banking Supervision and Regulation, in June 2009. We were highly critical of the part the agencies played in the run-up to the preceding year's financial crisis, of their failure to detect the toxicity of many of the financial instruments they rated, of their potential conflicts of interest and-this was not to be laid at their door-of the systemic risk of hard-wiring ratings into financial regulations and the mandates of institutional investors, which the noble Lord, Lord Myners, referred to. Therefore, it comes as something of a surprise to find myself defending the agencies, at least in part, as they sit in the firing line from the Commissioner for the Internal Market.
It also comes as something of a surprise, although a pleasant one, to agree with almost all of the Government's response to the report on sovereign debt ratings. I will not rehearse again the arguments about the distinction between the rating of corporate and sovereign debt that is set out in our report. Suffice it to say that sovereign debt ratings are almost always unsolicited, so the issues of conflict of interest that surround the issuer-pays model and of ratings shopping simply do not apply.
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