Lords Sitting of 13 December 1982

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.

National Health Service: Resources
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what reductions they are contemplating in the staff and equipment of the National Health Service and in what areas.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, over the period since 1979 neither the NHS as a whole nor any region within it has suffered any decrease in resources, and none is now contemplated. On the contrary, the overall increase in services over the same period has been 5½ per cent. or more, and further growth is planned for 1983–84.
Lord Molloy: My Lords, I am very grateful to the noble Lord the Minister for that reply, which seems encouraging except when it is put against the facts. Does he realise that every time we get a statement of that kind from the Government, some great hospital, for example, Great Ormond Street and Tadworth Hospitals, are put under threat? At this very moment there are hospitals in Glasgow, and in particular the leukaemia wards, under threat of closure. There is the leukaemia ward in the East Birmingham hospital which is now under threat of closure simply because they cannot find staff. Would the noble Lord be prepared to look at the examples that I give, and perhaps inform me that the fears I have expressed on behalf of those hospitals will not be realised—or will they perhaps be realised?
Lord Trefgarne: My Lords, I will certainly look into the specific examples the noble Lord has referred to and let him know the position in regard to them. The question of Great Ormond Street has, of course, been discussed in your Lordships' House on more than one occasion and I do not think I need to repeat what has been said about that.
There are two real answers to what the noble Lord is asking: first, on the question of priorities, we do need to establish the right order of priorities, because there is a finite sum of money available for the health service, not an unlimited sum of money, as some people seem to think. The other thing is that we do necessarily have to decide the priorities to keep the system going smoothly. I hope the noble Lord would not want us to depart from that.
Baroness Jeger: My Lords, can the noble Lord say whether the figures he gave relate only to the hospital
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service, or are they totals for the whole of the NHS, including the family doctor service and ophthalmic and dental services for which the charges to the public have gone up?
Lord Trefgarne: My Lords, the figures I gave related to the Question on the Order Paper, which was about the National Health Service as a whole. The financial considerations so far as the family practitioners are concerned are, of course, different.
Baroness Masham of Ilton: My Lords, may I ask the noble Lord if he is aware that I was at a reception last week at the London Hospital and an occupational therapist told me that that district was thinking of not supplying the Roho cushion to paralysed people? If the noble Lord is not aware of what a Roho cushion is, it is a special cushion filled with air which can stop people from getting pressure sores, thus keeping them out of hospital and saving money. Would the noble Lord please look into this and let me know?
Lord Trefgarne: My Lords, I will certainly look into the specific case which the noble Baroness has drawn to my attention. I suspect that the same arguments will apply in that case as in the cases that the noble Lord, Lord Molloy, put to me—namely, the question of priorities.
Lord Hooson: My Lords, is the noble Lord aware that over a quarter of the annual cost of the National Health Service seems to be administrative costs? If there is to be a cutting down or slimming of services, could it be confined to the administration, rather than to the medical and associated services?
Lord Trefgarne: My Lords, I certainly agree that that is an area that needs to be very carefully looked at. It is not always the case, however, that administrative expenditure is misspent. For example, I heard of a case recently where it paid to provide a further private secretary for a particular consultant because it freed the consultant to get on with his proper work.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware of the profound concern which exists in this House, as expressed by the noble Baroness and by my noble friend, about individual cases and units, and indeed about hospitals like Tadworth? Is he able now to tell the House, in view of the encouraging statement he has made, that reconsideration will be given to the closure of these units and this hospital? His answer to that would be heard very carefully by all of us and by the country.
Lord Trefgarne: My Lords, there are two points, as I was saying to the noble Lord, Lord Molloy, which we need to take into account when considering specific cases like Tadworth. They are, first of all, the priorities, but, secondly, we must ensure that we get the very best value for money from the funds that we can make available. In the case of Tadworth—and the noble Lord will know that my honourable friend is considering that matter specifically and we have made additional funds available in the short term—that hospital at the moment is less than half used, and I do not think that that is the best use of the resources available.
Lord Hale: My Lords, would the noble Lord bear in mind that in the case, for example, of Kings College Hospital, where I have had the good fortune to have had almost continuous care for 12 months, the question of administrative costs is very largely a question of definition? They have a very remarkable system there under which the patient can spend much more time at home, with less cost to the hospital, by utilising administrative services and giving the patient special examinations from time to time at the hospital in the various departments, and supplying special treatment at those interviews.
Lord Trefgarne: My Lords, the noble Lord is right to point to certain changes in some of the procedures within the National Health Service in recent years—for example, the greater use of day surgery and the greater use of short stay facilities, which frees beds to be used by other patients. But one does have to remember that such arrangements do sometimes throw a greater burden on the local social services.
Baroness Robson of Kiddington: My Lords, does the noble Lord agree that it is generally accepted that the National Health Service needs an increase of between 1 per cent. and 1½ per cent. per annum for demographic changes which, against 5½ per cent., in my view does not leave anything for growth? Will the Minister please ask the Secretary of State not to talk about growth.
Lord Trefgarne: My Lords, with respect I do not think that the Secretary of State needs any lessons from me on how to address himself to these matters. We have more than covered the growth in resources required by the demographic changes to which the noble Baroness refers—for example, there has been the increase for the elderly, of which, I have no doubt, the noble Baroness is very much aware. This is a matter of which we, too, are aware, and the increase in resources that we have made available has more than covered that particular point.
Lord Molloy: My Lords, is the noble Lord aware that, in addition to the very valid point made by the noble Baroness, there is apprehension running through all grades of staff throughout the National Health Service? As I have said, they hear that there are to be improvements and that the NHS is safe in the hands of this Government, but within a few weeks of such statements there are threatened closures which stretch from Surrey, through London, Birmingham and Glasgow. Will the Minister please give some assurances on matters which are perturbing staff and patients about what appear to be promises made on the one hand and the reverse being applied when the promises have faded away?
Lord Trefgarne: My Lords, I am not going to give an assurance that money misspent in the health service will continue to be misspent or that half-empty hospitals will continue to remain so when there are other facilities nearby that could equally be used.

Schools: Subversive Literature
2.45 p.m.
Viscount Massereene and Ferrard: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the existing measures necessary to prevent the spread of subversive literature throughout our schools, especially when it is aimed at undermining the authority of school teachers.
The Earl of Swinton: My Lords, the Government would deplore any attempt to undermine the authority of teachers, and we look to schools and local education authorities to take action to deal with any such attempt. We have at present no plans to introduce additional powers in this field, but if my noble friend has specific proposals in mind we should be glad to consider them.
Viscount Massereene and Ferrard: My Lords, while thanking my noble friend for that Answer, may I ask whether he is aware—I am sure he is—that the media are increasingly reporting the physical violence and obscene abuse that is being inflicted on teachers? Does he further agree that some of this is stirred up among pupils by various items of literature that fall into their hands? Further, is he aware that I have heard reports that literature is being distributed in the Midlands telling pupils to harass their teachers, the excuse being given that education imprisons the mind?
The Earl of Swinton: My Lords, I am not surprised that when violence takes place in schools that is the sort of thing the media cotton on to, because there is not an awful lot of newsworthy material in a school that is working peacefully, with the pupils sitting happily doing their lessons and where all is well. I do not mean to be flippant because, of course, we are concerned about any school where violence occurs, especially towards teachers. I do not think there is a particular amount of violence at the moment. Each case must be looked at on its merits and it is up to the local education authority to deal with it.
Baroness Gaitskell: My Lords, is not this Question a figment of the noble Viscount's imagination? Many of us have children and grandchildren and we have never heard of any such thing happening among teachers. Is it not wrong to frighten people in this way?
The Earl of Swinton: My Lords, I am not here to defend my noble friend's Question but I am afraid, unfortunately, that it is not a figment of his imagination. If the noble Baroness cares to go to the Library I am sure she will find reports of violence in schools unfortunately occurring from time to time.
Lord Avebury: My Lords, has the noble Earl's attention been drawn to two publications that are highly respectful not only to teachers but also to senior officers of the armed forces and even to Members of your Lordships' House? I refer to the Beano and the Dandy.
Viscount Massereene and Ferrarad: My Lords, is my noble friend aware that on 22nd November it was reported in the press that a group of teachers in Leeds had said that in a single year there were 73 violent physical attacks on them?
Baroness Masham of Ilton: My Lords, may I ask my noble kinsman if he agrees that it is not very helpful to the authority of schools when the teachers go on strike, and that that is a bad example to the children?
The Earl of Swinton: My Lords, that question was not a plant. I agree, as I do occasionally, with my noble kinswoman.
Baroness David: My Lords, does the Minister agree that we do not want censorship and that, if anyone is anxious about what is coming in, it is up to the head and the governors to decide what is suitable or not?
The Earl of Swinton: My Lords, I think that is very much the case. I am grateful to the noble Baroness for pointing that out.
Lord Leatherland: My Lords, can the Minister give us some examples of what is called subversive literature that is distributed in schools, so that we may avoid it?
The Earl of Swinton: My Lords, I do not think it is up to me to produce the literature. That is for the noble Viscount who asked the Question.

London Dockyards: Lysander Development Scheme
2.50 p.m.
Lord Nugent of Guildford: My Lords, I beg to leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many new jobs were estimated to be created by the Lysander development scheme in London Docklands, and what steps they propose to take to ensure that this prospect is not frustrated by local political opposition.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bell win): My Lords, I understand that about 6,800 jobs would be produced. The Government, in consultation with the London Docklands Development Corporation, are considering urgently what action might be taken following the recent decision of the GLC not to proceed with the release of the site.
Lord Nugent of Guildford: My Lords, I thank my noble friend for that partly reassuring Answer. Is he aware that 6,800 new jobs in this desolate dockland area are a wonderful prospect which should not be lost on any account? Is my noble friend able to say more definitely that there could be the prospect of the Secretary of State vesting this land in the Docklands
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Development Corporation, which is already making such splendid progress in the redevelopment of docklands?
Lord Bellwin: My Lords, vesting is cetainly an option which is open to the Secretary of State and one which my right honourable friend will doubtless be considering, but I cannot today say more about that.
Baroness Fisher of Retinal: My Lords, can the noble Lord tell the House whether the 6,800 jobs that he has just mentioned will be in manufacturing industries, and, if so, what industries? Alternatively, will they be commercial jobs, light industry jobs, office jobs or whatever? It would be good if the House could have some clear idea of the type of spin-offs that there might be from these industries.
Lord Bellwin: No, my Lords, I cannot do that because the numbers and the particular types will depend entirely upon the final scheme that a developer will decide to put on to the land if it becomes available to him. The problem as regards the point which my noble friend raises is that at the moment, having refused to release the land, it is possible that the situation as it has pertained for some years will continue—that is, that nothing will happen. I should have thought that that was a matter for much greater concern than the type of jobs among the 6,800 to which I referred.

Madrid Conference on Security and Co-operation
2.53 p.m.
Lord Beloff: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the current position in the meeting of the Conference on Security and Cooperation in Europe at Madrid.
Lord Skelmersdale: My Lords, the conference resumed on 9th November. Together with our partners and allies, we have drawn attention to violations of the Helsinki Final Act, particularly by the Soviet Union and Poland, and have stressed the need for a balanced and substantive concluding document covering all areas of the Final Act. To this end, we have jointly put forward amendments to the draft concluding document tabled by the neutral and non-aligned countries.
Lord Beloff: My Lords, while thanking the Minister for that informative, if somewhat depressing, reply, I should like to ask whether the continued refusal of the Soviet Union and the Warsaw Pact countries to honour the spirit of the Helsinki Agreement in so far as contact between peoples is concerned, does not make total nonsense of the claim by Mr. E. P. Thompson and other leaders of the so-called peace movement that their organisation has serious ramifications on the other side of the Iron Curtain?
Lord Skelmersdale: My Lords, we have continually pressed the Soviet Union and its allies on human rights, and. of course, CSCE is concerned largely, but not exclusively, with that subject. I would agree with my noble friend that there are considerably greater human rights in the western part of Europe than in the eastern.
Lord Jenkins of Putney: My Lords, I think the noble Lord on the Front Bench might perhaps agree that the peace movement in this country does not, as suggested by the noble Lord, Lord Beloff, have serious ramifications in Eastern Europe. What it has sought to do is to make contacts in that area. Is it not the case that peace cannot be assured unless such contacts are established, both officially and unofficially?
Lord Skelmersdale: My Lords, I would say that that was exactly the point of a conference such as is currently being held in Madrid. Talks cannot be anything but good. The question is whether what the noble Lord called unofficial talks will have the desired effect, and will effectively do better than the official talks. I rather doubt it.
Lord Harmar-Nicholls: My Lords, bearing in mind the last question and answer, does my noble friend not think that it would be a good idea if the activists at home were to hold their horses until they have made their contacts abroad and they look like producing something equivalent?
Lord Skelmersdale: My Lords, it is an undeniable human right in this country, and I think I am right in saying in the whole of Western Europe, that people should be allowed to make their views known with all the force at their command. It is possible, of course, to go off at a slight tangent. So I would agree with my noble friend, at least as far as he goes, that one should think very carefully before demonstrating, or whatever, for or against a particular point of view.
Lord Cledwyn of Penrhos: My Lords, in the light of what the noble Lord has said, can he say whether the Government are pressing for amendments to the final draft on the subject of human rights? If I may refer to a specific case, can the noble Lord say what the response of the British Government is to the appeal by the three wives of the dissidents in Russia who are suffering under the Soviet Government, one of whom I think is Doctor Orlov? Can the noble Lord say what we are doing about that specific case?
Lord Skelmersdale: No, my Lords, I am afraid I cannot answer the noble Lord's specific point, but I shall of course take the opportunity to write to him. As regards the amendments which are still required to the draft final document, there are, in fact, five of them, four of which concern human rights. Amendments are required, first, on human contacts; secondly, on experts meeting on human rights in the future; thirdly, on the position of trade unions; and fourthly, on official monitoring groups for the Helsinki Final Act. Last but by no means least, there is a conference on disarmament proposed in the draft Final Act and one of our objectives is to seek a real mandate for this and also agreement on the zone of its application.
Lord Broekway: My Lords, would the Minister not agree that during these long discussions the non-aligned nations have sought to bring agreement between the two sides? Is he aware that, while one denounces passionately the denial of human liberty in the Soviet Union, there have also been charges against the western countries? Is it the case that the communiqué of the neutral nations is of such a character that agreement is likely to be reached? Also, what is the Government's attitude to the proposal for a European disarmament conference?
Lord Skelmersdale: My Lords, I would agree with the noble Lord, Lord Broekway, that without the non-aligned nations the current draft document would not be on the table and the Government are extremely grateful to them for that. However, it is also true to say that both sides need an amplification of it and want to make changes to it. I am afraid I have lost the other point that the noble Lord raised. Perhaps he would care to repeat it.
Lord Elvvyn-Jones: My Lords, is it perhaps possible to generate more action by the United Nations Human Rights Commission in this field? They have the power at any rate to inquire, and possibly even to interpose from time to time.
Lord Skelmersdale: My Lords, the possibility is always there.
Baroness Trumpington: My Lords, would my noble friend agree with my experience in the United Nations, that it is difficult to come to any terms on human rights with the Soviet Union, who do not recognise that there is a problem of human rights?
Lord Skelmersdale: My Lords, I do not have the experience to which my noble friend refers; I was not in her place at the time. However, I should think that on balance she is probably right.
Lord Broekway: My Lords, while appreciating the Minister's reply to me, I should like to repeat the question which he apparently missed. What is the attitude of the Government to the proposal at this conference for a European disarmament conference?
Lord Skelmersdale: My Lords, as I said in answer to an earlier supplementary question—and I am grateful to the noble Lord, Lord Broekway, for repeating his own—we very much take the point that it should be there, but with the provisos that I mentioned earlier; namely, that there must be a real mandate and there must be agreement on the zone of application before it can become effective.

Child Care Bill [H.L.]
Lord Avebury: My Lords, I beg to introduce a Bill to abolish local authority resolutions assuming parental rights and make provision for the making of care orders in cases where a child is already in the voluntary care of a local authority; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Avebury).
On Question, Bill read a first time, and to be printed.

National Insurance Surcharge Bill
Brought from the Commons, endorsed with the Certificate of the Speaker that the Bill is a Money Bill; read a first time, and to be printed.

Health and Social Services and Social Security Adjudications Bill [H.L.]
3.2 p.m.
Lord Trefgarne: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Schedule 6 [Medical practitioners etc.]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 86:
Page 56, line 47. leave out ("(staff of health authorities)").
The noble Lord said: This first amendment is in the nature of a drafting amendment. The reference to "health authorities" in the words in brackets would be misleading inasmuch as the definition of "health authority" in Section 128(1) of the 1977 Act, as amended by paragraph 29 of Schedule 5 to the Bill, excludes an FPC; whereas the intention is to include FPCs among the authorities which may employ officers in accordance with paragraph 10(1) of Schedule 5 to that Act. I beg to move.
On Question, amendment agreed to.
Schedule 6, as amended, agreed to.
Schedule 7 agreed to.
Clause 12 [Charges for various social services provided by local authorities]:
Lord Lyell Lord Lyell moved Amendment No. 87:
Page 14. line 22, leave out ("services") and insert ("any service").
The noble Lord said: I hope that it will be for the convenience of the Committee if I move Amendment No. 87 and speak to Amendments Nos. 88 and 89 together. When introducing subsections (1) and (2) of this clause during the Second Reading of this Bill before your Lordships, my noble friend indicated that the main aim of this clause is to bring greater consistency to the powers of local authorities who might, and indeed do, charge for day and domiciliary services. The three amendments that we propose seek to carry this process even further by making the wording of the new subsections to be inserted in the Bill as similar as possible. The amendments have one other purpose which is to make it clearer that the person whose means are to be taken into account in assessing the charge is the person availing himself of this service. I beg to move,
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 88:
Page 14. line 23, leave out ("them") and insert ("the service").
The noble Lord said: I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 89:
Page 14. line 24, leave out ("the services") and insert ("it").
The noble Lord said: This amendment is consequential and I have already spoken to it. I beg to move.
On Question, amendment agreed to.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 90:
Page 14. line 24, after ("services") insert ("(with the exception of home help services)").
The noble Lord said: I beg to move the amendment standing in the name of my noble friend and myself. The purpose of this amendment is to exempt home help services from charges by local authorities. A study in 1980 found that most home help organisers considered charges to be a deterrent to potential home help users. A study of the home help service in Warwickshire in 1977 found that clients paying full charges averaged 1·5 hours fewer per week than the average client, and that part-payers averaged 0·7 hours fewer.
The home help service is so crucial to the wellbeing and independence of many elderly people that it should be provided on the basis of necessity and without charge to the client. The charges for home helps have caused much distress in recent years. It has been the policy of successive Governments that:
"the amount of any charge is not to be such that a recipient would need, because of it, to seek supplementary benefit or an addition to supplementary benefit".
That comes from the DHSS Circular 53/71.
Since November 1980 it has not been possible to receive an addition to supplementary benefit for a local authority home help. Yet several councils have imposed minimum charges and many disabled and elderly people have been forced to give up home helps who they desperately need or go without some other necessity. The local authority associations have not specifically advised their members not to impose charges in these circumstances, but the AMA pointed out the hardship which would be caused if they did so, in AM A Social Services Circular 21/80. The Report of the Joint Working Group on Personal Social Services Charging Policies, on which much of Part VII of this Bill is based, recommended:
"The level of charge should not preclude those in need of the service from using it: in particular, people on a subsistence level of income should not be exposed to financial penalties in using services provided for their needs".
There is no doubt whatever that home help services are absolutely vital, especially to the home-bound, and many of these services go to people living on their own. Vital human contact is received from the home help service. It is vital to these people that this service should continue without any restriction. Elderly people are particularly independent and very often would rather go without the service than face a charge. Therefore, I ask the Committee to consider this

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amendment very carefully indeed because it concerns a vital part of the caring community. I beg to move.
Lord Banks: I should like to support briefly what the noble Lord, Lord Wallace of Coslany, has said. This amendment would make sure that all who need home help would get it, or at any rate they would not be deterred from getting it on financial grounds. The noble Lord emphasised that there is no addition to supplementary benefit now available in order to pay for a local authority home help, and in the absence of that it seems that this amendment is necessary.
Baroness Lane-Fox: May I ask my noble friend the Parliamentary Under-Secretary whether he can give us any guidance as to the amount that is recovered by this payment for home help service? I agree with the noble Lord as to the vital necessity of the service, but I feel that everything is comparative and if enough is not brought in by having this on a payment basis then I should have thought that there was a good case for thinking again.
Lord Trefgarne: As the noble Lord has made plain, the intention behind this amendment is to exempt from charges all those people availing themselves of home help services provided by local authorities. I am afraid I have to tell him that in that endeavour the amendment is defective. It applies to charges made to the broad categories of disabled people provided with home help services under the National Assistance Act and the Chronically Sick and Disabled Persons Act, but does not extend to Schedule 8 to the National Health Service Act 1977, under which local authorities may also provide home help services for other clients and make charges.
Certainly the Government would not support an attempt to single out a particular client group for exemption whereas others, such as old people or problem families with equal need, were not exempt; but I do not think that that was in the mind of the noble Lord. Accepting, therefore, that the noble Lord's intention is that exemption from home help charge should apply to all clients, then I am afraid that here, too, the Government could not support the noble Lord's proposal. Our purpose in Clause 12 is to introduce consistency into charging arrangements between the various services. Given that local authorities will be obliged to take into account the ability of people to pay for these services and have the option, indeed, to waive charges altogether if they think necessary, we see no reason to single out the home help service for special legislative arrangements as proposed in the amendment.
Such arrangements are not a feature of existing legislation and would defeat the underlying purpose of this clause. I do not of course for a moment deny the importance of the home help service, particularly to people such as the ones the noble Lord described, but I do not think that we would be assisting those people by singling them out in the way that the amendment proposes, particularly having regard to the other provisions of Clause 12. As for the point raised by my noble friend, I have not got that figure in front of me. I will see if I can find it out and write to my noble friend.
Lord Wallace of Coslany: The noble Lord said that the aim of the Government was to obtain consistency in charges by local authorities. Is he aware that there is a widespread inconsistency at the moment, and that if the proposals of this Bill are carried forward that inconsistency will remain? The noble Lord said that the amendment is defective. That may be so, but he referred to Clause 12 and he has not yet come to the other amendments that I have tabled on this issue. This, to me, on the home help service in particular, is a personal matter of great principle. Therefore, I propose to divide the Committee on the principle, and if I am successful the Government may have the opportunity to amend the Bill in some way or another at a later stage.
3.15 p.m.
On Question, Whether the said amendment (No. 90) shall be agree to?
Their Lordships divided: Contents, 66; Not-Contents, 75.

DIVISION No. 1

CONTENTS

Amherst, E.

Kennet, L.

Amulree, L.

Killearn, L.

Ardwick, L.

Kilmarnock, L.

Aylestone, L.

Kinloss, Ly.

Banks, L.

Lawrence, L.

Beaumont of Whitley, L.

Leatherland, L.

Beswick, L.

Llewelyn-Davies of Hastoe, B.

Birk, B.

Bishopston, L.

Loudoun, C.

Blyton, L.

Lovell-Davies, L.

Burton of Coventry, B.

Masham of Ilton, B.

Clancarty, E.

Mayhew, L.

Cledwyn of Penrhos, L.

Mishcon, L.

Crook, L.

Molloy, L.

David, B. [Teller.]

Northfield, L.

Diamond, L.

Peart, L.

Donaldson of Kingsbridge, L.

Phillips, B.

Ponsonby of Shulbrede, L. [Teller]

Elwyn-Jones, L.

Elystan-Morgan, L.

Rhodes, L.

Ewart-Biggs, B.

Robson of Kiddington, B.

Fisher of Rednal, B.

Sainsbury, L.

Gaitskell, B.

Shannon, E.

Grey, E.

Stedman, B.

Hale, L.

Stewart of Alvechurch, B.

Hampton, L.

Stewart of Fulham, L.

Hooson, L.

Stone, L.

Hunt, L.

Strabolgi, L.

Ilchester, E.

Strauss, L.

Ingleby, V.

Underhill, L.

Irving of Dartford, L.

Wallace of Coslany, L.

Jeger, B.

Wigg, L.

Jenkins of Putney, L.

Wigoder, L.

John-Mackie, L.

Wootton of Abinger, B.

Kaldor, L.

NOT-CONTENTS

Adeane, L.

Davidson, V.

Avon, E.

De Freyne, L.

Balfour of Inchrye, L.

Denham, L. [Teller.]

Belhaven and Stenton, L.

Drumalbyn, L.

Bellwin, L.

Ebbisham, L.

Boyd-Carpenter, L.

Eccles, V.

Buckinghamshire, E.

Elliot of Harwood, B.

Campbell of Alloway, L.

Elton, L.

Campbell of Croy, L.

Faithfull, B.

Clitheroe, L.

Ferrers, E.

Cottesloe, L.

Fortescue, E.

Cullen of Ashbourne, L.

Gainford, L.

373

Glenarthur, L.

Northchurch, B.

Gore-Booth, L.

Nugent of Guildford, L.

Gridley, L.

Orkney, E.

Hailsham of Saint Marylebone, L.

Pender, L.

Porritt, L.

Hampden, V.

Portland, D.

Harmar-Nicholls, L.

Richardson, L.

Holderness, L.

Romney, E.

Home of the Hirsel, L.

St. Davids, V.

Hylton-Foster, B.

Saint Oswald, L.

Kilmany, L.

Sandford, L.

Kinnaird, L.

Skelmersdale, L.

Lane-Fox, B.

Somers, L.

Lauderdale, E,

Stamp, L.

Long, V.

Strathspey, L.

Lyell, L.

Sudeley, L.

Macleod of Borve, B.

Swansea, L.

Margadale, L.

Swinton, E. [Teller.]

Marley, L.

Terrington, L.

Massereene and Ferrard, V.

Teviot, L.

Trefgarne, L.

Merrivale, L.

Trumpington, B.

Mersey, V,

Vaux of Harrowden, L.

Milverton, L.

Vickers, B.

Mowbray and Stourton, L.

Wakefield of Kendal, L.

Wynford, L.

Noel-Buxton, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
3.23 p.m.
Baroness Masham of Ilton Baroness Masham of Ilton moved Amendment No. 91:
Page 14, line 25, leave out (", having regard to his means").
The noble Baroness said: This is a simple amendment, to delete "having regard to his means". It would not stop a local authority doing it, but if those words remain in the Bill, some local authorities may go in for the distasteful practice of means-testing simply because they think they should. Severe disability brings many problems and stresses to families. Many marriages break up and homes are disrupted. Aids can be of vital importance to disabled people and their families. My noble friend Lady Lane-Fox knows only too well what an advantage her special bed is and what a help her special hoist is, not only to herself but her helpers. Some people are not so lucky as she. Some local authorities do not help a disabled person if they live in a private house. I have been told by a consultant, social workers and occupational therapists that when a person becomes disabled and owns his house, they have recommended that he should sell the house so that he can be rehoused and then helped.
On-going disability involves many extra expenses. I feel so sorry for the single person who has worked and paid taxes and never used the state system for any benefits, and who then becomes disabled in middle-age from a disease such as multiple sclerosis. He then undergoes the demoralising and degrading process of means-testing. His private knowledge of what little he may have saved in the bank by careful living has to be declared and is bandied about the social services department. Canada dropped means-testing, as the administration of it cost more than what it was providing. May we be told how much means-testing costs in this country?
The criterion should be need and it should apply only to necessary equipment and aids. Better assessment and instruction should be given, and the aid or equipment should be on a loan basis. If a patient is
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means-tested and is found to have over the limit specified in the means-test, then buys an expensive and vital aid and dies a few months later, what happens to the aid? All aids costing over £50 should be monitored and collected back when no longer needed. I suggest that aids under £50 should be provided without a means-test: some local authorities do that.
The Government pay out billions of pounds in unemployment benefit. Surely a scheme could be devised so that the unemployed and prisoners shut up in prisons could help to provide aids so that the disabled are helped to live in the community with what they need, instead of having to be scrutinised and interrogated. The Disabled Income Group knows only too well the extra expense severely disabled people have. They would prefer there to be no means-test, but the amendment does not go so far as that. I beg to move.
Lord Wallace of Coslany: I strongly support the amendment because it is most important to the position of disabled people. We in this country should be able to afford to give the disabled the necessary aids to living. Wonderful work is done, for example, by the voluntary organisations, but by introducing what is an unfortunate phrase into the clause the Government are doing a disservice. For that reason I strongly support the principles so eloquently expressed by the noble Baroness, Lady Masham, and I hope the amendment will have the support of the Committee.
Lord Boyd-Carpenter: May I ask the Minister to say what would be the effect of deleting the words as proposed by the amendment? It would seem to leave the local authority to fix charges on the basis that they were reasonable, and as I understand it, "reasonableness" in respect of these charges must include some consideration of the wealth or otherwise of the person concerned. A charge which would be reasonable for a rich man would be unreasonable for a poor one. Therefore, if my noble friend decided to meet the view of the noble Baroness, Lady Masham, would he be losing very much? If not—if it were likely that the local authority would, among other things, take the means of the person concerned into account—is there not something in what has been said in support of the amendment as to the rather disagreeable aspect of laying down a specific means-test? Perhaps my noble friend, when he replies, will address himself to that point, among others.
Baroness Darcy (de Knayth)Baroness Darcy (de Knayth) Following what the noble Lord, Lord Boyd-Carpenter, has said, when the noble Lord the Minister replies, when he deals with the point as to what is "reasonableness", can he say whether certain benefits—for example, the attendance allowance, supplementary benefits, special heating allowance, et cetera—would be disregarded, or would they be treated as income? It must be borne in mind when assessing the means of a disabled person that these items are to do with the additional cost of disability. As the Disablement Income Group has always argued, a person undergoing a means-test should not be assessed on the extra cost of disability; he should not be penalised for the extra cost of disabled life.
I should like very much to support my noble friend's amendment and to echo her request to the Minister to give some idea of the cost of means-testing a person. Furthermore, I wonder whether the Minister can say what proportion of people who are at present means-tested are found to be capable of making a financial contribution.
Viscount Ingleby: I should like to add the mobility allowance to the list of various allowances that my noble friend has just mentioned. This allowance, too, is given for a specific purpose. Will it be excluded?
Lord Trefgarne: I should like first to deal with the very last point that was put to me, by the noble Viscount. I can say that the mobility allowance is centrally provided, and what we are here discussing are services of, and provisions made by, local authorities. So I can at once assure the noble Viscount that the mobility allowance is not one of the matters that we are here discussing.
I now wish to turn to the point that was raised by, I think, almost everyone who spoke on the amendment; namely, the cost of conducting means-tests and the likely benefit to Government funds, or local authority funds, from such a system. I fear that at the outset I have to say that because these matters are all conducted in a different way by different local authorities, it is not possible to arrive at a single figure. However, I do not propose to rest my argument upon the question of the costs or savings, and though I shall be happy to look into the point that has been raised, I do not think that it is one that need persuade us one way or the other.
The amendment proposed by the noble Baroness is opposed to the main purpose of the clause, which is to bring consistency to the charging arrangements for local authority day and domiciliary services. It may assist your Lordships' Committee if I describe the present position, and then indicate the changes that we want to make. At present the powers of local authorities to charge for the services are set out in the Acts mentioned in Clause 12(1) and (2), on the one hand, and in Schedule 8 to the National Health Service Act 1977 on the other hand. The Acts mentioned in Clause 12 include the one to which the amendment refers; namely, the National Assistance Act 1948, which also contains the charging powers for the services provided under the Chronically Sick and Disabled Persons Act 1970. The Acts mentioned in Clause 12 empower local authorities to recover from persons availing themselves of any service provided under the section concerned such charges, if any, as the authority may determine, having regard to the cost of the service. Those words—having regard to the cost of the service—are important.
Schedule 8 to the National Health Service Act 1977, on the other hand, empowers local authorities to recover from persons availing themselves of services provided under the paragraphs concerned such charges, if any, as the authority considers reasonable, having regard to the means of those persons. As I say, that term appeared in the 1977 Act, and at that time the noble Lord, Lord Wallace of Coslany, and his
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noble and right honourable friends were responsible for such matters, as indeed they were in 1948, when the National Assistance Act made the original provision for making charges.
In the case of certain services, such as home helps, as I said earlier, they may be provided under more than one charging régime, and I submit that it is desirable to secure greater consistency in these matters. So in essence we have two or three different statutory provisions for making the services available. All of the provisions enable charges of one kind or another to be made, and at least one provision enjoins us to have regard to the means of those persons being supplied.
The amendments proposed in the Bill thus seek to replace the requirement that authorities should have regard to the cost of the service in the Acts mentioned in Clause 12(1) and (2) by the requirement that they should instead have regard to the means of the person availing himself of the service. That will then mean that there is consistency in the charging powers for this group of services. We think it right that a local authority should be empowered, if it chooses, to recover some of the cost of the services from those who are able to pay. We also consider that if the authority makes a charge, it should be able to vary it according to the means of the person for whom the service is provided, so that no one who really needs a service is prevented by the charge from benefiting from it. I should perhaps emphasise that nothing in the clause requires a local authority to impose any new charge, or increase any existing charge. It leaves local authorities with full discretion to waive or rebate charges when they consider it desirable.
The amendment introduced by the noble Baroness refers only to the National Assistance Act 1948, and not, as I say, to the Acts mentioned in Clause 12(2). It thus introduces a further difference in local authority charging powers, with the result that those provided with services under the National Assistance Act (mainly physically handicapped people) would be in a position different from those provided with services under the Acts mentioned in Clause 12(2) (the elderly) or those provided with services under the National Health Service Act 1977 (mothers and young children, and those requiring help for the prevention, care and after-care of illness, and with handicap, including mental disorder). We do not believe that further difference between groups of people requiring services and indeed between one type of local authority service and another should be introduced by legislation in this way. Therefore I hope that in the light of the shortcomings to which I have pointed the noble Baroness will not wish to press her amendment.
Lord Boyd-Carpenter: I think that my noble friend overlooked the question that I put to him. I asked him—perhaps I may repeat it—what would be the effect of the deletion of the words referred to in the amendment? In particular, in deciding what was reasonable, would not the local authority have to take into account means and other matters, without the disadvantage of a specific means-test?
Lord Trefgarne: I would need to take some advice as to the precise legal implication of an amendment other than the one that is on the Marshalled List before us.
Lord Boyd-Carpenter: I asked the question in relation to the present amendment.
Lord Trefgarne: As I understood it, my noble friend was asking me what would be the effect of an amendment without the words to which he is referring.
Lord Boyd-Carpenter: Surely the point is very simple. We are discussing the amendment that is before us. If it is carried, the words will be taken out. I am asking my noble friend what the clause would mean if that happened. With very great respect, surely that is about as relevant to the present amendment as anything could be.
Lord Trefgarne: I had misunderstood what my noble friend was asking, and I apologise. As I understand it, removing the words in the way proposed would mean that, despite the Bill, we should be left with most of the inconsistencies to which I referred in my earlier remarks, and that would be a distinct disadvantage. I am sorry that I misunderstood my noble friend when he first put the point to me.
The fact of the matter is that a whole range of different provisions are available under the present charging régime. At least one of the provisions requires the question of means to be taken into account, and two or three different charging provisions are also in place, two of them having been imposed on an earlier day by noble Lords opposite and their right honourable friends. In this particular proposal we are seeking to tidy up the arrangements. We do not seek to impose new charges. We do not seek to cause local authorities to make charges where they do not at present make charges, and I believe that the proposal that we have made, whereby authorities ought to have regard to the means of those receiving the service, is a right and proper one. As I say, I hope that the noble Baroness will not wish to press her amendment.
Lord Somers: I agree entirely with the noble Baroness that a means-test is thoroughly undesirable. It is degrading and an absolutely unnecessary invasion into a person's privacy. As the Bill stands, a means-test is not specifically called for. I presume that there is every likelihood that it would take place, but it is not absolutely defined as being necessary. Would it not be possible to insert words to the effect that a means-test is not implied or is not to be used? Surely, if a local authority cannot decide for themselves whether a person is or is not wealthy enough to pay, then they have not sufficient intelligence to be occupying their position.
Lord Trefgarne: With respect to the noble Lord, it is not a question of intelligence but whether the local authority have the necessary information available to them. I must say that I am unrepentant about the words in the Bill. I think that they offer a much better régime for the future than has existed in the past. I certainly take the point made by the noble Lord. If I am reading correctly between the lines of the speech of my noble friend Lord Boyd-Carpenter, I think that he, too, has some reluctance to see imposed a means-test in the worst sense of that expression. So do I; but that is not what is proposed by this provision in the Bill. I rest on what I have said already.
Baroness Wootton of Abinger: We are all in favour of tidying up, of consistency and of avoiding unnecessary complexity. It seems to me that there are two criteria here. One is the criterion of the cost of the service and the other is the criterion of the person's means. In a sense they are related for one would only consider a person's means in relation to the kind of cost that was involved. Would it not be possible for the noble Lord the Minister to take this back again and to think of a formula which would bring both criteria into the Bill?
Lord Trefgarne: With respect to the noble Baroness, that is exactly what I am trying to avoid.
Lord Wallace of Coslany: Of course you are!
Lord Trefgarne: At present, the arrangements are (in some local authorities at least) that patients or recipients are required to pay a percentage of the cost of the service or of the item supplied. That, in some cases, is a very large sum of money indeed. It imposes a great burden on some people who are of limited means. In future, we should like to see the question of their means taken into account by the local authority—not just an imposition of a bald percentage of the cost of the service which is being supplied. I do not think that the cost of the service, as far as the recipient is concerned, is the right criterion. I think that the criterion that we propose on the contrary, the ability of the person to pay, is a more relevant one; and that is what I should like to see in the Bill.
Baroness Wootton of Abinger: I entirely agree with that. That is what I am trying to get at. The cost of the service is a factor that comes in because a service that is a very small one may be a very burdensome one to a person of very small means, while the cost of a service which is much larger may not matter so much to a person of large means. Would it be possible not to prescribe a specific percentage of the cost of the service (as I understand is the present position) but simply to say that these two factors would be brought into the picture?
Lord Trefgarne: If I may speak yet again on this matter, that would be to replace one complex, unsatisfactory system with another even more complex, and probably even less satisfactory.
Lord Leatherland: Clause 12 deals with charges which might be imposed upon people who are blind, deaf, dumb and crippled. If any of those people should happen to be old-age pensioners, are they to be subject to these charges, or are old-age pensioners to be exempt from them?
Lord Trefgarne: It very much depends on the other resources available to the old-age pensioner in question. Some old-age pensioners, particularly after the age of 70 so far as men are concerned, and 65 so far as women are concerned, are not means-tested. There is no earnings rule applied to old-age pensioners after those ages. That being so, they might have very substantial other means. I do not think that that would be a right criterion.
Lord Wallace of Coslany: Is the noble Lord referring to old-age pensioners doing newspaper rounds and earning fabulous sums?
Lord Trefgarne: My own father drew the old-age pension—or would have done so—after the age of 70, had he lived that long. He would certainly have been able to pay, I think, for the sort of facilities we are thinking about.
Baroness Darcy (de Knayth): The Minister talks a lot about having regard to a person's needs, but I do not think he has yet answered my question on disregard—which I hope he will, because it is very important. He said in answer to my noble friend Lord Ingleby that mobility allowance could be disregarded. What about all the other benefits designed to offset the extra cost of disabled life, such as supplementary benefits, dependants' allowance, et cetera? Will they be disregarded, or will they be treated as income?
Lord Trefgarne: I am not in a position to answer the noble Baroness precisely because I think we want to leave some flexibility to local authorities in this matter. I am trying to resist the suggestion that we are imposing some very formal, classified, precise, procedure in these ways; because we are not. We are saying to local authorities that they ought to be able to take into account the means of people. I hope that the noble Baroness will not press me too closely on that point because I should like to leave a good deal of discretion to local authorities on this matter.
Baroness Darcy (de Knayth): Do I gather from the Minister's reply that if it is left open to local authorities some local authorities may disregard those essential allowances and others will not, and that there will be disparity between them?
Lord Trefgarne: There will, of course, be guidance to local authorities in these matters and we shall have to see how that comes.
Baroness Jeger: Further to that point, can the Minister say whether he will be expecting the disregards to apply for capital for purposes of supplementary benefit?—which disregards do not include the surrender value of life policies or leases of one's home as distinct from owner occupation. If that is so, there will be considerable hardship.
Baroness Masham of Ilton: I think this is a very complicated matter and I, personally, feel very strongly that the Government have got it wrong. I think that the people who do not smoke, do not drink, have lived carefully and saved some money are then going to be penalised. I think that is wholly unfair. I think that in this amendment we are dealing with the dumb, the blind and the disabled. These are perhaps the most unfortunate people in our society. To answer the question of my noble friend Lady Darcy (de Knayth), I was told the other day that somebody could have the mobility allowance and that this would not be taken into consideration until they had collected it and saved it to go on holiday and then, when they had a bulk sum in the bank, it would be taken into consideration. Therefore, to put emphasis on having regard
380
to their means is just helping the skivers and being most unfair to those people who probably have very little and want to save and live carefully. For that reason I would ask noble Lords to come into the Lobby with me. I should like to divide the Committee.
Lord Boyd-Carpenter: Before we come to that stage, may I, nonetheless, ask my noble friend to help some of us who are very much troubled by this? My noble friend said that guidance would be given to local authorities as to how they were to deal with the question of means. Obviously, in practical terms, a great deal will depend on that. I have no idea what the outcome of a vote now would be; but I wonder whether my noble friend would not think it a practical step to say that he will consider this matter further and so enable an amendment to be taken at Report stage; and that when we come to that he will then be, I hope, in a position to tell the House—it will then be a House and not a Committee—exactly how this would work by giving a quotation from the intended guidance and answering the question which, understandably (and I am not being impertinent in criticising him) he is in no position to answer this afternoon? I think that he can see that there is a great deal of feeling in the Committee, and not merely confined to one quarter. I wonder whether he can ease the position a little by giving us some help in this way?
Lord Trefgarne: I am certainly willing at some future stage of the Bill to expand further upon the various issues that have been referred to this afternoon. If the noble Baroness wants to withdraw her amendment and tackle me again on the subject at another stage, I have no objection at all to that course. However, I do not want the noble Baroness to get the impression that the Government are in any way wavering upon the proposals that are contained in this particular clause. I am convinced and unrepentant that the right approach is to standardise—to use a rather horrible word—the procedures in assessing the charges for these services. At the moment we are in a position where all sorts of different régimes can and do apply—generally I fear to the disadvantage of those who receive these services. I should like a better régime to apply in future. That is what is contained in these provisions. I remain willing to answer a similar amendment at another stage of the Bill, though I would not want the Committee to imagine that the Government are in any way reconsidering their position on this matter.
Lord Wallace of Coslany: The noble Lord mentioned guidance. Who is going to give the guidance to local authorities? Is it the AMA? If that is the case, the noble Lord is as well aware as I am that so far negotiations have foundered. There is no possible chance that the AMA can formulate a set of guidance to local authorities. He knows that as well as I do.
Baroness Masham of Ilton: I think that the noble Lord the Minister has been honest. I feel that the Government will not change their mind so far as means-testing is concerned. I know that the people who worked on the Chronically Sick and Disabled Persons Act 1970 were very worried and are still

381
worried 11 or 12 years later. This is because people who need help from the social services departments have not come forward because they are frightened of being rebuked. The five little words in my amendment are going to make people go even less to the social service department for help. So, I still ask your Lordships to come into the Lobby with me. I should like to divide the Committee.
3.52 p.m.
On Question, Whether the said amendment (No. 91) shall be agreed to?
Their Lordships divided: Contents, 81; Not-Contents, 76.

DIVISION NO. 3

CONTENTS

Airey of Abingdon, B.

McFadzean, L.

Avon, E.

Macleod of Borve, B.

Bellwin, L.

Mancroft, L.

Beloff, L.

Margadale, L.

Boardman, L.

Marley, L.

Campbell of Croy, L.

Massereene and Ferrard, V.

Cathcart, E.

Merrivale, L.

Cockfield, L.

Mersey, V.

Coleraine, L.

Mottistone, L.

Colwyn, L.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Napier and Ettrick, L.

Daventry, V.

Newall, L.

Denham, L. [Teller.]

Northchurch, B.

Dilhorne, V.

Nugent of Guildford, L.

Drumalbyn, L.

Orkney, E.

Eccles, V.

Orr-Ewing, L.

Elliot of Harwood, B.

Plummer of St. Marylebone, L.

Elton, L.

Renton, L.

Faithfull, B.

Romney, E.

Fortescue, E.

St. Davids, V.

Fraser of Kilmorack, L.

Saint Oswald, L.

Gibson-Watt, L.

Salisbury, M.

Glenarthur, L.

Skelmersdale, L.

Hailsham of Saint Marylebone, L.

Soames, L.

Strathcona and Mount Royal, L.

Hatherton, L.

Holderness, L.

Strathspey, L.

Hornsby-Smith, B.

Sudeley, L.

Hylton-Foster, B.

Swansea, L.

Killearn, L.

Swinfen, L.

Kinloss, Ly.

Swinton, E. [Teller.]

Kinnaird, L.

Terrington, L.

Kinnoull, E.

Teynham, L.

Lane-Fox, B.

Trefgarne, L.

Lauderdale, E.

Vaux of Harrowden, L.

Long, V.

Vickers, B.

Loudoun, C.

Vivian, L.

Lucas of Chilworth, L.

Wakefield of Kendal, L.

Luke, L.

Wynford, L.

Lyell, L.

Young, B.

NOT-CONTENTS

Ailesbury, M.

Gaitskell, B.

Ardwick, L.

Gregson, L.

Aylestone, L.

Hale, L.

Balogh, L.

Hampton, L.

Banks, L.

Hanworth, V.

Birk, B.

Harris of Greenwich, L.

Bishopston, L.

Hatch of Lusby, L.

Blyton, L.

Houghton of Sowerby, L.

Boston of Faversham, L.

Ingleby, V.

Brockway, L.

Jeger, B.

Bruce of Donington, L.

Jenkins of Putney, L.

Cledwyn of Penrhos, L.

John-Mackie, L.

Collison, L.

Kagan, L.

Cooper of Stockton Heath, L.

Kaldor, L.

Darcy (de Knayth), B.

Kilmarnock, L.

David, B. [Teller.]

Listowel, E.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B.

Davies of Penrhys, L.

Lloyd of Hampstead, L.

Diamond, L.

Lovell-Davis, L.

Elwyn-Jones, L.

MacLeod of Fuinary, L.

Erroll, E.

Masham of Ilton, B.

Ewart-Biggs, B.

Mayhew, L.

410

Melchett, L.

Stedman, B.

Mishcon, L.

Stewart of Alvechurch, B.

Molloy, L.

Stewart of Fulham, L.

Oram, L.

Stone, L.

Paget of Northampton, L.

Taylor of Gryfe, L.

Peart, L.

Underhill, L.

Phillips, B.

Wallace of Coslany, L.

Ponsonby of Shulbrede, L. [Teller.]

Wells-Pestell, L.

White, B.

Robson of Kiddington, B.

Wigoder, L.

Sefton of Garston, L.

Winstanley, L.

Shackleton, L.

Winterbottom, L.

Somers, L.

Wootton of Abinger, B.

On Question, amendment agreed to.

Resolved in the affirmative, and amendment agreed to accordingly.
4.2 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 92:
Page 14, line 25, at end insert—
("Provided that no charge shall be recoverable for any service other than the provision of a meal from a person who is in receipt of supplementary benefit or whose weekly net disposable income is, or would be after payment of the charge, less than the aggregate of the sums for the time being specified in section 6(1)(a) of the Social Security Pensions Act 1975 and column (3) of paragraph 6 of Part IV of Schedule 4 to the Social Security Act 1975 and whose capital resources are less than the sum for the time being specified in Regulation 7 of the Supplementary Benefit (Resources) Regulations 1981.")
The noble Lord said: After the Division we have had, which has given a degree of pleasure in some respects, I should like to move Amendment No. 92 and to take with it Amendments Nos. 94 and 95. They are all on the same theme and although they avoid means-testing they do give exemptions where need applies because of the circumstances of the individual. The noble Lord, Lord Trefgarne, has already referred to inconsistences in charging by local authorities and this, quite frankly, will continue to be the case if this Bill goes through unamended. These three amendments, therefore, are designed to avoid charges being levied on people with very low incomes for services provided under a variety of enactments.
It might be argued that individual local authorities should be left to make their own decisions. That is the theme which the noble Lord, Lord Trefgarne, has emphasised quite frequently during the Committee stage but, as I have pointed out, the patterns vary from local authority to local authority, and in some cases some of them impose charges which disabled people are unable to pay. It really boils down to the fact that whether you get the best relief for these services depends on where you live. That is not good enough. You might be in an area of a local authority—I am not pointing in any political direction—whose outlook was in the main progressive. Then you may come to another local authority whose attitude of mind seems

383
to be, "These people must pay", and they are very tight indeed on their services. From one's own experience, one could point out a number of these authorities. I do not intend to do so, but it is a fact, and we all know it.
On Second Reading, the noble Lord, Lord Trefgarne, said at col. 772 on 22nd November that he thought the local authority associations would certainly be issuing guidance to their members. He mentioned that quite recently in the discussion on the previous amendment. The AMA appears to have made little progress, however, and the noble Lord will know that. I understand that there is in fact little chance of such action being taken because of the extreme difficulties in the way of formulating notes of guidance. In any case, whether the AMA can eventually act or not, these amendments provide a fair basis and will safeguard the worse-off section of our community. That is the basis of the amendments—to protect the worse-off, not avoiding any legitimate charge but at least protecting the worse-off sections of our community. Surely that should be our primary objective. I hope the Government will see that this amendment is not critical in the sense of avoiding any charge on a person. It lays down a formula which would help the Government in their objective of getting some real basis of consistency. I beg to move.
Lord Banks: Again, I should like briefly to support the amendment which has just been moved and to express support for all three of the amendments to which the noble Lord spoke. As he explained, they are designed to see that the elderly and the disabled do not have to pay for services except meals, if they are on supplementary benefit, if their net disposable income is less than the retirement pension after the effect of the charge has been taken into account and if their capital resources are less than £2,500. In those circumstances they are not required to pay; and that seems reasonable.
Lord Trefgarne: I hope I can assist your Lordships in this matter by saying that the Government have complete sympathy with the principle of these amendments in so far as they seek to relieve people on low incomes and with small capital resources from local authority charges for services that they need. It has been the consistent policy of the Government that local authorities should not charge those receiving day and domiciliary services who are living at supplementary benefit levels or who would suffer real hardship if required to pay charges. We need to be careful, however, about enshrining that principle in legislation and particularly in the terms proposed. Legislation removes any flexibility in suiting charging arrangements to the overall circumstances of the client.
The amendment already excludes the meals service from the exemption, presumably in recognition of the element in supplementary benefit which provides for food. Supplementary benefit is not a fixed sum: the scale rate varies according to the circumstances of the individual, and additional benefits may be paid for some items which may also be provided as local authority services. There are thus several areas of
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overlap which need to be examined. There is also some doubt whether the particular method of assessing the income level of those to be exempted from charges who are not in receipt of supplementary benefit is the most equitable and appropriate, however administratively convenient it may be or may not be. The advent of housing benefit will take some people out of supplementary benefit and reduce the supplementary benefit of others. Its effects will need careful assessment. The proposed amendment to Schedule 8 to the National Health Service Act (paragraph 2(5)) also brings the provision of residential accommodation for the mentally ill and mentally handicapped, alcoholics and drug addicts within the scope of the exemption from charges and further consequent complications in relation to both supplementary benefit and charging other client groups for residential accommodation.
These are questions on which we need to consult the local authority associations. I said at Second Reading that the local authority associations had originally agreed to issue administrative guidance to member authorities about assessing people's ability to pay. The principle behind these amendments was among the conclusions of the joint working group of central and local government officials which led to these legislative proposals, and it might well have been embodied in advice by the associations. We have now heard from one of the associations that they no longer think it appropriate to issue such advice.
I would, therefore, ask the noble Baroness and the noble Lord whether they would consent to withdraw their amendment at this stage, on the understanding that the Government will look into the matter with the local authority associations, and, if a suitable formula can be devised—and I would not wish to hide from your Lordships some of the difficulties in the way of this—they will introduce an amendment at the Report stage of the Bill.
Lord Wallace of Coslany: The noble Lord has been quite generous—I nearly said "for a change", but that would not be fair—in indicating that there is some sympathy with the amendment. As he has undertaken to see whether there is a case for formulating something, I shall willingly withdraw the amendment. Let us look forward to the Report stage, or, if that is not to be. possibly to the Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lyell Lord Lyell moved Amendment No. 93:
Page 14, line 26, leave out subsection (2) and insert—
("(2) The following subsection shall be substituted for subsection (2) of section 45 of the Health Services and Public Health Act 1968 (promotion by local authorities of welfare of old people)—
"(2) Where a person avails himself of any service provided in pursuance of arrangements made under this section, the local authority providing the service may recover from him such charges (if any) for it as they consider reasonable, having regard to his means.".
(2A) The following subsection shall be substituted for subsection (2) of section 8 of the Residential Homes Act 1980 (provision of meals and recreation for old people)—
"(2) Where a person avails himself of any service provided in pursuance of arrangements made under subsection (1) above, the district council providing the service may recover from him such charges (if any) for it as they consider reasonable, having regard to his means.".).
The noble Lord said: This amendment is consequential upon the earlier amendments, Nos. 87, 88 and 89, to which I spoke. I am afraid I inadvertently omitted to mention that this amendment is part of that series. I beg to move.
Lord Somers: In view of the fact that Amendment No. 91 was agreed to, and two subsections of this amendment end with the words "having regard to his means", would the Government consider deleting those words? Without them, we would simply have "as they consider reasonable", which seems to me entirely satisfactory.
Baroness Jeger: While the Minister is looking for the answer, may I say that, as it was the will of the Committee earlier that the words "having regard to his means" should be expunged, it is surely for the Government to take them out of their position here in the Bill.
Lord Trefgarne: I think the noble Baroness is quite right. Although I could no doubt insist upon this amendment (or, at least, seek to) I shall not do so, and I seek leave to withdraw the amendment now. If I am right in my brief that it ought to be in the Bill, I will bring it forward at the next stage. But, on behalf of my noble friend, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 94 and 95 not moved.]
Clause 12, as amended, agreed to.
Clause 13 [Contributions in respect of children in care]:
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 96:
Page 15, leave out lines 14 to 23 and insert—
("46.—(1) Subject to the provisions of this section and section 47 of this Act, a local authority in whose care a child is may serve upon a person liable to contribute in respect of that child under section 45 of this Act (a "contributor") a notice in writing (a "contribution notice") specifying the amount of such contribution determined in accordance with the following subsections of this section.").
The noble Lord said: The purpose of this amendment is to ensure that the existing provision requiring the service of a notice is retained, and that it does not become a contractual or other legal obligation until after an agreement is reached, or a court order is made. The advantage of this arrangement is that there will be a clear procedure at three separate stages: first, the local authority informs the parent that he, or she, may be liable to contribute; secondly, the local authority and the parent have time to agree the charge or to get a decision from the court; thirdly, the arrangement is likely to enhance the chances of co-operation between local authority and family and, in turn, of regular payments from the parent. I beg to move.
Lord Trefgarne: We are, I think, discussing Amendments Nos. 96 to 103, which all address themselves to the same point. Local authorities have sought for some time the power to levy flat rate contributions in respect of children in care, rather than
386
having to make a detailed assessment in every case. This was one of the recommendations of the joint local authority and departmental working group on charging policies. By means of this Bill, we are to give local authorities power to levy flat rate contributions for children in care. However, they will still have the power to make a detailed assessment in individual cases, if they so wish, subject to an upper ceiling. Local authorities will be given power not to levy a charge at all, if they consider contributions to be inappropriate in any particular case. The provisions of the Bill will have the effect of simplifying the administrative arrangements and reducing administrative costs.
The amendments proposed will, I fear, have the reverse effect and will also involve the detailed means-testing of contributors. The effect of the amendments is to impose complicated and restrictive rules on local authorities for the purpose of assessing the amount of contribution payable in respect of children in care. This was one of the recommendations of the joint local authority and departmental working group, to which I referred just now.
I consider that, as local authorities have been given statutory responsibility for the children in their care, it makes sense that they should be given discretionary powers on whether, and how much, to charge for the services they provide. Therefore, I do not, I am afraid, support the proposed amendments, including the amendment by which the Secretary of State would be given power to make regulations governing liability for, and assessment of, contributions for children in care. This is in keeping with our desire to keep to a minimum the number of central Government controls over the activities and delegated powers of local authorities.
A further effect of the amendments is to introduce a reduced and, if I may say so, inappropriate upper limit to the amount of contribution payable. Complete exemption from liability is introduced for several categories of persons, which again, I think, is inappropriate. Many young people in care, including those receiving social security benefits, have incomes sufficient to allow them to make some contribution towards their keep, however small. Under the arrangements proposed, a large number of these young people would be exempted from the requirement to make any contribution at all. I believe that this would not help them to develop a sense of responsibility in financial matters, which is so important. The net effect of these changes would be to reduce considerably the income which local authorities receive in the form of contributions in respect of children in their care.
I can tell your Lordships that the local authority associations will be setting up a working group to consider the drawing up of a sliding scale governing the charging of young people in care. In addition, they are going to consider drawing up a list of factors which may be taken into account in assessing the ability of parents to contribute towards the maintenance of children in care. For these reasons, I hope that the noble Lord will not press his amendment.
Lord Wallace of Coslany: The noble Lord has gone to town in a big way, because he has discussed all the subsequent amendments which I have yet to move. I

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am dealing only with the provision of the notice, but the noble Lord has gone hareing away and has replied to several amendments on which I may speak at some length. If there is difficulty over the question of the notice, I shall not press that point. I shall examine the mass of information which the noble Lord has given on all sorts of subjects related to the various amendments, and will come forward at Report stage on Amendment No, 96. Therefore, I shall withdraw that amendment, although I do not understand what the noble Lord is getting at.
Lord Trefgarne: I apologise to the noble Lord. I said at the outset of my remarks that I thought he wanted to discuss Amendments Nos. 96 to 103 together, and that is why I made the speech that I did.
Lord Wallace of Coslany: That may have been healthy anticipation, but I had no such idea. It has put me in a spot.
Lord Trefgarne: The noble Lord did not say "No".
Lord Wallace of Coslany: I was so astounded.
Lord Trefgarne: Again, I apologise. I thought the noble Lord nodded in assent when I said that at the beginning of my remarks. If I mistook the noble Lord in any way, I apologise.
Lord Wallace of Coslany: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.19 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 97.
Page 15, leave out lines 24 to 37 and insert—
("(2) The amount specified in a contribution notice shall not be greater than the weekly amount which is payable in respect of a dependant child to a person in receipt of the widowed mothers' allowance under subsection (4) of section 41 of and column 2 in Part IV of Schedule 4 to the Social Security Act 1975.").
The noble Lord said: This is an important amendment, in spite of what the noble Lord said. Its purpose is to set a realistic maximum limit on the weekly amount that a local authority can charge parents of children in care. The suggested maximum is the amount paid for a child to a person in receipt of a long-term national insurance benefit, such as the widowed mother's allowance. The current amount is, I understand, £7·95.
Under the present system, the charges which local authorities levy are often unreasonably high. Authorities are allowed to charge up to the weekly amount that they themselves normally pay to foster parents. In 1981, such fees could be anything from £17 per week for a very young child to £35 for a young teenager. A survey of local authority practice revealed that many authorities make an immediate charge of the allowed maximum, leaving it to parents to write back if they consider the charge to be too high.
Many of the demand letters from local authorities are in standard form and are full of complicated legal phrases. They can be so easily intimidating to vulner-
388
able parents who are already suffering from the strain and stress of surrendering or losing their child to public care. If the parent does not reply and the authority does not review its scheme regularly, it could continue to operate the maximum charge throughout the child's stay in care. When parents submit details of their income and are then assessed by the local authority, they can still be liable for hefty contributions which drag them down to near or below subsistence level.
The amendment provides for equity between families. It seems to make sense that the amount paid to a parent who needs to claim benefit to maintain his or her child at home should be used as a guideline for the amount that a parent should contribute to the maintenance of a child away from home. I beg to move.
Lord Banks: I support this amendment. As the noble Lord said in his closing remarks, it seems right and wholly reasonable that the limit to be put on the contribution which is made to help to maintain a child in care should be similar to the limit which is placed on the amount of benefit given to somebody who wants to maintain his child at home. I do not believe that this proposal is subject to the criticisms of the other amendments which the noble Lord the Minister put forward in his reply to the previous amendment.
Lord Trefgarne: Although I am always reluctant to resist an amendment simply on the basis of some alleged technical defect, I am told that there is one in respect of this amendment of which your Lordships will wish to be apprised. It fails to make reference to any one paragraph of column 2 in Part IV of Schedule 4 to the Social Security Act 1975, and therefore to any one benefit, and is thus ambiguous. Be that as it may, I deployed the difficulties about this amendment in my earlier remarks. I am reluctant to bore your Lordships with a further extract from what I have already said, but the Government see difficulties with this amendment, along the lines which I described earlier. I hope, therefore, that the noble Lord will not press it.
Lord Wallace of Coslany: Apparently a technical hitch is involved. On that basis I shall reconsider the amendment, and in the meantime I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 98:
Page 15, line 37, at end insert—
("(2A) A contributor shall not be liable under section 45 of this Act to pay any contribution in respect of a child in care for as long as the contributor is—

(a) in receipt of or entitled to apply for supplementary benefit under the Supplementary Benefits Act 1976. or

(b) in receipt of or entitled to apply for housing benefits under Part II of the Social Security and Housing Benefits Act 1982. or

(c) in receipt of or entitled to apply for family income supplement under the Family Income Supplements Act 1970. or would be so entitled if the child or children in care were living in the same household as the contributor.")

The noble Lord said: I beg to move this amendment, which stands in my name and that of my noble friend Lady Jeger. The purpose of the amendment—this

389
comes right up against what the noble Lord said in his mass contribution on this group of amendments—is to exempt from parental contributions all families who receive or are entitled to supplementary benefit, family income supplement or housing benefit. The proposals in the Bill give local authorities discretion to waive a charge in any particular case but do not provide for the statutory exemption of any family or group of families. The proposed amendment would lift an impossible burden from whole groups of poor parents and greatly reduce the time, money and energy currently spent by local authority staff upon assessing and collecting contributions.
I shall not proceed any further because what I have just said should appeal to the Government. I claim that the amendment would greatly reduce the time, money and energy currently spent by local authority staff upon assessing and collecting contributions. I beg to move.
Lord Trefgarne: I am afraid that there is another small technical defect in this amendment. If the noble Lord turns his eye to paragraph (b) he will see the words, "in receipt of or entitled to apply for housing benefits". I am told that the whole world is entitled to apply for housing benefits. What is relevant is whether or not one is entitled to receive them. That is a difficulty which the noble Lord will no doubt wish to put right at some later stage, if he sees fit to proceed with the matter. I do not wish to deploy all the arguments which I deployed just now but, as I have already said, this amendment contains a technical defect.
Lord Wallace of Coslany: In view of the technicalities involved and the resulting defects, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 99:
Page 15, line 37, at end insert—
("(2B) In determining the amount to be specified in the contribution notice the local authority shall calculate the assessable income of the contributor by deducting from his gross earnings or other income the following amounts—

(a) income tax;

(b) any contribution under Part I of the Social Security Act 1975 paid by the contributor or by his employer on his behalf the amount of which is deducted by the employer from the contributor's earnings;

(c) contributions to an occupational pension scheme;

(d) expenses reasonably incurred by the contributor without reimbursement in respect of travel to and from his place of work, reasonable provision for the care of another member of the household during the contributor's absence from home in respect of work and any other expenses reasonably incurred by the contributor for the purposes of his employment;

(e) expenses reasonably incurred by the contributor and his family in maintaining contact with the child or children in care, including the cost of travel and subsistence, of reasonable gifts and of items of clothing;

(f) any child benefit payable under the Child Benefit Act 1975.").

The noble Lord said: I beg to move this amendment, which stands in my name and that of my noble friend Lady Jeger. The purpose of the amendment is to provide local authorities with a clear statutory formula
390
for calculating a parent's disposable income. At present, as we all know, authorities use whatever formula they choose, and nine out of 10 authorities use the ordinary supplementary benefit rates to measure how much a family can afford to pay. Then they subtract from the family's net income the supplementary benefit entitlement. After that, practice varies widely. Some, though not all, authorities make an allowance for travel to work and other expenses, such as hire purchase commitments. What almost all authorities fail to do is to ensure that the family is left with enough money to keep up contact with their child in care.
No authority we know of makes an allowance for the cost of visiting a child. Such visits sometimes entail a long journey, a meal out and possibly an overnight stay. Money is also needed for telephone calls and for buying and sending letters, cards, birthday presents and items of clothing. It is good for families to keep in touch and maintain contact; it is often crucial in attempting to reunite a family. But the expense incurred by parents can be heavy. If there is a technical fault this time I shall look into it, but I feel that this is a matter which could usefully be looked at by the Government. I do not intend to press the amendment at this stage, unless the Government give a most unsatisfactory reply. I beg to move.
Lord Trefgarne: I must confess that my scrutiny thus far has not revealed any obvious technical defect in the noble Lord's amendment. None the less, I would ask the noble Lord whether he really thinks it right to impose a detailed panoply of regulation and restriction upon the arrangements we propose. We much prefer a more flexible approach to these matters. Experience has shown in some other areas of benefit that a whole raft of tiny, minute regulations, whether in statute, statutory instrument, or whatever, tend to cost a great deal to administer, throw up as many anomalies as they solve and in the end do not provide a greater level of benefit to those whom they are supposed to help. At the same time they bring into being a great department of officials and staff of every kind to operate the system. I hope that the noble Lord will therefore accept the general objection to the proposals contained in this and the immediately following amendments, and, although I am happy to deploy further detailed arguments if the noble Lord wishes, he might prefer that I did not do that.
Lord Wallace of Coslany: That is a matter for consideration. I want the Government to think about this because a child in care should be treated on the same basis as a child in hospital. The parents of a child in hospital are not subjected to the particular points about which I have complained. All I ask is that the matter should be considered. Separation can be agonising even though there may be good reasons for it and the question of reuniting the child with the parent is vitally important. It is possible that visits can help in that way. I am not a social worker and I do not have the great experience of the noble Baroness, Lady Faithful], but there is something in this amendment and I hope that the Government will look into it.
Lord Trefgarne: I do not want to be unreasonable in these matters. I will certainly between now and the

391
next stage look at the point which the noble Lord has made. I would not want to raise any undue expectations in the mind of the noble Lord, Lord Wallace of Coslany, because there are the difficulties which I have described. However, if the noble Lord will withdraw his amendment now, I shall not object if he wants to ask me about it again at the next stage.
Lord Banks: Before the noble Lord, Lord Wallace of Coslany. reacts to what the noble Lord the Minister has just said, may I just underline one point in relation to this amendment, which calls for a disregard of child benefit? This highlights the difference between the treatment of a child in hospital and the treatment of a child in care. With the child in hospital, child benefit continues for 20 weeks and may continue longer than that if the parents are maintaining contact with the child in hospital; whereas, with the child in care, benefit lasts for only eight weeks and then stops. Very often the benefit paid during those eight weeks is required by the local authority by means of a payment. There seems to be a considerable difference in this respect between the position of children who are not in very different situations. I wonder whether the Minister could say something about this point at this stage or at some other stage.
Lord Trefgarne: Perhaps I may take that point into consideration between now and the next stage, as I undertook to do when replying to the noble Lord, Lord Wallace of Coslany.
Lord Wallace of Coslany: I am very grateful to the noble Lord, Lord Banks, for stressing a point which I could have enlarged upon—but I found myself getting into the position which the noble Baroness, Lady Faithfull, described at a previous Committee sitting when she said she felt that she was bashing her head against a brick wall. Therefore, I did not continue to speak too long on this particular point. A promise has been given to look into this matter and therefore I withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 100:
Page 15, line 37, at end insert—
("(2C) Where the assessable income of the contributor, calculated in accordance with subsection (2B) above—

(a) is less than an amount which is 140 per cent. of the sum specified in section 6(1)(a) of the Social Security Pensions Act 1975. no contribution shall be required of the contributor;

(b) exceeds the amount specified in paragraph (a) above, the amount of the contribution payable by the contributor shall not exceed 50p for every £1 of that excess, but the total amount of the contribution shall not exceed the amount specified in subsection (2) of this section.").

The noble Lord said: The purpose of this amendment is to provide local authorities with a set formula for calculating the amount of disposable income that can be levied for contributions. At present, once local authorities have calculated the parents' disposable income they then recover contributions from the parents at varying rates. These can rise to as high as 75p in every £1. Three local authorities out of 75 surveyed used scales which finally took a near-confiscatory 100 per cent. of assessable
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income. It is considered that it should not follow as a matter of principle that families with children in care should be reduced to subsistence level. They should be left with enough money to provide properly for their other children and home responsibilities.
The proposals are twofold. First, they would require local authorities to exempt from contributions any parent whose disposable income was less than 140 per cent. of the long-term supplementary benefit rate. Secondly, the amendment would ensure that any excess over 140 per cent. could not be levied at a rate higher than 15p in the £1. That is the substance of the amendment. Here again, I am in some difficulty because the noble Lord the Minister has raced on and covered the whole scene. Nevertheless, I wonder what his reaction is to this amendment: I hope that he will not say this time that it has a technical defect. I beg to move.
Lord Trefgarne: I have no doubt that if I examine the amendment long enough a technical defect will occur to me. In the meantime, I should prefer to rest upon the difficulty I described during my earlier remarks about the inappropriateness of an upper ceiling to the amount of contributions which are payable. Complete exemption from liability is introduced for several categories of persons, which I believe is one of the provisions of a later amendment. As I said earlier, there is a great deal of complexity inherent in the raft of amendments which the noble Lord is now proposing. In general, I believe that these are undesirable, and that is the principal difficulty with the amendment which the noble Lord is now proposing.
Lord Wallace of Coslany: I will not prolong this argument. This is an important point and one that we should take into account; it is in line with what the Government want. I beg leave to withdraw the amendment at this stage.
Amendment, by leave, withdrawn.
4.36 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 101:
Page 15, line 37, at end insert—
("( ) Subject to the provisions of this Section, the Secretary of State shall make regulations further limiting which persons shall be liable to make contributions with respect to children in care, and as to the contributions which may be required of them.")
The noble Lord said: The purpose of this amendment is to require the Secretary of State to limit by regulations the discretion of local authorities to charge young people in care aged over 16 for their keep. It would also allow for regulations on parent contributions. A survey of social services departments' policies carried out for the Children's Legal Centre since the Bill was presented reveals wide and illogical variations in charging policy. This is unjust, and I have made frequent reference to this point when speaking to previous amendments.
For example, the personal allowance for pocket money and clothing with which young people in care are left after contributions have been deducted from their pay at the age of 16 varies from £7.70 in Birmingham to £16 in Hounslow. Authorities also

393
make allowances for fares to and from work, lunch, and other essential expenses connected with employment, The maximum that young working people aged 16 to 18 are required to pay towards their board and lodgings varies widely. Most authorities have a scale linking contributions to earnings. The maximum contribution required varies from £44 a week in Birmingham to £16.85 in Wakefield. It appears that a number of local authorities are still illegally requiring young people not in remunerative full-time work—that is, those in receipt of supplementary benefit or a training allowance—to contribute. In some cases, local authorities have refused to repay contributions which have been obtained illegally.
On the other hand, since the legal position was clarified earlier this year, some local authorities have ceased to require contributions from young people not in remunerative full-time work and have made arrangements to repay such contributions received. A logical policy would be one which ensures that young people will be left with, as a minimum, the present non-householder rate of supplementary benefit—that is, £15.80. This will place young people in care receiving supplementary benefit on the same basis as those living at home. The Government's policy is to treat 16-and 17-year-olds living at home as being wholly dependant on their parents, even if they have a small income.
During a debate on housing benefits and regulations in another place. Mr. Hugh Rossi said:
"It seems to me that 16-and 17-year-olds should be treated as dependent upon their families and not as non-dependants, whether or not they have a small income of their own."
It is important to emphasise that under the new housing benefit scheme non-householders aged under 18 will no longer receive the automatic housing addition to their supplementary benefit. If care authorities provide for young people aged 16 to 18 in such a way that they are classified as householders or joint householders for benefit purposes—for example, through independent living schemes in bed-sits—then the young people involved will be able to claim housing benefit, as can young people not in care but living independently of their parents, and they could be charged a reasonable rent et cetera if the authority was providing the accommodation.
These points underline the fact that this is a complex area, in which it is not enough simply to give local authorities maximum discretion. In order to treat young people in care equitably in relation to other young people, regulations should be issued following a proper and full consideration of current practice. May I conclude by saying that this is a most important and complex matter and is one that deserves very careful consideration indeed. Perhaps the Government will give an indication that they are prepared to consider it. I beg to move.
Lord Trefgarne: I do not wish to be unreasonable to the noble Lord, but at the same time I do not want to raise any unjustified expectations in his mind. However, if he does want to withdraw the amendment now and return to this matter at a later stage, I shall certainly be very happy for him to do that and to give the matter further consideration myself between now and then. But, as I say, I shall certainly come to this
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matter with the basic belief that we want to keep these things as simple and as easily understandable as possible. It may be that there is some improvement that can be made within those criteria. If the noble Lord would like to withdraw the amendment we can think about it between now and Report stage.
Lord Wallace of Coslany: That seems to be quite a good idea, because it suddenly dawned on me that the Report stage will be next year, after the Christmas recess; but please do not make it too quick because we want to consider this very carefully. The noble Lord has made a fair offer and I accept what he has said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No.102:
Page 16, leave out lines 4 to 12 and insert—
(" "(a) where a local authority in whose care a child is has served and not withdrawn a contribution notice specifying a contribution calculated in accordance with section 46 of this Act. the local authority shall seek to reach an agreement with the contributor on the amount of the contribution;
(b) where, after a period of one month beginning on the day on which the contribution notice was given to the contributor, the local authority and the contributor have failed to agree on the amount of the contribution, or where an agreement was reached but the contributor has defaulted in making two or more of his contributions," ").
The noble Lord said: I beg to move Amendment No. 102 standing in the names of my noble friend and myself. This amendment is quite important because its purpose is to retain the period of one month in which parents and the local authority can try to reach agreement on charges. The Bill seeks to abolish this period of one month. The change in legislation proposed is designed to allow the local authority to assess the charge far more quickly and to recover arrears with less delay. It would certainly simplify the procedure for the local authority, but such a simplification, I suggest, would be at the expense of the user rather than being of benefit to him. Parents who did not understand the demands they received or had delayed making payments, or simply could not afford to pay, could find themselves back in court within weeks of their child being committed to care.
It is thought that local authorities should be encouraged to enter into partnership with parents, and as far as possible to share the caring. This spirit is far more likely to be fostered by a co-operative attitude towards establishing parental contributions than the punitive and distant approach this change seems likely to encourage. It may also lead to less and lower arrears. I think this a quite reasonable amendment. I hesitate to wonder whether there will be a technical hitch to it. I beg to move.
Lord Trefgarne: May I make the same proposal in respect of this amendment as I did in regard to the last one, and also, if it would help the noble Lord, in respect of the next one? Thus we can dispose of this group of amendments, to which I spoke in detail earlier.
Lord Wallace of Coslany: When the noble Lord says "the next one", does he mean No. 104?
Lord Trefgarne: No, No. 103.
Lord Wallace of Coslany: Yes, I beg the noble Lord's pardon. In view of what he has said, I beg leave to withdraw Amendment No. 102.
Amendment, by leave, withdrawn.
[Amendment No. 103 not moved.)
Clause 13 agreed to.
Clause 14 [Power of local authority to limit charge for residential accommodation to minimum rate:]
4.46 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 104:
Page 16, line 21, at end insert—
("( ) the following subsection shall be inserted after subsection (4) of section 22 (charges to be made for accommodation)—"(4A) Notwithstanding any other provisions of this section, where an authority is providing accommodation for a person who derives income from gainful employment, the authority shall disregard such proportion of his net earnings as is represented by the formula
5A/2+40/100(B-5A/2)
where A is the sum specified in subsection (4) above and B is his net earnings.";").
The noble Lord said: This amendment looks terribly complicated and confusing, but it is in fact an attempt to write into legislation a practice which local authorities already recommend for other client groups. I know that on the surface it is complex and very involved. The noble Baroness, Lady Masham, even went so far as to suggest—not in this Chamber but outside, some few days ago—that I should bring a blackboard and chalk into the Chamber for the benefit of your Lordships, but I have not done that.
There is a problem regarding the severely handicapped, many of them resident in homes, such as the Cheshire Homes, who, in spite of their handicap, achieve great distinction in various fields. I quote as an example, artists, one of them well known to me. These people can by their work earn quite a reasonable income, say £5,000 a year, or a little more. These earnings do not necessarily meet the full cost of their care, and in the case of a charity home the charity may need to subsidise the case. Today, with advanced technology, visions of a new world are dawning for the handicapped, and there is a likelihood of more very seriously handicapped young people who need residential care, through modern scientific advances having a potential capacity to earn substantial salaries. It is a fact that modern technology, coming forward as it has in the last few years, can offer this great advance for the handicapped. I would say, and I do not think anyone would disagree, that it is in the interests of us all to encourage them as much as we can. This amendment could help considerably. This is the incentive motive of which the Government preach so much.
As I say, I agree that the amendment appears complicated, but it is something that is carried out in practice. Its purpose is clear: to ensure a reasonable proportion of net earnings. I would say to the Minister that this is a very important issue regarding the severely disabled. It is purely a question of allowing
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them, if they have the incentive and ability developed through modern technology, to make a reasonably good living. We should be very concerned that we do not penalise them too much so far as the charge for their care is concerned.
I know that, on the surface, this looks a complicated formula. I say to the Minister quite sincerely that if he can provide a better, maybe simpler, but adequate answer, that would be very welcome indeed. I am, pointing out to the Committee this issue of people, such as mouth artists and others, who can earn quite a fair salary, and thank heavens! they are now in a position to do this. This is happening today. I beg to move.
Baroness Hornsby-Smith: There is another side to this issue. As the noble Lord, Lord Wallace of Coslany, knows, I have been associated with several charities in my time. Many of them quite specifically raise funds in order to help people in the charities' homes. Many of these people pay the economic rent where they are capable of paying it. If they are not capable of paying it they have a subsidised rate, and the subsidy is made up by the charity money which is nationally raised. I see a danger. If we are to say that there is a level at which a person is to be subsidised, regardless of what he earns, any astute board of a charity will say: "You apply for the subsidy and we will charge you the full economic rate and not give you the rate we would have done in accord and in concert with the income you now have." It would cut across quite a number of charities who specifically raise money to subsidise people who cannot pay the economic rate. If they know that it will be made up by the Government, and if we put the level at such a height that it is worth charging them the full economic rate, then quite a lot of contributions to the charity will not be applied for the purpose for which they were raised.
Lord Trefgarne: Although the Government accept the intention of the proposed amendment, we do not think that it is appropriate for this Bill. A measure to achieve an incentive is, however, already included in that part of the package of changes agreed between DHSS Ministers and the local authority associations which will be effected in regulations to be made next year. There are also technical difficulties in the amendment which I could go into if the noble Lord wishes me to. However, I hope that with this declar-tion of the Government's intent the noble Lord will seek leave to withdraw the amendment.
Lord Wallace of Coslany: That is fair enough. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Coslany Lord Wallace of Coslany moved Amendment No. 105:
Page 16, line 41, at end insent—
("( ) in Part III of Schedule 1 to the Supplementary Benefits Act 1976 for any reference to "£1,200" shall be substituted a reference to "£2,500".").
The noble Lord said: This amendment is quite simple. One of these days when I rise at the Box and say that an amendment is quite straightforward and

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simple, the Government will give me the shock of my life by accepting it. So far I have been unlucky.
This is a simple amendment. The change in the capital limit can, I accept, be done by regulations, but despite regular promptings from the AMA the DHSS has declined to change the figure of £1,200. The figure has remained the same since before 1976. The regular promptings have been made by the AMA, and the Government now have a glorious opportunity to meet them and to increase the figure, as suggested in the amendment.
Lord Trefgarne: The capital disregard of £1,200 is only one of the many factors taken into account in assessing a resident's ability to pay for Part III accommodation in accordance with Part III of Schedule I to the Supplementary Benefits Act 1976. Those provisions also governed the supplementary benefit system itself until November 1980; but then new regulations introduced a separate capital rule for supplementary benefit. The two rules are now of quite a different character. For supplementary benefit, the rule is a complete capital cut-off: with more than £2,500 of capital, no benefit at all is payable. For residential charging purposes. £1,200 is the starting point for assessment, with a tapering arrangement—based on assuming 25p a week of income for each £50 of capital above that level—so that the assessed ability to pay rises gradually and does not reach full payment unless a very much higher level of capital is held. Although historically it was the case that the same rules were applied for both purposes, there is, in fact, no very good reason why they should have been because the two purposes are entirely different. The supplementary benefit system is designed to provide a "safety net" of financial support for people looking after themselves. The residential care charging system, by contrast, is designed to reflect people's ability to contribute to care which is being provided for them.
When the Joint Working Group on Personal Social Services Charging Policies recommended that the capital disregard be reviewed, they also suggested that the tariff should be revalued. Both factors will be taken into account in the new regulations about Part III charging to be made next year, to which I have already referred. There are also technical difficulties which, again, I can describe to the noble Lord, but perhaps I can spare him them at this moment.
Lord Wallace of Coslany: In view of what the noble Lord said, and as there is again a technical hitch—I seem to be blessed by these—at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 [Recovery of sums due to local authority where persons in residential accommodation have disposed of assets]:
4.56 p.m.
Lord Trefgarne Lord Trefgarne moved Amendment No. 106.
Page 17, line 5, after ("asset") insert ("to which this section applies").
The noble Lord said: It may be of assistance to your Lordships to discuss at the same time Amendments Nos. 107, 111, 112 and 115.I hope that I see the noble Lord, Lord Wallace of Coslany, nodding in agreement. In any event, I see him nodding.
As part of the existing procedures for assessing a resident's ability to pay for Part III accommodation, local authorities already have powers to take into account the value of any assets of which the resident can be shown to have deliberately deprived himself with the intention of paying less than he would otherwise have been assessed to pay. But once the resident has disposed of his assets he will be unable to pay in full a charge assessed on the assumption that he still has them. In those circumstances, there is little point in taking legal proceedings against him and, in any event, local authorities who have accepted responsibility for providing care and attention for the resident are very reluctant to go to such lengths.
But authorities should have some way of recovering debts which may accrue as a consequence of a resident's failing to pay in full the assessed charge. The intention of this clause is to provide that facility and to assist an authority to recover debts arising from deliberate abandonment of assets. The clause therefore provides that the person or persons receiving the asset should be liable up to its value for any-consequential debt which the resident may incur with the authority. But it will be for the authority to decide when making the assessment of ability to pay under the charging regulations whether or not the circumstances are such that an asset which has been transferred should be taken into account as a deliberately abandoned resource. In reaching the agreement between DHSS Ministers and local authority associations, it was expressly intended that any provisions to assist recovery of debts would be used selectively and non-oppressively.
I should now like to turn to the specific amendments which the Government wish to incorporate in order more clearly to achieve the stated intentions. Amendment No. 106 is a paving amendment for the introduction of the new subsection contained in Amendment No. 111. The purpose of the new subsection is to ensure that the recovery provisions in Clause 15 apply only to those assets which are taken into account in the assessment of a resident's ability to pay for Part III accommodation. This strengthens the intention that the clause should provide a recourse for authorities only in those cases where there has been deliberate abandonment of assets by the resident with the intention to reduce the charge payable for his accommodation. Amendments Nos. 107, 112 and 115 are consequential on the other amendments. I beg to move.
Baroness Masham of Ilton: Where it states "any other assets", does this mean any little love trinket given away to a grandchild, a piece of furniture, or anything of that nature? In that case the clause is totally unworkable.
Lord Trefgarne: No, I do not think it means that. I do not have the reference in front of me, but it means the assets that are specifically assessable in

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determining charges payable for Part III accommodation.
Lord Kilmarnock: May I ask the exact scope of the phrase "deliberate abandonment"? That seems to be very wide open. I am merely asking for information. Is there any normally held view of what that means?
Lord Trefgarne: The most obvious example I can give to the noble Lord—this may also help the noble Baroness—is where an elderly person disposes of his house, for example to a relative or a friend, so that that is not taken into account, or so he imagines, in assessing his ability to pay the charges for the accommodation. That is the type of situation that we are seeking to control: the deliberate abandonment of an asset—disposal, in other words—for the purposes of avoiding paying these charges or of avoiding paying them at the highest level. Of course, in the imaginary circumstances that I have suggested, the house would be sold for nothing or next to nothing. That is the type of situation that we are proposing to control under this provision.
Baroness Jeger: I should like to ask another question because this seems to be giving a new meaning to the phrase "asset stripping" which is not usually associated with this type of care. An old person might well have some ancient furniture or possession which, because of the state of the antique market, turn out to be quite valuable. Supposing that old person bequeaths them to a relative or wishes, in his will, to bequeath those family goods to relatives, is the Minister saying that the relatives must be penalised or that the old person had no right to give away things which he specially wanted to keep in the family and which he would not want to sell for all kinds of reasons? If that is to be included under this clause then I think that it is unworkable and totally unjust.
Baroness Phillips: I should like to support my noble friends. Sitting here and listening to the debate, it all seems incredibly and horribly cold blooded. There are pressures already on people who do not understand what it is all about, and we should not add to them again. I could not understand the Minister's explanation about a house. A house is surely only an asset when it is sold; it could not be an asset if the old person were not actually living in it. That seemed to be a rather curious example to put forward. It is very important that there should be no pressure put on people when they are already in a very difficult position. In my view, this is giving the powers far too wide a definition. Some people will apply them in a generous way, others will not do so. This is a very disturbing part of the Bill.
5.3 p.m.
Lord Trefgarne: If your Lordships will look at Amendment No. 111, which is part of this group, your Lordships will see that further details of this matter are provided, in that direct reference is made to the provisions of the National Assistance Act 1948. But what we are here proposing is some kind of control over a circumstance where an elderly person deliber-
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ately divests himself of assets in order to avoid paying charges and passes them, for example, to a near relative simply to avoid paying the charges or receiving the full impact of the charges. I do not think that that is an unreasonable proposal, and I hope that your Lordships will agree with me about that.
As I have said, the local authority will have to be satisfied that the assets have been disposed of deliberately to avoid paying the charges. It has nothing to do with bequests by will, for example, to which some noble Lords made reference. The object is to see fairness between those who accept their responsibilities to meet their charges and pay their debts, and those who deliberately seek to avoid meeting these obligations. Any person who is properly assessed will, of course, have nothing to fear.
Baroness Darcy (de Knayth): Before we go any further with these amendments. I should like to ask the Minister two questions, because I was all for supporting the leaving out of Clause 15. I am delighted to hear that we are talking only about the deliberate abandonment of assets because I was going to ask the Minister how he felt about this matter. First, in the case of proving deliberate abandonment of assets, would the onus be on the local authority to prove the deliberate abandonment of assets? Secondly, I think that the Minister said that one of these amendments limited the matter to the deliberate abandonment of assets, but from reading the amendments I cannot see which it is. I do not know whether I misunderstood the noble Lord. If I did not misunderstand him, would it not be much better to put something into the Bill saying that it is limited to the case where a person knowingly and with the express intention of avoiding payment, disposes of these assets? It is very unclear and I do not know whether I have misunderstood the position.
Lord Trefgarne: That is the effect of the group of amendments which I have moved.
Baroness Darcy (de Knayth): But nowhere does it actually say that, does it?
Lord Trefgarne: I cannot immediately put my finger on the words, but I will in a moment if the noble Baroness will bear with me. I want to persist with the view that what we are really proposing here is a means of restraining people who are deliberately divesting themselves of their assets in order to avoid paying the charges and are doing so in a way which, in other circumstances, might be regarded as fraudulent. That is what we are seeking to control and I hope that your Lordships will agree that it is the right thing to do.
Baroness Masham of Ilton: I should like to ask the noble Lord, who is a highly intelligent person, how on earth do you prove it? If I had to go into residential care and I gave my grandchild—if I had one—a ring, how do you prove whether, I gave it deliberately or not?
Lord Lyell: Perhaps I can try to help the noble Baroness. If the ring is of value (and the noble Baroness does not need me to discuss whether or not it is of value) and if it is worth thousands of pounds or if, in

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the case which the noble Baroness, Lady Jeger, presented, some asset turns out to be of unknown value, then if the local authority decide that the action of the elderly person seems to them to be deliberate, they may take action. However, I ask the noble Baroness, Lady Masham, to ponder on whether she is beginning to make a large hill out of a tiny ring. The noble Baroness shakes her head, but when she says "value", is she thinking of thousands of pounds, hundreds of pounds or a few pounds? I am sure that the noble Baroness and, indeed, your Lordships would understand that when we are talking of assets here we are not thinking of enormous sums. Moreover, the second hoop through which the local authority have to jump, if I can use that phrase, in seeking to recover any charges from the elderly person, is that these assets have been knowingly and deliberately given away or otherwise disposed of. So there are two hoops: first, that there is considerable value; and secondly, that the assets have been deliberately disposed of.
Lord Kilmarnock: Will the noble Lord answer just one point? I take the point he made about the ring, but let us take the case of an elderly person moving into care who has, for example, a daughter or a niece who is just setting up house. If that elderly person gives to that daughter or niece some furniture to the value of, let us say, a few hundred pounds, is that considered to be the deliberate disposal of assets?
Lord Trefgarne: That seems to me not to fall within the ambit of these provisions because the purpose of that disposal was not deliberately to avoid having to pay the requisite charges.
Baroness Jeger: This seems to become more and more confusing. When I go into an old person's home I am going to give my car, for example, to my nephew. The noble Lord referred constantly to the word "deliberate". I shall deliberately give the car to my nephew. How is the court to prove that I did not give the car away in order that my assets would be reassessed and that I was only giving he car away to get out of paying the dues that could be levied on me? I can imagine that this will be a lawyer's paradise.
Lord Lyell: I do not know the value of the noble Baroness's car, but I certainly would not imagine that her motor car would fall into this ambit. Secondly, I think that the noble Baroness is misconstruing the word "deliberately". It is not a question of the noble Baroness deliberately giving the car away, but deliberately giving the car away with the intention of reducing her assets below the level which I think she will find in Section 22 of the National Assistance Act. As the noble Baroness will see—and I think that the noble Baroness, Lady Phillips, asked about this on Amendment No. 111—the whole of this section impinges.
Lord Trefgarne: Let me say at once that my noble friend is quite right. First, I want to put before your Lordships the general proposal that is contained in these measures. It is that, sadly, there are some people who find themselves wishing to go into Part III accommodation, as it is called, and who chose to do so
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at the maximum cost to the state and the minimum cost to themselves, despite the fact that they perhaps have at their disposal considerable assets. Therefore, at the last minute, before their assessment is to be carried out, they divest themselves of these assets for a song, or indeed for nothing, to one of their relatives or to one of their close friends in the expectation that they will then be assessed as unable to meet the charges to any substantial degree.
The local authority then has to decide whether a particular asset should be taken into account in assessing the resident. If that asset has been abandoned, the local authority must decide whether or not that abandonment has been done deliberately. If the resident or his representative disagrees, they can contest the assessment and, if need be, the matter can come before the courts. I do not suggest that that will happen very often—I hope it will not—but doubtless if a very large amount of money is at stake (for example, like the very valuable diamond solitaire ring of the noble Baroness, to which she referred a moment ago), then conceivably it will come before the courts and the courts can then decide whether it is an appropriate matter to be taken into account.
We are aiming to prevent people from deliberately defrauding—I can really use no other word—the local authority out of the proper charges which it would otherwise assess. I do not think that some of the difficulties which noble Lords and noble Baronesses have been imagining will appear in practice, and I hope they will agree that these proposals are reasonable.
Baroness Masham of Ilton: Before the noble Lord the Minister sits down, he referred to "considerable assets". However, the Bill says "any asset". I think that the Government will have to do better.
Lord Trefgarne: If the noble Baroness will again do me the honour of referring to the Marshalled List of Amendments, I would draw her attention particularly to Amendment No. 111, which gives more detail as to how the assets will be assessed.
Baroness Hornsby-Smith: Would my noble friend not agree that we would create anomalies if we were to ignore what are, in many cases, very substantial assets? It has long been an aim of many professional people to ensure that if their wife outlives them, she will have a good roof over her head. If we ignore someone who has a very fine house which he will never live in again—if we ignore that asset which may be worth a few thousand pounds or a very considerable sum—then we have an anomaly. On the other hand, there may be someone who, apart from the old-age pension, has a very modest private pension, say, a British Rail pension. That railway pension will be taken into account in assessing their ability to pay, and it may only be £4 or £5 a week. However, if we ignore assets, a woman whose house is worth £50,000 or £60,000 will not be assessed. Although I accept what the noble Baroness said, that we could perhaps do with greater definition as to the level at which assessment of assets starts, I think we should recognise that if we wipe out these hard, tangible assets, we shall create many anomalies that will be unfair to people who perhaps

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live in a council house, which they will give up and which is not an asset, but who have a small pension which is most certainly taken into account when assessing their ability to pay if it is on top of their old-age pension.
Baroness Darcy (de Knayth): Has the Minister been able to put his finger on the part of the Bill which says that we are only talking about deliberate avoidance? Is the phrase "deliberate avoidance" in the National Assistance Act? I am afraid that I have left my copy outside the Chamber.
Lord Trefgarne: In answer to the noble Baroness, Lady Masham, I referred earlier to the provisions of Amendment No.111, which is one of the amendments that we are now considering, which defines the assets to be taken into account as those defined in the National Assistance Act 1948.
Baroness Darcy (de Knayth): But does this also refer to "deliberate avoidance"?
Lord Trefgarne: As I said earlier—and I think that I have covered this point three times—the question of deliberate avoidance falls to be assessed by the local authority.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 107:
Page 17, line 9, after (" any ") insert (" such ")
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 108:
Page 17, line 15, leave out (" receiving the asset ") and insert (" to whom the asset is transferred by the person availing himself of the accommodation ")
The noble Lord said: This amendment is to ensure that the provisions of Clause 15 apply only to the persons to whom the resident transferred the asset in question. If those persons subsequently transfer the asset to others, their successors in title will not have to assume the liability for the debt of the resident. That liability will rest with the original transferees. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 109.
Page 17, line 15, leave out (" jointly and severally ")
The noble Lord said: It may be for your Lordships' convenience if, with this amendment, I deal also with Amendments Nos. 113 and 114. The amendment in line 15 is intended to ensure that, where assets have been transferred to more than one person, each of those persons, or donees, will be concurrently liable for a proportion of the resident's debt related to their respective share of the value of the transferred assets. It is intended that where one of several donees cannot be traced, his liability shall not be apportioned among the other donees.
The amendments to lines 28 and 31 strengthen this by referring to the "liability" of the donee rather than
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to "sums recoverable". But there has been no change of intention in so far as Clause 15 relates only to the recovery of sums due to a local authority. I beg to move Amendment No. 109.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 110:
Page 17, line 17, leave out first (" the "(and insert (" its ")
The noble Lord said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 111:
Page 17, line 20, at end insert—
(" (1 A) This section applies to cash and any other asset which falls to be taken into account for the purpose of assessing under section 22 of the National Assistance Act 1948 the ability to pay for the accommodation of the person availing himself of it.")
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 112:
Page 17, line 27, after ("asset") insert ("to which this section applies").
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 113:
Page 17, line 28, leave out ("sum recoverable from") and insert ("liability of).
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 114:
Page 17, line 31, leave out from beginning to ("exceed") in line 32 and insert ("a person's liability under this section shall not").
The noble Lord said: This amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Trefgarne Lord Trefgarne moved Amendment No. 115:
Page 17, line 34, at end insert ("to which this section applies, other than cash.").
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendment No. 116:
Page 17, line 42, leave out from ("incumbrance") to ("and") in line 43 and insert ("on the asset").
The noble Lord said: The purpose of this amendment is merely to ensure that there is appropriate recognition of any incumbrance on this asset, regardless of how it may be discharged by the person to whom the asset was transferred. It is fairly simple. I beg to move.
On Question, amendment agreed to.
On Question, Whether Clause 15, as amended, shall stand part of the Bill?
5.20 p.m.
Lord Wallace of Coslany: On behalf of my noble friend Lady Jeger, the noble Baroness, Lady Masham of Ilton, and myself I beg to move to leave out Clause 15. Those who have been present in the Chamber and

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have listened to the discussion and the doubts raised on the various amendments, will realise that there is a great deal of misunderstanding and difficulty with the administration of this clause. In my opinion, so far as this clause is concerned, the Government have got themselves in a right mess. We are approaching Christmas, and we all know Charles Dickens' famous book in which Scrooge appeared. At the moment the Government—not the Minister, because he is a nice chap—appear in the guise of Scrooge. Who knows? they may repent later.
This is a mean and vicious clause. The clause itself raises the cloud of suspicion on every old person entering an old people's home. "Has the old girl, or old boy, discharged the assets? How much are the assets worth?" Often some old people's ideas of the value of their assets is more or less glorified. I once had the possibility of receiving an ostrich egg in a glass case. That asset has now been disposed of. Some people thought it would be valued at thousands of pounds. It fetched £20, less commission. If the person concerned had been put in a home and I had received such an asset, I should no doubt have had to pay something on the £20. It is silly and stupid.
In any case, if assets are disposed of in this way, it reduces the assessment made on the individual. That is the purpose of it. Obviously, the authority could assess if the asset were in the individual's possession, but at the moment authorities have no power to put a charge on the persons who receive the asset. In civil law there are only two cases known where such charges can be made: under the Bankruptcy Act 1914 with a time limit of two years prior to bankruptcy, and the Matrimonial Causes Act 1973 with no time limit. Even with supplementary benefit there is no liability at the moment on other persons to whom an asset has been transferred.
What I object to very strongly indeed is the slur that it casts on all the old people entering a home, in the sense that it raises the suspicion, "Ah, what have they disposed of?" It means somebody going along and snooping into the home before the person leaves it, to find out what they have got and to value it. Just realise the ridiculous administrative problems and the injustices there will be. The noble Lord shakes his head, but this is a quite unprecedented move that the Government have taken in order to recover a few pounds from elderly persons.
Anybody would think by the way that the noble Baroness, Lady Hornsby-Smith, and others spoke on the value of property, that we are a nation of millionaires. As a matter of fact the majority of people in this country are not too well off at all, and that is not their fault. Well, it is their fault; they voted for the Government that put them in that position. However, I do not want to bring in political issues at this time of Christmas. The noble Lord really and truly has brought forward in a smooth manner—which is his custom—a clause which can only be regarded as something that ought to be removed at the earliest possible moment. I beg to move the deletion of Clause 15.
Lord Trefgarne: I hope that your Lordships will not agree to the deletion of this clause. I am not inclined to brush aside quite so readily as the noble Lord is the
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words of my noble friend Lady Hornsby-Smith. The fact is that there are very many old people who go into Part III accommodation, as my noble friend pointed out, who are rightly and properly assessed in accordance, for example, with some modest pension which they receive. Is it right, therefore, that those people who perhaps had a substantial asset in the form of a house—and many old people have a house; it is no good the noble Lord suggesting that that is not so—and who chose to divest themselves of that asset immediately before they came to be assessed, deliberately to ensure that they would not be charged at what would otherwise be an appropriate level, should escape scot free, which is really what happens at present and is what we propose to contain under the provisions of the Bill? This is greater justice, not less justice. I hope your Lordships will agree that the clause should stand.
Lord Davies of Leek: Would the noble Lord try to answer this case? The dear old gentleman, or old lady, who happened to own a house is penalised. But if my father were rich enough and he said to me, "Look, I am going to give you £30,000", and he lives for another five years, I would get that £30,000 without any taxation. In other words, what is sauce for the goose is sauce for the gander. It is a hotchpotch. It needs looking at again. It is unfair because there are class differences here.
Baroness Phillips: I too should like to comment on this clause. Since when was the gift of something described as deliberately divesting yourself of it? It is appallingly unchristian. Listening to this, we are back in the Dickensian period, when people went in fear. "I am now going to look very carefully"—
Lord Trefgarne: I wonder whether the noble Baroness would allow me to intervene? I shall tell the noble Baroness exactly when "deliberate abandonment", as the expression is, first came into parliamentary parlance. It was in the Supplementary Benefits Act 1976, paragraph 25 of Schedule 1 to that Act, passed in the time of the Government of the noble Baroness.
Lord Kilmarnock: As there seems to be considerable feeling about this in the Committee, would the noble Lord consider taking this clause away to see whether he could redraft it to take account of the points raised by the noble Baroness, Lady Hornsby-Smith?
Lord Trefgarne: I am afraid I could not agree to do that. This clause is an important part of the proposals we bring before your Lordships in this Bill. Its intention is to apply a greater degree of justice to the people whom it will affect, not less justice. I hope your Lordships will agree to include it.
Baroness Masham of Ilton: I added my name to that of the noble Lord, Lord Wallace of Coslany, and the noble Baroness, Lady Jeger, because I felt that this was an unworkable clause. I feel that it must have been drafted by lawyers who had many out of work lawyer friends. When other people try to interpret this Bill when it becomes an Act, out in a local authority I do not think that they will approach it in the same spirit as the Minister has today. That is what we have to be sure about. Noble Lords and noble Baronesses from all

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over the place are worried. My noble friend sitting next to me is about to speak because she has not had her important question answered by the noble Lord the Minister. If the Minister does not understand it, how on earth can somebody in a local authority understand it? What I am very worried about—and have been ever since I saw it written down—is the phrase "any other asset" because it will not be interpreted in the way the Minister wants it interpreted. I say that because I know some people in some local authorities—not all, but some—and some are much meaner than others.
Baroness Darcy (de Knayth): As my noble friend Lady Masham said, I was about to speak, I had better speak now. The Minister has been saying that the clue lies in Section 22 of the National Assistance Act and, having been through all eight subsections of that provision, I can find nothing about deliberate dodging, as the noble Lord, Lord Wallace, put it. Subsection (5) refers to Schedule 2, which, being four pages long, I have not had an opportunity to digest, but I see no mention of deliberate avoidance. I appreciate that it may, to a certain extent, answer the point raised by Lady Masham, but as the provisions refers to ten shillings and six pence, it may be rather obsolete, anyway. If the Minister has a better grasp of Section 22 and Schedule 2 than I have, perhaps he would be prepared to explain it a little more thoroughly.
Lord Trefgarne: With respect to the noble Baroness, she is terribly confused over this. That does not surprise me because this a confusing matter. As for "deliberate abandonment", when referring to the National Assistance Act 1948 I was answering her about the type of assets that were to be taken into account.
Baroness Darcy (de Knayth): I think he was answering my noble friend. I asked twice about deliberate avoidance. I did not ask about assets. The Minister told me at that stage that he had already answered my question three times by reference to Section 22.
Lord Trefgarne: That was not what I said, with respect, and if she looks at the record tomorrow she will see that I said something different.
Baroness Darcy (de Knayth): I apologise if I am wrong and I will read Hansard tomorrow.
Lord Trefgarne: I said to the noble Baroness, Lady Phillips, that there was a precise definition of "deliberate abandonment" in Schedule 1(25) to the Supplementary Benefits Act 1976.
Lord Banks: When speaking earlier, the Minister referred to somebody who effected a transfer of this kind at the last minute, but of course the last minute covers the previous six months, to the date of actually going into accommodation. I believe it has become clear from our recent discussion that there is nothing in the clause—and I do not think there is anything referred to by the clause—which contains a reference to this being carried out deliberately. It seems that anybody who makes a transfer within the previous six
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months is caught. One may say that the local authority need not necessarily apply the provision, but they may well do so. So anybody who makes a transfer, deliberately or innocently, is, it would seem, liable.
Baroness Robson of Kiddington: I am inclined to support the amendment, but I must ask a question which arose in my mind as a result of the comments of the noble Baroness, Lady Hornsby-Smith. She drew a comparison between someone living in a council house and someone living in a £50,000 house and said it was not fair that their contributions should not be different, because one would be better off than the other. Not everybody lives in a £50,000 house, even though people may own the house in which they are living.
Say an elderly person is living in a council house and has members of the family living there. Say another person own a little house, which is not worth £50,000, and also has members of the family living there. Before going into Part III accommodation or into an old persons' home, ownership of the house is transferred to the family so that they will have the same security, because the local authority are likely to transfer the tenancy to other members of the family, or could do so. If that person transfers the ownership of the house to the members of the family who are living with him, then when he is assessed, having moved into the local authority accommodation, will he be assessed on the complete value of the house or on just the rent that will be payable? It is important. One could be penalising the person who has saved enough money to buy a house much more than the family of the person living in a council house.
Lord Trefgarne: The noble Baroness pose a perfectly proper question, but I would want to study what she said and consider precisely the implications of the example she gave before offering a definitive answer. I rest on the basic assertion which I have put before your Lordships several times: that we are seeking to deal here with deliberate abandonment as defined in the statutes. I now have before me the Supplementary Benefits Act 1976, and from its appearance the Committee will understand why it is not my everyday bedside reading. Paragraph 28 of the provision to which I referred says:
"If a person has deprived himself of any resources for the purposes of securing supplementary' benefit, or increasing the amount of any such benefit, these resources may be taken into account as if they were still his".
That was the reference I made to the noble Baroness, Lady Phillips, and, indeed, for the noble Baroness, Lady Darcy (de Knayth).
Lord Winstanley: Is it not a fact that the Government have set up an inquiry into the working of that provision of the supplementary benefits rule which the Minister quoted because, in the view of the Government, it is not working fairly?
Lord Trefgarne: The noble Lord bowls a fast one at me and I believe he is correct. However, it does not depart from the principle enshrined in the statute. It certainly does not depart from the principle of the proposal that I put before the Committee, which, as I

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have said time and again in this short debate, is designed to enhance justice towards those to whom the provision applied and not to detract from it.
5.37 p.m.
On Question, Whether Clause 15, as amended, shall stand part of the Bill?
Their Lordships divided: Content, 78; Not-Content, 69.
Resolved in the affirmative, and Motion agreed to accordingly.
Clauses 16 to 19 agreed to.
Schedule 8 [Social security adjudications]:
5.46 p.m.
Lord Trefgarne Lord Trefgarne moved Amendment No. 117:
Page 60, line 18, at end insert—
("(3A) Without prejudice to the generality of sub-paragraph (3)(a) above the enactments specified in Parts II to V of this Schedule shall have effect subject to the amendments there specified.")
The noble Lord said: This is a drafting amendment. I beg to move.
Lord Banks Lord Banks moved Amendment No. 118:
Page 60, line 28, at end insert—
("Sufficient number of adjudication officers shall be appointed by the Secretary of State to ensure that claims are dealt with so far as practicable within fourteen days and where a claim is urgent forthwith.")
The noble Lord said: This amendment, which I beg to move, would place the Secretary of State under a duty to appoint sufficient numbers of staff to ensure that claims are dealt with, as currently required, within 14 days. Further, the duty would extend to there being sufficient numbers of staff to deal with urgent cases immediately. Staffing levels, in particular in relation to supplementary benefit, are giving serious cause for concern. A number of offices in Birmingham and elsewhere are shut, due to industrial action over staffing levels. In a recent case a claimant in urgent need was refused an appointment for some days. An inquirer on his behalf was told, "We can see only so many immediates". In Oxford—an office currently closed by industrial action—the numbers of claimants has risen from 16,599 in August 1981, to 19,113 in August 1982, but staffing levels have remained constant at 146.
The increasing emphasis on fraud work may mean that the numbers of staff dealing with the routine administration of claims has dropped at a time when the numbers on supplementary benefit have risen considerably, from just under 3 million in July 1979, to just under 4 million at the end of 1981—a figure that has since increased. Overall staffing levels in Department of Health and Social Security offices have dropped between June 1979 and July 1982, from 63,367 to 62,145. There could be no objection to a reduction in the numbers if it could be shown that the staff could cope, but that does not appear to be the case in the face of the very considerable increase in the numbers of people requiring supplementary benefit. I beg to move.
Lord Trefgarne: With the permission of the Committee, I should like to speak at the same time to this amendment and to Amendment No. 147, in the name of the noble Lord, which I think addresses the same point. Section 99(1) of the Social Security Act 1975, and Regulation 2(3) of the Supplementary Benefit (Determination of Questions) Regulations already require insurance officers and supplementary benefit officers respectively to dispose of claims and questions within 14 days, so far as is practicable. While there is no equivalent special provision for urgent needs payments, it is accepted that such payments should be decided as quickly as possible, and there is provision to make interim payments in certain circumstances.
I believe that these provisions are sufficient. Nearly all claims are determined within 14 days of submission to an adjudication officer, and the vast majority are determined within 14 days of the date of claim. Where delays occur in dealing with claims, this is very rarely because of delays by adjudication officers in reaching a decision. Rather, it is because of delays in obtaining evidence relevant to a claim. For example, the claimant may have to obtain additional documentation or there may be delays in arranging interviews or visits.
For these reasons, I do not believe that it is either necessary or appropriate to include these amending provisions. If there were frequent and continuing delays in deciding claims to a benefit which exceeded the statutory period, it would be for the Secretary of State to consider what remedial action to take, including, where appropriate, the appointment of additional adjudication officers.
The noble Lord has referred to certain local problems that exist at present because of industrial action within the national social security office system. Naturally, we greatly regret this industrial action. We are doing our best to mitigate its worst effects by authorising interim payments and by other means. I am not sure that passing legislation such as this would make any particular difference to the situation in the face of industrial action, but I think the noble Lord was addressing himself to what he saw as the cause of the industrial action. That is another matter, and not something which I think we could settle by way of legislation.
The Government are not satisfied, naturally, that the industrial action is properly founded, or else we would have acceded to the claims—which we do not propose to do. I think that we need to divorce the position of the local difficulties to which I have referred from the more general position to which the noble Lord addresses himself in his amendment. In the light of the general explanation that I have given, I hope he will see fit not to press his amendment.
Lord Banks: I think that possibly the noble Lord the Minister is a little complacent about staffing levels at the present time. We cannot ignore the fact that the industrial dispute in Birmingham centres round the question of whether or not they are facing an intolerable burden now that the numbers on supplementary benefit have so greatly increased. However, I would
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not want to press this point further this evening, and at the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Banks Lord Banks moved Amendment No. 119:
Page 60, line 41, at end insert—
("The Chief Adjudication Officer shall report annually in writing to the Secretary of State on the standards of adjudication and the Secretary of State shall publish his report.").
The noble Lord said: I beg to move Amendment No. 119. There have been grave doubts expressed on the quality of adjudication, particularly in relation to supplementary benefits. This amendment recognises that by requiring that there shall be an annual report by the chief adjudication officer which will be published by the Secretary of State. The Child Poverty Action Group have been monitoring the new supplementary benefits scheme since it was introduced in November 1980, and in their preliminary findings, written after four weeks, three months and six months, as well as in their final report which is due shortly to appear, the low quality of administration has remained a major problem in the new scheme, as it was under the old. The object here is to keep that under constant review to see what the standards are, and to see how they can be improved.
Lord Trefgarne: Ministers are often criticised for commissioning too many reports and letting them gather dust in dark pigeon-holes. We should be careful before imposing upon Ministers yet another duty and burden in considering annually another substantial report. But, more seriously, I am certain that we should be careful, too, about imposing on the chief adjudicating officer the further duty of preparing an annual report.
Under the provisions of the Bill the chief adjudication officer will be required to provide advice to adjudicating officers and to keep under review the operation of the adjudication system. In the early years he will be responsible for setting up the new system of initial, unified adjudication and ensuring that it is running smoothly. His most important role will be providing clear and comprehensive guidance to adjudicating officers. He may report his findings on the adjudication system to the Secretary of State if he considers that necessary. I do not think it will be helpful to impose a further duty on him, requiring him to produce an annual report. I doubt if such a report will be either necessary or useful once the system is running smoothly. The whole point of the changes that we are making in adjudication is to ensure that the system runs smoothly.
Lord Banks: Again, I wonder whether there is not perhaps a certain element of complacency with regard to the quality of adjudication on the part of the noble Lord; but, again, I would not want to press the matter further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Banks Lord Banks moved Amendment No. 120:
Page 60, line 44, leave out ("The members") and insert ("One member").
The noble Lord said: I should like to move Amendment No. 120 and, with permission, to speak

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also to Amendments Nos. 122 and 132. These three amendments would ensure that tribunals would still have to include one member who was a representative of employed earners. A panel would be constituted, for membership of which recommendations would come from bodies representing employed earners. No doubt the recommendations would come, among other sources, from the trade unions; and from that panel a member would be appointed to the tribunal. I think it is important that employed earners should not feel that their general interest is not represented within the membership of the tribunal. They should not feel, however erroneously, that bosses and bureaucrats were ganging up against them. I beg to move.
Lord Wallace of Coslany: I should like to support the noble Lord, Lord Banks, on this. We support all his amendments. It was a question of two great minds thinking alike; and he got there first. If the Committee accepts that explanation, good luck to them! The point I want to make is that the noble Lord, Lord Banks, referred to a member of a trade union. In fact, the TUC are very concerned about the Government's proposals. They feel that the decision seems to mean that the trade union movement loses the right to nominate one member of the tribunal. The TUC say that, over the years, trade unions have tightened up their procedures and have produced good quality people. If the panel is to be opened up, what group are they going to be opened up to? I think that the TUC, who have provided excellent people on various committees—national health committees and many others—and who are a responsible body, should have some degree of representation. I should like to support the amendment.
Lord Trefgarne: These three amendments would restore the present position on appointment of tribunal members, under which one member of both NILTs and SBATs is drawn from a panel representing employees. The intention of the change we are proposing in the Bill is to retain existing arrangements for nomination but to broaden the base to include not only representatives of work people and employers but of other groups as well, such as the disabled and single parents. Claimants are, of course, drawn from a wide spectrum, and we consider it desirable that committees or organisations which represent them also should have an opportunity to nominate members. Trade unions will still be invited to nominate members, but they will not retain their existing monopoly on nominations of one of the members. The Council on Tribunals has welcomed the change we are proposing. I hope the noble Lord will not press his amendments.
Lord Banks: This is an important point. I appreciate what the noble Lord has said about extending the membership of a tribunal more widely so that it includes people who are not at the present moment specifically included, but I do not think that that should be done at the expense of someone who represents the employees. Otherwise, there may well be a danger that employees will think that the tribunal is loaded against them. For that reason, I should like to test the opinion of the Committee on this particular amendment.
6.1 p.m.
On Question, Whether the said amendment (No. 120) shall be agreed to?
Their Lordships divided: Contents, 60; Not-Contents, 80.

DIVISION NO. 4

CONTENTS

Ardwick, L.

Kagan, L.

Aylestone, L.

Kaldor, L.

Balogh, L.

Kilmarnock, L.

Banks, L.

Listowel, E.

Birk, B.

Llewelyn-Davies of Hastoe, B.

Bishopston, L. [teller.]

Lloyd of Hampstead, L.

Blyton, L.

MacLeod of Fuinary, L.

Brimelow, L.

Mayhew, L.

Brockway, L.

Mishcon, L.

Caradon, L.

Molloy, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Peart, L.

Cooper of Stockton Heath, L.

Phillips, B.

Davies of Leek, L.

Ponsonby of Shulbrede, L.

Davies of Penrhys, L.

Rhodes, L.

Diamond, L.

Robson of Kiddington, B.

Elwyn-Jones, L.

Sefton of Garston, L.

Ewart-Biggs, B.

Stedman, B.

Foot, L.

Stewart of Alvechurch, B.

Gaitskell, B.

Stewart of Fulham, L.

Gladwyn, L.

Stone, L.

Gregson, L.

Taylor of Gryfe, L.

Hale, L.

Taylor of Mansfield, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wallace of Coslany, L.

Hatch of Lusby, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

White, B.

Jeger, B.

Wigoder, L.

Jenkins of Putney, L.

Winstanley, L. [Teller.]

John-Mackie, L.

Wootton of Abinger, B.

NOT-CONTENTS

Airey of Abingdon, B.

Lindsey and Abingdon, E.

Avon, E.

Long, V.

Bellwin, L.

Loudoun, C.

Beloff, L.

Lucas of Chilworth, L.

Boardman, L.

Luke, L.

Brougham and Vaux, L.

Lyell, L.

Cathcart, E.

MacLeod of Borve, B.

Cockfield, L,

Mancroft, L.

Coleraine, L.

Margadale, L.

Colwyn, L.

Marley, L.

Craigavon, V.

Masham of Ilton, B.

Cullen of Ashnourne, L.

Massereene and Ferrard, V.

Daventry, V.

Merrivale, L.

Denham, L. [Teller.]

Mersey, V.

Dilhorne, V.

Mottistone, L.

Drumalbyn, L.

Mowbray and Stourton, L.

Eccles, V.

Napier and Ettrick, L.

Elliot of Harwood, B.

Newall, L.

Elton, L.

Nugent of Guildford, L.

Erroll, E.

Orkney, E.

Faithfull, B.

Orr-Ewing, L.

Fortescue, E.

Plummer of St. Marylebone, L.

Fraser of Kilmorack, L.

Renton, L.

Gibson-Watt, L.

Romney, E.

Glenarthur, L.

St. Davids, V.

Hailsham of Saint Marylebone, L.

Saint Oswald, L.

Salisbury, M.

Hatherton, L.

Sandford, L.

Holderness, L.

Skelmersdale, L.

Hornsby-Smith, B.

Soames, L.

Hylton-Foster, B.

Somers, L.

Kinloss, Ly.

Strathcona and Mount Royal, L.

Kinnaird, L.

Lane-Fox, B.

Strathspey, L.

Lauderdale, E.

Sudeley, L.

415

Swansea, L.

Vaux of Harrowden, L.

Swinfen, L.

Vickers, B.

Swinton, E. [Teller.]

Vivian, L.

Terrington, L.

Wakefield of Kendal, L.

Teynham, L.

Wynford, L.

Trefgarne, L.

Young, B.

On Question, Motion agreed to.

Lord Denham: I think it was agreed that at this time we should adjourn the Committee stage and move on to the next business. I beg to move that the House do now resume.
Moved, That the House do now resume.—(Lord Denham.)
House resumed.

ECC 17th Report: Internal Market
6.10 p.m.
Lord Greenhill of Harrow Lord Greenhill of Harrow rose to move, That this House takes note of the Report of the European Communities Committee on the internal market (17th Report, 1981–82, H.L. 204).
The noble Lord said: My Lords, the committee are grateful to the House for making time available to debate this report on the internal market. We are also very grateful to those noble Lords who have volunteered to speak at what is a most inconvenient time. Several months have passed since the publication of the report—indeed, it is almost six months. During this time, the international trade situation has deteriorated seriously. We have had a basically unsatisfactory meeting of the GATT, despite the Government's very sincere efforts; and the results of the Copenhagen Summit must be a matter for conjecture. At that summit, the leaders called firmly for agreement on fundamental developments in the internal market. They asked for agreement by March of next year. Frankly, it seems to me that that is very unrealistic; but it is against this background that our discussion takes place this evening.
The sub-committee had a good deal of difficulty with this report. Like other bodies that we know, we had our share of "wets" and "drys". We found it very difficult to come to clear-cut and agreed conclusions, in spite of the great help that we received from our adviser from the Centre of European Studies at the University of Sussex. The centre carries on continuously valuable work in this field. Finally, we settled for concluding paragraphs which we described as the overall picture. In my personal view, the overall picture is a disappointingly sombre affair but others may see glimpes of light in it. The whole subject of the internal market is extremely complex, as the voluminous evidence attached to the report clearly shows. We decided to deal with one comparatively narrow but representative aspect of it, namely, the movement of manufactured goods across frontiers within the Community.
Members of the House will recall that one of the prime objectives of the founders of the European Community was to create a single domestic market,
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and from this they anticipated would flow notable political and economic advantages. Our report shows, in the limited area we have chosen, how far this has been achieved. It is thus an important indication of the progress to date of the Community as a whole. I do not believe that we could fairly draw anything but a negative conclusion. The inescapable fact is that the political will necessary for the establishment of a real, internal market whatever its merits (and they must be good merits) is still wanting. The events of the last few months will have done nothing to increase that.
In a document issued last month, the Commission acknowledged that almost no progress had been made in the last year or so since the beginning of Commissioner Narjes' energetic internal market campaign. The Copenhagen Summit reflects the Council's dissatisfaction with this state of affairs. Maybe events have brought about a change of heart but, as I see it at the moment, the primacy of the national state remains largely unchallenged and, despite the rhetoric of statesmen and the dedicated work of the Commission, the integrated Community market looks a long way off. As the Commission say, the Council's present indecision contrasts with the proliferation of measures taken in self-protection by national authorities. For there are a surprising array of instruments in the hands of EEC member states, with only ineffective sanctions against their abuse, that permit Governments to frustrate the growth of intra-EEC trade and to apply protectionism within the Community if they so wish.
Some of the origins of this lie in the lack of progress of the EEC programme of technical harmonisation and the associated fact that non-tariff commercial policy remains fairly in the hands of national Governments. They often act in independent ways, especially against third countries, and so effectively fragment the internal market. Perhaps the surprising thing is that these national instruments are on the whole not being used actually to curb existing trade but rather to prevent its expansion.
Members of the House will be aware of the long list of mutual complaints by member states about particular barriers to trade erected against each other, but our report refers especially to the unpredictability of the barriers to trade, and it is this which apparently deters and discourages United Kingdom manufacturers from exploiting the full possibilities of even the existing market. My own feeling is that ultimately it will be the initiatives of industry itself rather than of Governments or of the Commission which will be the decisive factor in the growth of the internal market.
There are some signs that the strongly nationalistic attitudes of some, but not all, European industries are weakening in the face of United States and Japanese technological advance, and that the need for European survival of certain industries will bring them together. The Commission has begun to realise that this could be fostered by differentiating between Community and third country products. But we must not forget that the alternative attraction of association with United States and Japanese high technology partners will inevitably be a distracting influence. I acknowledge that what I have said may be falsified by the Copenhagen decision. It may be that member states will swallow their national rivalries and effectively "gang up" against all comers, but one might be forgiven for being sceptical.
I do not mean to imply by what I have said that no progress at all is being made towards an integrated internal market in any important area, and especially in the area which we have chosen to report upon. A lot of people, both official and unofficial, have been working hard, with a fair measure of success, and the evidence attached to the report reveals this. For example, in sensible and practical ways the systems for processing imports and exports at Community frontiers are being improved. Her Majesty's Customs told us that about half of all exports from this country are now being undertaken with simplified concessionary procedures, and members of the committee were able to see this on the spot at Dover, where they also saw the new computerised entry system. But there is not the reduction in frontier delays, and therefore of frontier costs, which might have been expected and, sadly, good reasons still remain for these delays, such as health reasons and reasons of security.
As the recent White Paper showed, there is greater awareness than ever before of the need for the acceptance and use of internationally agreed standards as a guarantee of quality. The committee heard about a very large number of specialised groups, including, from this country, the representatives of the British Standards Institution. We concluded that their work in the European, and, even more, in the international, field should be given the maximum encouragement. A similar role is played by SITPRO, the British organisation for simplifying trade procedure. Their enthusiasm and zeal has led to the creation of sister bodies in many other member states, and these bodies ginger their Governments and the Commission into action.
Finally, the courts are increasingly active in enforcing the right to trade freely throughout the Community. The European Court itself looks at cases brought by the Commission against member states which, they allege, have introduced illegal protectionist measures. The Cassis de Dijon decision, which is set out fully in the report, could have a far-reaching effect in creating a single internal market. But the significance of this European Court ruling has still to be fully tested.
The Times reported a couple of weeks ago that there were a large number of cases outstanding in the European Court—40 against France, 28 against Italy, 17 against Germany, and so on. There are relatively few—as a matter of fact, nine only—against the United Kingdom, but we should not forget the political antagonism that even a few cases can cause. We have heard recently in the House of the problems of the whisky trade. There has been much press comment about the import of cars from Europe. I can see no solution to either dilemma. National courts are also involved. Individual firms can challenge the legality of national protectionist regulations and, despite the costs and delays, more of them now do so. But formidable obstacles in these and other areas remain.
In particular, the report draws attention to the anomalies in the transport systems of the Community. Others, again, are the obstacles which are inevitably tied up with a system in which the collection of tax remains at national level. Some countries, for example, collect VAT on imports immediately, and others on a deferred basis. This leads to complications
418
and delays and, once again, the tenacity of national views prevents reform.
The even more fundamental obstacle to completely free trade is, of course, the lack of a single Community currency and the rate distortions to trade caused by volatile exchange rates. This was not an aspect which we looked at in detail, and the new inquiry by the Select Committee on the EMS will doubtless do so. But it reminds us all how formidable and radical are the problems ahead, and, maybe, the debate later this week on the Motion of the noble Lord, Lord Lever, will give some guidance.
Finally, it is only by a general understanding by individuals, firms and Governments of the advantages to be gained from an integrated Community market that the political will which is needed to achieve it will be created. But the committee concluded that this political will is largely absent at the moment. One might be forgiven for believing that it is beyond the reach of this generation. Others may consider that patience and persistence will enable the original hopes of the Community to be attained much sooner. Maybe the Minister can encourage us. My Lords, I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on the Internal Market.—(Lord Greenhill of Harrow.)
6.25 p.m.
Lord Kaldor: My Lords, the noble Lord, Lord Greenhill of Harrow, and his committee are to be congratulated on producing a lively and highly informative report on what the Common Market means in terms of free trade and unhindered competition in manufactured goods inside the Community. We are also grateful to him for arranging this debate today, and for giving us a brief account of what has happened in the four or five months since his report was published.
For most people, the Common Market is a customs union within which, to quote the words of the White Paper of July, 1971,
"there is a single, permanent, assured and greatly enlarged market".
in much the same sense in which the United States or the United Kingdom form a single market protected by a customs frontier at their border. But, as the present report shows, so far as manufactured goods are concerned, the so-called "internal market" of the EEC is nothing of the sort; and the purpose of this report is to explain, as concisely as possible, why it is not. Indeed, on reading the report, one is bound to conclude that the Common Market could best be characterised as a preferential trading system, where goods originating in one member state are treated more favourably by another member state than goods originating in non-member states, but not nearly as favourably as goods produced within the importing country itself.
In this sense, the common internal market resembles the preferential system of the British Commonwealth, as it existed after the Ottawa agreement. Indeed, in some ways that system represented, in its heyday, a more genuine effort of economic co-operation than the EEC as it actually developed, though it did not employ such dramatic

419
language or labels, nor did it proliferate an enormous bureaucracy and a common parliament, with large expense accounts but with very limited powers. The Ottawa agreement meant that members accorded to each other preferential treatment, by way of remission of duties of 10 per cent. ad valorem; and that there was free trade in agricultural goods, and a fixed levy of 10 per cent. for agricultural goods imported from outside. With one exception, members were part of a common currency system, the sterling area, which meant that relative exchange rates were fixed, and control of currency and capital movements between members was virtually non-existent.
The EEC can boast of a common agricultural policy which is an extremely costly instrument, not for the promotion of competition between producers in different member states, but in order to prevent such competition from taking place, by making it impossible, or uneconomic, to drive out high-cost producers in one part of the Community by low-cost producers in another. The common agricultural policy was designed to create uniform prices throughout the Community in staple agricultural goods and, while uniform prices are sometimes the result of free competition, it is not true the other way around. You can have uniform prices without there being any competition, and this is what the CAP was really aiming at. This is brought about by means of market intervention in all local markets, which ensures that local prices conform everywhere to the fixed Community price. So the uniform price is not the outcome of competition between high-cost and low-cost producers, but of the introduction of a purchasing system which makes such competition unnecessary.
In the case of manufactured goods, with which the present report is concerned, the situation is totally different. Here, uniform prices were expected to result from the unhindered movement of goods, just as water tends to find an equal level in a series of interconnected tanks. The present report enumerates a number of different reasons why nothing of the kind has resulted from the adoption of a common external tariff and the abolition of import duties between member states and their EFTA associates.
The report identifies a series of obstacles to the attainment of a truly common market. One is formed by the very existence of border controls which can be highly vexatious and time-consuming, and which tend to delay and in many cases prevent altogether the passage of goods across the borders. Such prohibitions can arise owing to differences in the required specification of goods, whether technical or otherwise, in different countries, some of which—though by no means all—were rendered illegal by the Cassis de Dijon judgment of the European court to which the noble Lord, Lord Greenhill of Harrow, has just referred. As he said, however, it is by no means certain how much weight will ultimately be given to it.
Another obstacle takes the form of lengthy procedures of verification, causing costly delays or the filling up of endless complicated forms required for one purpose or another, such as the repayment of VAT in the exporting country and its reimposition, normally at different rates, in the importing country. There are also unwritten obstacles to free trade due to
420
the preferences in procurements accorded to home suppliers by private firms or by Governments and public agencies. In some fields, such as equipment for electricity generation or distribution, or telecommunication equipment, intra-Community trade is virtually non-existent because the purchasers in each member country deal only with producers of that country, to the exclusion of others.
However, in my view none of these factors is sufficient in itself to explain why there is so little economic integration in Europe as compared with a truly integrated economy such as the United States or, for that matter, the United Kingdom. One kind of evidence for this is provided by figures showing how much of the manufactured goods produced in any one country are consumed within that country as against others. An OECD study, published some years ago, showed that in engineering goods each major producing country of the EEC reserves the great bulk of its output—80 to 90 per cent.—for use within that country, with only a relatively small proportion being exported or imported. As against that, if you take the great centres of engineering production in the United States, like the State of Michigan or the State of New York, the greater part of the output produced there is destined for other states; and correspondingly, much the greater part of local requirements are imported from other states. In fact, how much of your total use comes from within one country and how much is destined for other countries I consider to be the best test of the degree of economic integration.
Other evidence for the absence of integration on which the present report lays some stress is the existence of large price differences between the different countries inside the Common Market which could not exist if there were genuinely free competition. The most conspicuous example of this, which received a lot of publicity recently, is the difference in the prices of motor-cars of identical makes and models sold in different member states, which can account for as much as 20 or even 30 per cent., after making due allowance for differences in taxation and transport costs. You can buy a Ford, or a BL car, or a foreign car made for the United Kingdom market and carrying the United Kingdom type approval certificate, for 20 or 30 per cent. less in Belgium or in Paris than in London.
I think the explanation for this, which is not given in the report—not even in the written evidence submitted by the Ford Motor Company which is printed at the end of the report and which devotes a lot of space to this particular subject of prices—is that the competition between car makers is of the special kind which economists call "oligopoly with price leadership". This arises when the number of producers is relatively few. So the individual producer has only a limited market which, however, is highly sensitive to the prices charged by others. You cannot sell more than a certain amount, but whether or not you can sell it depends very much upon whether your price is in line with the price of other cars. In those circumstances, one of the producers—normally the producer with the lowest cost or with the highest share of the market; the two criteria often coincide but not invariably—assumes the role of price leader, and determines not only the prices of his own makes but,

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with differences due to quality and so on, the prices charged by other producers. I believe that there is an understanding among the world's producers (probably an unwritten understanding but certainly an unpublished one) and this is a necessary supposition for explaining what actually happens, that in each particular market the price leader should always be a local producer and not a foreign producer, even though the foreign producer could easily assume that role owing to his comparatively low costs. This means that a low-cost foreign producer—say a Japanese or a French producer—will not undercut the local price leader. A Renault of the same model sells in Britain at 30 per cent. more than it sells at in France, because otherwise it would be undercutting Ford, and it is not going to undercut Ford because of the understanding that you leave the role of price leader to the local price leader and do not try to wrest it from him—for, I suppose, good political and commercial reasons in the long run.
This, to my mind, is the real explanation of why it is that you can buy all kinds of cars, always competitive with one another in regard to price, but different in each producing country—different in Belgium from France, different in Germany from Belgium and from Britain, and so on. The fact that prices are much the highest in Britain is nothing but a reflection that it is our currency which is overvalued in relation to all the other currencies. The report also reveals that relative prices show large differences between member countries. The prices for men's clothing are the cheapest in London while the prices of household appliances are cheapest in Amsterdam.
Finally, there are some fields in which the Common Market means nothing at all. This, I believe, is the case in pharmaceuticals. If you go to a chemist or a pharmacy in London, Paris or Rome you will find that in each place the products offered are different. Very often their names are quite different. They have little books which show that some product, which goes by such-and-such a name in England, goes by some other name in France, Italy and elsewhere. But in all cases they are products manufactured in that particular country, even if in a few cases they carry a common brand name. For example, Bayer's aspirin is a world famous mark, but Bayer's aspirin is produced in France, Britain and Italy, as well as in Germany.
It is evident from the tone of the report that the authors consider that the prevailing situation is highly unsatisfactory, not only on account of numerous legal obstacles but, as the noble Lord, Lord Greenhill of Harrow, has emphasised today, owing to the uncertainty of the situation in respect of that which is permitted and that which is not permitted—as well as on account of the spirit or manner in which they are administered, which shows a desire to minimise the effect of a common customs area by administrative action. This is a game in which Britain is at a comparative disadvantage. British officials are not very good at being vexatious or devious and are comparatively ignorant in the ways of operating a "dirty tricks department". I cannot imagine Her Majesty's Customs and Excise opening a small customs office in, say, Crewe or Corby, which is designated as the sole place for the importation of video cassettes into this country—a role assumed, according to newspaper
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reports, by the small customs office at Poitiers.
On 1st January, it will be 10 years since we joined the Common Market. Speaking for myself, I always considered entry into the EEC a most disastrous decision, partly because of the highly disadvantageous features of the common agricultural policy, but mainly because I felt that, in the circumstances, we were bound to be on the losing side in industrial competition. Industrial competition, on account of the economies of large scale, does not lead to convergence; on the contrary, the more competition one has, the more one creates a divergence between different producing centres.
Nothing which has happened since 1971 has made me change my mind. It was a disastrous decision from the point of view of the future of Britain. It was a decision in which both political parties and the people at large were almost equally involved. In a referendum, the people voted in favour of by a 2:1 majority, so no one has the right to blame anybody else for what occurred. The damage caused by this can never be wholly undone. None the less, after reading a brilliant book which has just appeared, written by Mr. Richard Body, a Member of another place and, I believe, of the party of noble Lords opposite, I feel that the case for cutting loose from the EEC is more urgent than ever.
In the field of agriculture, there can be no question that our membership causes very serious harm both to the people of Britain and to the third world outside Britain. To the people of Britain it means that they pay an additional £3,000 million on food, of which only about £1,000 million accrues to our farmers. The rest is needed to subsidise uneconomic production here and in Europe. In other words, the people of Britain pay £3 for the purpose of ensuring that £1 reaches the pockets of the people whom we intended to have it. To the people outside Britain, it means that production is discouraged—both by the highly artificial extension of fields devoted to the production of cereals in Britain, thereby narrowing other people's markets, and by the Community's policy of dumping surplus food, which is an additional factor discouraging production.
In manufacturing industry, the link with the EEC—aggravated no doubt by our own economic policies—has accelerated the deindustrialisation of Britain. The full effects of this will remain concealed for a number of years on account of North Sea oil, but unemployment in Britain has already passed its prewar peak and will continue to grow. As the oil bonanza begins to run out, our standard of living will suffer a catastrophic fall unless we succeed in reversing these trends in the meantime. Of this there is no sign, despite frequent optimistic pronouncements by Ministers.
A study of the figures leaves one with no doubt that joining the EEC had negative dynamic effects on the British economy; it had dynamic effects but they were of the wrong kind. It has slowed down our productivity growth and caused our imports of manufactured goods from the Six to increase much faster than our exports. Up to the early 1970s, we had a surplus of trade with the Six which existed almost every year. We then moved into a growing deficit in our trade in manufacturers so that by 1980, as Table II of the report shows, the adverse balance of our trade in manufactures amounted to £3,000 million or 20 per

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cent. of imports—most of which occurred in our trade with Germany.
Between 1973 and 1981, manufacturing output in Britain fell by 18 per cent. whereas in the rest of the EEC manufacturing output rose on average by 9 per cent. Perhaps it is unfair to make our entry into the EEC responsible for all this. The greater part of the relative deterioration occurred after 1979, since when Britain's output shrunk by nearly 20 per cent. whereas the rest of the EEC has shown a shrinkage of only 2½ per cent. So the EEC can hardly be held responsible for our present troubles any more than can the world recession, which is another favourite excuse of Ministers. World recession shows a fall in manufacturing output of 2½ per cent. but not of 20 per cent. What I can say with some confidence is that, by preventing the adoption of alternative strategies as well as by encouraging import penetration, joining the EEC has caused us a serious loss quite apart from the cost of membership of the common agricultural policy, and the diversion of trade from its traditional channels—and it would have done so even if Mrs. Thatcher had never existed.
6.48 p.m.
Lord Gladwyn: My Lords, I must begin by saying that, for reasons which I have explained to the noble Lord who is to wind up this debate, I may not be able to stay until the very end, although I hope to do so.
The ordinary and uninitiated reader of this excellent, if rather long, report—if there is such a person—may well ask how the European Economic Community manages to function at all! The difficulties in the way of even most normal trading transactions seem at first sight to be so formidable, so indigenous and even so incurable as to make a nonsense of the Community as a genuine free trade area; that is to say, an area in which trade is supposedly as unhampered as it is in Australia or in the United States of America. That is the impression one might get on first reading the report. All the old protectionist or nationalist impediments to free trade seem increasingly to be raising their disguised heads against the principles which are laid down in the treaties. I would not deny that,
"Naturam expellas furca lamen usque recurrel".
Translated, that means, "You may throw out nature with a pitchfork but she will always come back"!
Fortunately, as I think, the first impressions of a discerning reader of the report may well be too pessimistic. Let us look at some of the contrary evidence, including that quoted in the excellent speech of the noble Lord, Lord Greenhill of Harrow, submitted to the committee, and the rather contrary conclusions eventually reached by it. On page 41 of the report a representataive of the Food and Drink Industries said that though uncertainties were a strong disincentive to United Kingdom manufacturers he could quote no case where a firm had actually slipped back from making the effort.
On page 102 the Confederation of British Industry, who surely ought to know what they are talking about, are quoted as saying:
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"Setbacks within the Community should not cause too much despondency and must be kept in perspective: there is little doubt that the special disciplines of EEC membership have worked to keep markets more open. Member States know very well that an overt and substantial retreat from their free trade obligations will bring retaliation from their EEC partners in one form or another, and that their governments must therefore seek workable compromises where domestic measures touch upon the major trading interests of other Member States."
Then, at page 113, the Association of British Chambers of Commerce, which I think is possibly an equally representative body when it comes to speaking for industry, said:
"When one looks at the accessibility of the European market one sometimes wonders why some of our exporters try so hard in other extremely difficult markets. The problems there are much greater than they arc in Europe."
The British Leyland conclusion, which I think is fairly relevant and deserves reading (see page 208) says:
"In the normal course of events BL does not encounter significant problems in its own trade with the Community, although the growth of tied imports has. in BL's view, detracted from the United Kingdom motor industry's competitiveness. The emergence of price differentials"—
—to which the noble Lord, Lord Kaldor, referred—
"has created a unique situation and severe commercial problems. BL is confident that it can cope with these problems successfully provided it has time to adapt and that the operation of market forces is not hastened by legislative action".
The Ford comment is a little further on, at page 226. I think this was also referred to by the noble Lord, Lord Kaldor. It reads:
"The paradox is that the European Community seems to offer the right economic dimensions to tackle present-day problems of industrial adjustment, but the Member States do not put enough trust into the venture to allow it to perform and to succeed.".
Finally, at page 243, we read from the first paragraph of the memorandum submitted by the Retail Consortium, a body of some importance:
"After initial hesitation. United Kingdom retailers have slowly come to regard the European Economic Community as one market in which to buy and sell goods.".
All this, I think, explains to some extent what is said in the report itself, namely, that in spite of everything:
"The continuing growth of the European Economic Community's trade in the post-1973 period indicates that whilst governments may have the means of frustrating further movement towards European integration at their disposal they have resisted protectionist measures to a notable degree.".
This judgment supports the rather astonishing fact—at least, when I read it myself I found it rather astonishing—which I think slightly contradicts what the noble Lord, Lord Kaldor, recently said (see page xxiii, paragraph 60) that in 1980 just over 40 per cent. of all United Kingdom external trade is with our neighbours, compared with only 30 per cent. in 1973, and moreover that our deficit in the exchange of manufactured goods was—if I read the figures correctly in the 1981 column on page xxiii—proportionately (I emphasise proportionately and taking account of the fall in the value of money) much the same in the one year as in the other. So what general conclusions can we therefore draw from all this?
Lord Kaldor: My Lords, if the noble Lord would allow me, is he referring to trade in the EEC or trade overall with the world?
Lord Gladwyn: With the EEC.
Lord Kaldor: Trade with the EEC is given at Table II on page xxiii. The trouble is that that Table begins in 1976, and we entered the Community in 1973. If you went back a few more years you would find that before we entered the Community we did not have an adverse balance of trade.
Lord Gladwyn: That is quite true; but what is significant, I think, is that the proportion has not varied very much since then.
What conclusions do we draw from all this? One of the conclusions is drawn by the noble Lord who has just spoken, to clear out because it is just no good staying in. But I think few would disagree with the essential conclusion which is drawn by the committee and referred to by the noble Lord, Lord Greenhill of Harrow, namely:
"It is only by general understanding by governments and peoples of the advantages to be gained from an integrated Community market that the 'political will' needed to achieve it will be created. At the present time the committee regretfully conclude that this will is absent.".
I myself would not disagree with that; I think that that will is absent.
But we can also surely logically think that either a partial or a complete withdrawal from the Community, as now recommended by the Labour Party, would be the equivalent of a national disaster. It is all very well to say with the "antis" that our partners would be reluctant to contemplate any reduction in their existing and very profitable exports to this country, but to believe that, for instance, any large reduction of, say, our imports of French wine or Renault cars would not result in a corresponding reduction in our exports of Scotch whisky or Leyland Minis to France is, I should have thought, to give evidence of considerable naivety or wishful thinking.
Yet there is no doubt—and we must recognise the fact—that if the present recession continues the Community may be in danger, if not of collapse, at any rate of becoming a rather meaningless organisation. Since the beginning of the world slump, that has become increasingly evident, and it is not the fault of the Community but of the world recession as such. But before that happens, and protection really gets under way, there must surely be at the least some dramatic change of heart on the part of the Governments, resulting in that "will" to make the Community work which the committee now rightly says is lacking. Adoption of, for instance, the proposals of the Three Wise Men or Mr. Tindemans, together with the reform of the CAP, which I certainly would admit is essential, but which should coincide with an enlargement of the Community's own resources to a very considerable extent, well beyond the present limits of 1 per cent. of VAT, are essential, and of course we should also contemplate reform of the collection of VAT, as the noble Lord, Lord Kaldor, said.
All this could of itself spark off that recovery in world trade which is now languishing largely, I would say, as a result of the complete failure of the United States' market to pull itself together. As the ideas of Keynes were largely responsible for pulling us out of the last great slump, so the European idea, if only we
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have the sense to apply it, could be our salvation some 50 years later. When one thinks of it, it is absurd that, having formed a trading and economic bloc, if not a free trade area altogether, which is three times the size of the Japanese equivalent and, indeed, the largest such area in the whole world, we potter about in our little backyards never really seeing the wood for the trees. I can only hope that if towards the end of next year the Liberal-SDP Alliance has anything to do with policy it will see to it that the necessary lead is given and that a new impetus is created for the recovery of the whole of the non-Communist world.
7.1 p.m.
Lord Soames: My Lords, I shall resist the temptation of following the noble Lord, Lord Kaldor, in using this debate on a very detailed and specific matter of internal trade within the Community, to widen it to a debate on whether or not it is good for the United Kingdom to be in the Community. I shall not follow him in that line because it would be wrong to do so and to take well over 20 minutes in doing it. I hope that the noble Lord does not in any way think that my refusal to follow him signifies any agreement with almost anything that he said.
I should like to join with other noble Lords in congratulating the noble Lord, Lord Greenhill of Harrow, and his colleagues on the sub-committee, on this most excellent and valuable work. I hope that it will be widely spread and read among the Governments of the member states and in the Commission and in Parliament, for it highlights the extent to which member states continue to thwart and to obstruct the free movement of trade within the Community by a whole web of technical, administrative and other barriers. As the noble Lord said today, and as is written in the report, the committee decided to concentrate on trade in industrial products. I hope very much that it will be possible for another report to be written in future on services, for there is certainly a great deal to be said there, too.
Much of the report is necessarily of a detailed character but I should like, if I may, to make three general points. I shall make them as briefly as I can. The first is that I hope that the report will be well studied by the Commission. As the noble Lord, Lord Greenhill of Harrow, said, and I agree, its heart is in the right place and it has, particularly in recent times, done its best to encourage member Governments to break down the barriers and to liberalise trade, and to break down the non-tariff barriers of which there are all too many highlighted in the report. But, in the ultimate, it is only the Commission, if it has the strength and the will, that will be able to give the impetus to greater liberalisation and, as it were, to shame member states into action.
In saying that I am aware, of course, that there is a limit to what we can expect while all countries in the Community are going through terribly difficult times in a period of recession. The committee happens to have considered this aspect at this time, and we must bear in mind the circumstances in which we are discussing the report. I hope that at least member states will not make things worse during the recession and use the recession as an argument to increase the various barriers to trade. I suppose that this is the most

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and the best that we can expect at present, but that does not mean that there should not be considerable discussion about the extent to which it would be possible, and should be possible, to liberalise trade as the world moves out of recession into brighter skies. I hope that in all I have had to say it will be understood by your Lordships that I am speaking against that background of the awareness of the difficulties forced on all member states by the recession.
Leaving the recession on one side—and this recession has been in existence ever since the Community was created—we have this trouble of the fault lying not with the Commission or the European Parliament but with the Governments of member states who, in varying degrees, have proved themselves all too determined to hang on to various ways of obstructing intra-Community trade. I do not believe that in any way can Her Majesty's Government be put into the dock among the most guilty. Far be it for me to say that we are in a white sheet, but I was privy to the thinking of Her Majesty's Government and involved to some extent in shaping policy in this area at about the time when Mr. Douglas Hurd made a most excellent speech in the European Parliament, referred to in paragraph 4 of the introduction to the report. I should like to quote a sentence or two from it:
"Speaking in the European Parliament … Mr. Douglas Hurd … endeavoured to give a lead and spoke of a wider range of issues. He drew attention to the elimination of technical barriers to trade; the creation of a single market for services; the easing of frontier formalities; improved competition in transport including air transport; and action to stimulate competitive European industry in new technologies.".
Very good. All good stuff. The report rather nicely adds, with, I thought, a wealth of meaning:
"The speech was well received but the inherent difficulties remain.".
That is a delightfully expressed sentence with, as I said, a wealth of meaning. I hope that the sentiments there expressed by my right honourable friend Mr. Douglas Hurd will still remain, a long and recessional year later, the policy of Her Majesty's Government and that they will continue to pursue it with vigour.
My next point concerns relations with third countries. Paragraph 54 of the report refers to the fact that whereas it is absolutely right and reasonable that the EEC should set itself upon an international basis as speaking for all member states on matters of tariff reduction, it is indeed difficult to warrant the EEC speaking with one voice on matters of non-tariff barriers.
I should like to say a few words flowing from a personal experience when I was commissioner responsible for external trade during the period leading up to the Tokyo Round. I must say that I felt that I was on very strong ground talking with our trading partners on matters of tariffs, but I felt that my successor—for the Tokyo Round did not, in fact, take place in Geneva until I left the Commission—was going to be on exceedingly weak ground when trying to represent the interests of the EEC in matters of non-tariff barriers. That was a great pity because we did have, and we continue to have, within the European Community a very great strength in world terms, in world affairs, in matters of trade where tariffs are
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concerned, flowing from the fact that we have a common tariff.
But, equally, we do not get anything like the advantage that we could get if we could stand up and say as far as non-trariff barriers are concerned, "These are ours; this is what we have got. This is what we do not like in yours. We want you to reduce", and so bargain on non-tariff barriers in exactly the same way as we should be able to bargain over tariff barriers. But we are not able, alas! so to do. I hope that we will be able to make a real effort to be in a stronger position for the next round in the GATT once the recession is out of the way and we can move again into greater liberalisation of trade.
My third and final point relates to the difficulties experienced by industrialists exporting to other Community countries, owing to the wild fluctuations of exchange rates. That was highlighted frequently in evidence given to the committee, particularly by the Society of Motor Manufacturers. There are much greater difficulties for us trading into the Community, into countries that are members of the EMS, rather than for them trading among themselves. It is a fact that the fluctuation in parities within the EMS has been notably less in the last five years, for example, than it has been between countries of the EMS and those outside it. including our own. There is no doubt that there is ample proof that trade within the EMS countries is facilitated and encouraged by virtue of the comparatively small movements of parities. We would reap that advantage if we were to become full members of the EMS including, of course, the exchange rate mechanism.
When we debated the EMS my noble friend Lord Cockfield—who I am glad to see here and who will be winding up this debate—pointed out the difficulties, and two in particular: first, that sterling was a petrocurrency; and secondly, that it remained to some extent an international currency like the deutschemark. Incidentally, although he said that those who spoke in favour of the EMS tended in that debate to put great emphasis on the advantages and not to mention the disadvantages, in the speech that I made in that debatei referred in fact to those very two difficulties myself. I would only say the following to him this evening. Surely we on these Benches believe that the duty of Government in regard to industry is that, generally speaking, we should seek to provide the best possible environment to facilitate our industry in its efforts to export. We should not be trading ourselves; we should not be telling industry what to do; but we should be creating the best environment possible and then saying, "Go at it, boys". That is what we are about, in marked contrast to other parties represented in this House. If we are going to do that within the Community, it would be far better if we could get inside the EMS, and I hope noble Lords will realise that by that shorthand I of course mean the exchange rate mechanism. Every day we stay outside makes things harder.
When we get swings of 20 per cent., 30 per cent. and 40 per cent. every two or three-year period between the pound sterling and other currencies within the Community; when we look at that has been happening recently with inflation falling rapidly in this country, with the North Sea oil price having increased consid-

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erably over recent years and with our productivity better than it was some years ago, we find that the pound is weaker today than it was in the days when that situation did not obtain. The pound in fact should have strengthened, but who knows? the Government, my noble and right honourable friends, say that they have no policy as to what the parity should be. I hope they have, and I rather think the evidence shows that they do have an idea at least, if not a policy, as to where it should be. Anyway, what I find so thwarting is that, whether sterling be right up or down, whether oil be expensive or cheap, there is always lip service paid to the advantages of joining the EMS, but it remains something of rhetoric.
I must say that I do not put myself alongside some of my right honourable friends who remind me sometimes of what Lord Palmerston once said: he only wished that he was as sure over one thing as Tom Macaulay was over everything. Of course one cannot be sure; of course there are advantages and disadvantages—we all know that. But I believe that it would facilitate our ability to trade within the Community to a great extent if the disadvantages which we all know exist can be overcome. I believe that the advantages would dominate.
I am delighted that this report has been written. I congratulate the noble Lord, Lord Greenhill of Harrow, and I hope that there will be many more reports to come, including a report on the EMS and one on services.
7.19 p.m.
Lord Rhodes: My Lords, I, too, should like to congratulate the noble Lord, Lord Greenhill, on his speech this afternoon. I have had the pleasure of sitting under his chairmanship for many months, during which time this report has evolved. I would say to those who are pessimistic arising from a perusal of the report that it is far too early to start talking about going out of the Common Market: we have not been at the job 10 years yet! It takes 40 years for anything of a major nature to have an impact on mankind. I bear evidence from World War I and carry it round with me day after day. When I think of World War I, I think of the way that Europe tore itself to bits, and then, leading up to World War II, much of what we have been talking about this afternoon and previously is very academic.
Before I begin my speech I should like to ask a question. I do not expect the Minister to reply to it today because it would be unfair to ask him to do so. How many copies of this report have been printed? How many copies have been distributed? Where have they been distributed, and to whom? But most important, have any gone to members of the European Parliament? Are we ensuring that there is a wide distribution of the work that has gone into this report?—and, my goodness, some work has gone into this report under the chairmanship of my noble friend Lord Greenhill. If it has not been distributed in that way, why do we not get on with it? I raised this before on one occasion when the noble Lord, Lord Soames, was a Minister, and he came up with an adequate answer. Nevertheless, it was not a very good one. I do not expect an answer immediately. But I hope he will answer in due course.
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I shall begin with some background. The western nations have been pre-occupied during the past few weeks with the sorry state of their economics, and their inability to do much about it. First, there was the meeting of GATT for trade talks, and everyone who attended knew that they should take firm action to ward off a new war of protectionism. Instead, they all trooped off home knowing that they did not have the necessary political power to persuade their Governments back home either to reduce existing barriers to trade or to prevent new ones being erected.
History is definite on this matter. Subsidies, quotas, tariffs, all conspire to weaken the basis of world trading and the big misfortune is, of course, that all the western nations have massive unemployment and all of them are desperately trying to stop any further erosion of their own industries. There is nothing new in all this. When I was forging my business inbetween the wars I saw vividly the economic breakdown in the 1920s and the 1930s, and that breakdown led to a vast war of protectionism which heralded the second world war. The change did not come until 1937, when firms were flooded with armament orders. We do not want the same thing to happen again.
Only a matter of days after the GATT delegates departed for home another conference took place in Copenhagen. It was a meeting of the EEC heads of state. It has been said before and I will say it again: they discussed ways of reducing national trade barriers within the Common Market, but I am afraid they spent more time on how to increase external barriers. Indeed, President Mitterrand, supported by our own Prime Minister and many other heads of state, made a clarion call for the
"reconquest of the European internal market".
Out of it came new moves to protect its declining trade and its infant technology industries, but at the same time it proclaimed attachment to the international free trade order. Mr. Thorn, an advocate of protectionism, said that it would take at least five years for the EEC high technology industries to catch up with Japan. What a challenge!
This report is one of the best that has ever come out of the EEC Select Committee. It is superbly put together. If anyone here has not read it, they should remedy that at once. It is set out in absolutely superb style. In Part II it deals with the "Types of trade barriers". First, there are the technical trade barriers. It gives what they are. The next one is the administrative barriers. Then it goes on to deal with the policy of private firms and what monopolies and arrangements between firms can do in the Common Market. Then we come to Government policies and relations with third countries. In a comparatively short speech, such as the one I propose to make, it is impossible to attempt to do justice to this report, so I shall concentrate on two particular points.
In the administrative section of this report, at paragraph 42, we come to "Transport Quotas". I wish to demonstrate the illogicality of some of the things that are going on and to indicate what we can do to prevent the situation from getting worse. The present bilateral quotas for road transport between member states are not consistent with a genuine common market. Quotas are awarded only to established firms

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and it has to be an exceptional case if this principle is departed from. So there is a temptation to charge what they like. Also, the present system of licensing can lead to heavy costs when licences for a particular country are used up and goods have to be rerouted through another country. So all kinds of anomalies exist.
In evidence to us it was stated that it is often quicker to enter Hungary or Yugoslavia than to enter France at Calais. Dover is open seven days a week, 24 hours a day, but Calais shuts down at 1600 hours on a Saturday until midnight on a Sunday. The Eastern bloc can deliver to us, but we cannot deliver to them with our road transport. The West Germans are anxious to control road transport in their country because of their desire to shift goods back onto the railways. They have a bilateral agreement with Russia far more liberal than the one they have with us.
My next point is a follow-up to the point made by the noble Lord, Lord Soames. It concerns the relationship with the third world. I wish to repeat practically word for word what he said. Under Article 9 of the Treaty of Rome goods from third world countries on which duty has been paid are "in free circulation", exactly the same as goods between member states. It is logical that the EEC should negotiate with GATT because we have a common customs tariff in the EEC. On such a matter the EEC speaks with one voice. What I am trying to demonstrate is, if we spoke on more things with one voice how powerful a voice we should have in the councils of the world.
Now what about non-tariff barriers? In this the EEC does not speak with one voice. If anybody has the report at their fingertips, I wonder whether they would look at page 163, because it is a most interesting document. We have 12 examples of complaints about non-tariff barriers, and only one addressed to the EEC: quantitative restrictions on imports from third countries, along with export restraint agreements. I must say that there is an exception in that in textiles there is an EEC full agreement. Today in Brussels they are signing a new multifibre agreement which has been made possible by everybody agreeing to that particular piece of policy. It is a strong thing when the EEC speaks with a collective voice.
The number of products to which these restrictions apply varies from country to country. France and Italy have controls on 121 products; we have controls on 65; and Germany 31. The point I am trying to make is that where you have national quotas and the degree of protection differs from one country to another, goods are being routed through one market for another and by-passing the national quotas, or indeed goods from one member state are being what they call deflected to another as a result of third country exports. This is causing considerable worry to manufacturers in this country. We need a common voice on this. I believe that the negotiating position of the EEC will be strengthened tremendously if non-tariff barriers are harmonised at EEC level.
I finish on one note. The noble Lord, Lord Greenhill of Harrow, sounded rather pessimistic. However, the last but one recommendation in paragraph 82 hits the nail on the head:
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"It is only by a general understanding by governments and peoples of the advantages to be gained from an integrated Community market that the 'political will' needed to achieve it will be created. At the present time the Committee regretfully conclude that this will is absent."
If we continue to accept that the will is absent we shall go into failure after failure. But if all the countries were to get together and really try to educate their subjects and bring to bear the knowledge that they have already acquired, there is no doubt that we could make progress.
The major challenges of the next 20 years will centre on information technology and kindred sciences. I reckon that protection is death for Europe. You cannot base the future of Europe's development on an increase in world trade and at the same time put up barriers to its own market.
7.35 p.m.
Lord Brimelow: My Lords, I agree with the noble Lord, Lord Rhodes, that this report of which your Lordships are invited to take note does not constitute an argument for leaving the Community. I should like to dwell on that for a moment. It is one of a series of reports by the Select Committee on the European Communities which draw attention to imperfections in the working of the Community institutions and which suggest ways in which these imperfections might be remedied, or at least alleviated.
Take the cumulative effect. The result is a lengthening list of imperfections, and also a lengthening list of recommendations not all of which have been, or will be. implemented. These lists can be used, and may be used, by those people—and they are numerous —who think that this country was ill-advised to join the Community and would now be well-advised to leave it. But the question of the general balance of advantage of staying or leaving is a difficult one. There are so many considerations, and the considerations are disparate, and because they are disparate they cannot be aggregated in any persuasive way.
Given the difficulty of forming any general balance, I think it is desirable, when each successive report of this kind comes before your Lordships' House, that somebody should attempt the more modest task of assessing whether this report weighs in one scale or the other. I am in no doubt that this report weighs in favour of our staying in the Community, in spite of all the imperfections to which Lord Greenhill's sub-committee has drawn attention.
The report is right in saying that we shall have to chip away on a large front at these imperfections and obstacles of various kinds. In that task, as it is, we have allies and we have support: we have the Treaty of Rome; we have the Commission, which is in favour of working against the obstacles to trade; we have the European Parliament, which in general is of the same persuasion. In the last resort we have the European Court of Justice. If we were to leave the Community we should have no allies; we should not have the goodwill which we have in this task; we should be working from the outside: we should be on a losing wicket.
Therefore, despite the somewhat pessimistic tone of the report, and the rather pessimistic ending of Lord Greenhill's excellent introductory speech, it is entirely

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right that we should plug away determinedly, even if we do not expect any early success, or success across the board. In that respect one ought to remember the motto of William the Silent of the Netherlands when he was beginning his struggle against the Spaniards, that in order to undertake it is not necessary to hope; and in order to persevere it is not necessary to succeed. His cause eventually won, and I feel sure that if we continue to peg away we shall eventually reduce these obstacles to our trade.
I do not underestimate the difficulties. The Community institutions were designed to be difficult to change. The Community practices are also difficult to change. I recall that, when we joined the Community, at one of the very first sessons of the Council of Ministers, the then French Foreign Minister, Mr. Maurice Schumann, warned us against trying to change the institutions and practices of the Community. "They are not to be touched", he said, "save with a trembling hand". He was quoting from Montesquieu. He should have gone on, because, if he had, he would have found a quite different sentence, in which Montesquieu said:
"If I knew something which was useful to my country and disadvantageous to Europe. I would regard it as a crime".
I am afraid that French spokesmen are as selective in their quotations as the French Government are selective in their interpretation of their obligations under the Treaty of Rome.
But one should not point the finger solely at the French, even if they have more cases against them in the Court of Justice than any other member of the community or even if, in the list of non-tariff complaints, which the noble Lord, Lord Rhodes, quoted, they have four against them compared with one against us. But they will persist, and even we, who are not the worst offenders—that point has, rightly, been made—have had an accusing finger pointed against us in some of the evidence attached to the report by the Select Committee. I do not think we shall find the process of chipping away entirely to our liking, any more than the others will, but it is the right course and I hope the Government will follow it persistently, even of it does not lead to early results.
That is really all I wanted to say of substance, although there is a question at the back of my mind which I wish to raise. On page 61 of the report is an estimate of the cost of getting manufactured goods across the frontiers of the Community. The witness, a German Member of the European Parliament, said the Commission agreed that it was about 5 percent. of sales and that the total cost of getting goods across the Community internal frontiers was of the order of magnitude of the common agricultural policy. If that is so, it is a very striking and little-known figure, and it indicates that even if chipping away leads only to small percentage gains, the net absolute figure might be well worth while.
7.43 p.m.
Lord Mottistone: My Lords, I, too, thank the noble Lord, Lord Greenhill of Harrow, for an excellent report, and I agree with the noble Lord, Lord Rhodes, that it is one of the best the Select Committee has produced in recent times. I wish to begin by quoting
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two points from the report, one in paragraph 10, the introduction, where it says, among other things, that many of the obstacles are unintentional, and the other in paragraph 66, where it says that uncertainty is the common feature. Very similar things were said to the Government in the late 'sixties by Mr. John Bolton, when he made his report on small firms. He was saying that most of the things which were adverse to small firms and were created by Governments were done by mistake. Those points should be taken to heart not only by our Government but by the Commission in looking to see where exactly mistaken actions can, unnecessarily and unintentionally, be harmful.
I shall not delay your Lordships for long, but there are a few matters about which I have managed to acquire personal knowledge which I feel I should mention in amplification of the report. The first relates to the reference in paragraphs 33 to 38 to the simplification of Customs documents and procedures. We have before us, produced at the instigation of and with great enthusiasm by Commissioner Narjes, a paper which should introduce a single administrative document; just one form for taking all goods through the Community. I am sorry to say that while everybody agrees very much with the principle behind it, the document, which has been thrown up for people to use, is so unsuitable—and, to some, incomprehensible—that it is having to go back for further reference.
I make that point for two reasons. One is that it is an example of where the Commission is genuinely trying to be helpful—and it does not always have the support of the Governments of the member states in doing so—but is doing something that is not good enough. It is much more important that it should take trouble to take into its confidence the users of such documents, the actual traders, who have to send their goods across the frontiers—those who the noble Lord, Lord Brimelow, said were having to pay as much as it costs to run the CAP in delayed charges at frontiers. They are not being consulted, and the officials of Governments—in this case Customs officials—do not in many cases know what is needed to simplify and free the barriers to trade.
The second point I wish to raise is the reference in paragraph 40 to the postponed collection of VAT. Here again, the Commission is trying to do the right thing. As the report says, the United Kingdom—and, at the time the report was written, Ireland, and, I think, Belgium—employed what is called the postponed collection of VAT; that is, they did not collect VAT until after the goods had been imported and were in the process of distribution, when it was matched to the ordinary VAT returns, so that, in effect, the Governments carried the cost.
The Commission have instituted a directive to try to bring into force, for all member states, postponed VAT accounting. At the same time the Irish, one of the three member states which have been doing it—in trouble, no doubt, with their own finances—have cancelled their adoption of this principle, and at the moment, as the need for it is optional, they are perfectly entitled to do that. It seems sad that at the moment when the Commission is trying to make things simpler for traders one of the few states which

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were doing it is going the other way. That is another example of where the Commission's heart is in the right place but the member states are not following it.
Another major stumbling block, in my view, is the understandable view of Governments to retain control of key taxation areas, such as VAT and excise duties. I am not talking about basic taxation, which is different. In this case it would seem a shame, though understandable, that Governments should still find it necessary to retain to themselves total jurisdiction in these areas of taxation. For example, simplification of excise duties would clearly be desirable, and indeed in a speech in a recent debate on the state of the whisky industry I mentioned that point. But of course if the excise duty system is simplified throughout the Community, it is most important that any changes must not lead to a catastrophic tax increase for individual products and create new barriers for existing well-established markets. Because the Governments retain the control of the excise duties—and this is an essential part of their tax-raising facility—unfortunately one cannot be sure that if excise duties are simplified, there will not be a sufferer, and in this country it could well be beer, which would be a disaster. So that is another area where we must work towards a greater common purpose in trying to see our way through to common handling of essential basic functions.
Another matter that I should like to mention, and which is referred to in paragraph 5 3 of the report, is that of state aids. I mention this because Sub-Committee D of the Select Committee recently reported on state aids, and I think it relevant to this debate to repeat the reference that I made in the earlier debate to the need for greater effort by the Commission to devise and implement schemes for finding out about state aids and for publishing the information. It is quite clear that there is tremendous distortion throughout the trading pattern of the Community because of the use of state aids, many of which are not made public, and indeed, as the report itself states, it is particularly difficult for ordinary traders to find out about them. I think that that is a matter that should be dealt with.
My next point relates to the Cassis de Dijon case, which is reported on very fully, and splendidly, in paragraphs 21 to 29 of the report. I should like to remind your Lordships that the basic feature of the principle, as mentioned in paragraph 24, is that,
"Any product lawfully produced and marketed in one Member State must, in principle, be admitted to the market of any Member State".
The report then goes on to explain how various court findings and qualifications do not make that simple principle exactly applicable; but the fundamental is as I have described it. I agree with the noble Lord, Lord Greenhill of Harrow, that the judgment could indeed be far reaching, and one would look forward to there being evolved case law which would more effectively perform the function of harmonisation. There are parts of the report in which this point is gone into in some detail, and with which I entirely agree.
Harmonisation has in many cases been a disappointment, and an example of that in recent times has been the labelling directive, which relates to
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the labelling of packaged foods, and which was introduced two years ago and becomes effective on 1st January next. The directive refers to over 20 points at which member states can exercise their own discretion about implementation. This is called "taking a derogation". I have a list regarding this, and I had thought of trying to tell your Lordships about it, but it is so long and so complicated that it is quite impossible to summarise. Of the 25 or so areas, one state will take up a derogation under a particular heading, another state will take up a derogation under another heading, and a third state will take up yet another derogation under another heading; and combining the whole lot makes about 100 points of difference within the Community. As has been said, one member state's derogation is another member state's barrier to trade, and the principle of harmonisation, though not entirely eroded—it would be wrong to say that it was—is very much weakened because of the derogations. But it would not have been possible to introduce and pass into law the labelling directive had there not been the derogations, because the member states would never have come to an agreement.
So I believe that the Cassis de Dijon case is a very important move, and one that I hope will develop, because it will by case law create the same background that the harmonisation was seeking to create. I would hope that it will expand greatly. As your Lordships can see from the report, the judgment has frightened the Commission, and I am sorry for them. But if there are to be derogations in directives—and I do not blame the Commission for it—the essential parts of the Common Market will be enforced by the Cassis de Dijon route, instead of by the harmonisation one.
Having highlighted those points—and I am sorry to see that the noble Lord, Lord Kaldor, has left the Chamber—I would say to your Lordships most emphatically, as have other noble Lords, that, notwithstanding all the difficulties, I strongly disagree with the noble Lord, Lord Kaldor. As a wise German official of the Commission said 10 years ago, in answering questions about the Community, the Common Market can never be seen as an overnight achievement; its details will take many decades of painstaking co-operation to become fully effective. I think that what that wise German said was exactly what the noble Lord, Lord Rhodes, said to your Lordships in the opening part of his speech here tonight; and I believe that it is absolutely fundamental. I very much hope that my noble friend the Secretary of State will be able to tell us that the Government take the same view. I hope that we shall take courage from paragraph 67 of the report, which states that all the people consulted were full of hope and methods to try to make the internal market work. We must forge ahead with simplifying customs administration, making state aids public, encouraging Governments to harmonise taxation systems, initiating action to extend the Cassis de Dijon principle, and a host of other things that I have not had time to mention to your Lordships. Above all, I would hope that we should not expect instant results.
7.59 p.m.
Lord Oram: My Lords, as a member of the subcommittee which was chaired by the noble Lord, Lord

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Greenhill of Harrow, let me frankly reveal that at one time during our deliberations a number of us were rather afraid that we had bitten off more than we could successfully chew. But the fact that we finished the meal was very largely due to the skill of chairmanship of the noble Lord, Lord Greenhill, and I am sure that he has been gratified to hear the complimentary remarks about the report which have come from all sides of your Lordships' House.
I believe that the report is indeed a very useful one, not so much for any major recommendations, since they are few, but for the way in which it gives a frank description of the existing barriers to free trade within the Community, bearing in mind the way in which those barriers particularly create uncertainty for businessmen and frustrate the achievement of what all who favour the Community would wish; namely, an integrated internal Common Market.
The report is long on descriptions of problems and short on solutions. I believe that in dealing with this subject the report is none the worse for that fact. It sets out most usefully the nature of the barriers. They have been mentioned by various speakers; I will mention a few. There are the complicated administrative arrangements particularly at frontiers between member states. There are the differences in VAT procedures; there are the bilateral quotas for road transport, exclusive dealerships and inadequate standardisation of, particularly, engineering products. The sub-committee, in connection with those difficulties, puts forward a number of suggestions for overcoming them.
At the same time, our report is obviously pessimistic in its general conclusion, as the noble Lord, Lord Greenhill, has repeated in his speech. We as a subcommittee are afraid that industries in member countries, in concert with their national Governments, are so preoccupied by short-term aims that they will forgo until it is too late the international, competitive advantage of a large internal market. That is why we concluded that what is needed is a greater political will to achieve it and that that political will at the moment is absent.
One of our witnesses, Mr. Hugh Corbet of the Trade Policy Research Centre, helped us to see these difficulties in a wider international setting. I should like briefly to quote from the evidence that he submitted to us on page 7 of his submission. It, too, is a pessimistic statement. I quote from paragraph 38 of the report's minutes of evidence:
"In this deteriorating international situation, the European Community is fast losing its original inspiration and, worse, its ability to act constructively on the world scene … Being fully pre-occupied with the internal balancing of short-term advantages, the Community cannot work out a role for itself …"
That, though pessimistic, I believe to be true, but I conclude from that pessimistic picture, as did my noble friend Lord Brimelow, that in the face of that depressing picture and those difficulties the thing to do is not to quit but to persevere. That I believe to be our task in this country and in other member states.
That quotation that I have put before your Lordships describes the very great difficulties of the overall situation of the EEC within which our sub-committee had to examine the internal sitution. In one sense, the task that faced us was highly technical and,
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in a sense, narrow in its focus. But when you come to examine all its ramifications, in another sense what is involved is an examination of very wide issues indeed. I hope, and I believe, that our sub-committee did not fall between those two stools and come a cropper. I believe, as I have said and as others have said, that, faced with that difficult task, we have produced a most useful report.
Those who take the time not only to study our report but also the evidence on which it was based, will be in a better position to understand the internal difficulties facing the EEC at the present time but also the external difficulties. Those external difficulties are partly caused by, and partly the cause of, the internal difficulties. From the report I hope that there are many lessons of details to be drawn, but in my view there are two major lessons to be drawn. The first is that the nature of the world economy in which the EEC operates today is very different from the world economy of the 1950s. Many important changes have taken place; and it is a question of adapting to those changes. The internal stresses by which we were sometimes appalled are largely the result of those changed external circumstances.
I would mention two of the changes. There are others, of course. For one, I would say that the greater expectations of third world countries in today's world are very different from what they were two or three decades ago. Another is the changed attitude of America towards the Community. This is an important difference of which we need to take note. As I have said, the internal stresses very largely arise from those external changes. The sad thing about present world conferences and actions by national Governments is that these changes, these problems, are leading to increased measures of protectionism, both overt and covert. These moves to protectionism are manifest both within the Community and in its relations with the outside world.
Therefore, I believe that the second lesson that we should learn is that protectionism is the instrument by which nations seek to resist change and, in my view, if you try to resist change you are doomed to stagnate. Instead, you should adapt in order to grow. In my view, protectionism will not work; because the forces that make for change are too strong to be resisted by that method. In my view, unless the Community consciously sets about developing a liberal trade posture vis-à-vis other countries, it will inevitably be faced by increasing internal dissension and the problems which we have tried to analyse, of achieving integration in the internal market, will be increased rather than diminished. I hope that our report will have helped somewhat in the argument that is inevitably going to take place on those points.
8.9 p.m.
The Secretary of State for Trade (Lord Cockfield): My Lords, I have listened with very great interest to the speech of the noble Lord, Lord Greenhill of Harrow, as I imagine did all your Lordships. It would perhaps be trite to say that this report on the internal market produced by your Lordships' Select Committee is an interesting and valuable document. The noble Lord, Lord Oram, in his introductory remarks, described it as "a useful one". I would give it

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significantly higher marks than that. It really is of great value to have major issues of this kind probed both in depth and in detail. The decision by the Select Committee to concentrate on one particular feature of the internal market and examine it in detail was entirely right. I agree with the noble Lord, Lord Rhodes, that the report deserves a wide circulation. The noble Lord, Lord Kaldor, has a very personal and peculiar view of what the European Community is really about and how it works. If the noble Lord's view of the Community were an accurate one, I should not be at all surprised at the Labour Party wishing to withdraw from it. But in fact the noble Lord's view is not one that I accept and is not one that is accepted by the great majority of your Lordships here tonight.
Lord Kaldor: My Lords, if I may interrupt for a moment, if the noble Lord looks at my speech, he will see that most of my examples of points were taken from Lord Greenhill's report.
Lord Cockfield: My Lords, I am very glad indeed that the noble Lord read the report produced by the Select Committee. I am only sorry that it made so very little impression upon him, and I would recommend him to read it again. The vigorous defence of the Community by my noble friend Lord Soames and the noble Lord, Lord Rhodes, was particularly effective and encouraging. I was also impressed—as I am sure your Lordships were—by the careful analysis of the situation by the noble Lord, Lord Brimelow, which led to the same conclusion.
The European Community is about much more than economics. It is an attempt to weld together the people of Europe in a way which will guarantee peace and harmony inside the Community and present the strength of unity to the outside world. We must never forget this when we are immersed, as we inevitably and all to frequently are, in the internal affairs of the Community. But, if the community is about more than economics, nevertheless economics is an integral part of the tapestry and the most visible element of the design.
The intention of the Treaty of Rome was free trade at home and a common—but very modest—tariff wall against the rest of the world. It was the development of this tariff-free internal market which was designed to provide prosperity for all the members of the Community. Much of the strength of the United States derives from the fact that it provides for manufacturers a free internal market of over 220 million people enjoying between them 24 per cent. of the world's gross national product. Europe—with a rather larger population but a similar gross national product—offers a comparable market and a comparable opportunity.
But, 25 years after the signature of the Treaty of Rome, and close on 10 years after our own accession, the free internal market is still far from a reality. The fact that the summit at Copenhagen 10 days ago declared the strengthening of the internal market a priority goal is both a demonstration of this and more importantly a sign of determination to tackle one of the great outstanding problems of the Community. The actual words of the communiqué issued at the end
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of the summit were these:
"To decide, before the end of March 1983, on the priority measures proposed by the Commission to reinforce the internal market".
So there is both a sense of urgency as well as a sense of priority here.
The noble Lord, Lord Greenhill, said that the timetable was unrealistic. I hope that he will forgive me if I say that it sits a little odd that he should start by complaining, quite justly, about the slowness of the progress which had been made, and then find fault with the speed of the timetable that the Commission now wish to adopt. My noble friend Lord Soames made a very valid point which we need to bear in mind; that is, there is a limit to what we can expect to achieve in a period of recession. But it is equally true that we need to look forward to the world into which we shall enter when the recession is over.
Perhaps I may now turn from these rather broad issues of policy to more practical matters. I know from my own experience of numerous instances where our exporters to other member states have run into difficulties that they might reasonably expect to avoid in a genuinely open market. I can understand that they find it hard to reconcile with the principles of the internal market measures such as those which the French have recently announced. I am aware too of the widespread concern that continental state aids, notably in Italy, are distorting fair competition and acting as a barrier to free and open trade.
I want however for a moment to ask your Lordships to stand back to look at those legal and administrative requirements imposed by some of our partners in Europe which our own exporters find so frustrating. If we are to be frank, we must acknowledge that this frustration is sometimes reciprocated, though, as the noble Lord, Lord Greenhill. said, with very much less justification. We need to recognise that all Governments have social and administrative concerns which are legitimate—concerns, for example, for the health and safety of their citizens and for their citizens' rights as consumers. Business has to be conducted within the framework of these legitimate concerns. Firms cannot avoid the trouble of informing themselves of the legitimate national requirements which result.
Then there are requirements, equally legitimate, and fully compatible with Community law, but which are more onerous and tedious than they need to be. On these, it is possible to make progress—deperately slow at times; nevertheless, it is possible to do so—through Community action: for example, the work being undertaken to harmonise different national requirements through what is known as the Article 100 programme. Such progress may also be made bilaterally by negotiation; or through Community action to limit the impact of such requirements on trade—for example, through the work of the Simplification of International Trade Procedures Board (SITPRO).
The noble Lord, Lord Greenhill, paid a handsome and well-deserved tribute to the work of SITPRO. In contrast with what might be described as these legitimate barriers are those barriers to trade which are cynically imposed for short-term national advantage. We find barriers to the internal market in this category

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totally unacceptable. I assure your Lordships that in cases of this kind the Government do and will make it abundantly clear to the member state concerned, and to the Commission, and in the Council, that we are not prepared to tolerate measures of this kind.
There is a further major area of frustration to British business, which your Lordships' Select Committee did not explore on this occasion. It is the question of the infrastructure which underpins the internal market in goods; namely, the internal market in services. The freedom to transport goods, to insure them, to finance them anywhere in the Community is a critical part of the Common Market. I look forward to the opportunity when your Lordships' Select Committee return to that subject, which we regard as crucially important so far as the United Kingdom is concerned.
We are also concerned about the national permit quotas on lorry journeys, which is a matter to which the noble Lord, Lord Rhodes, drew attention. These restrictions have no place in a free internal market. The noble Lord also drew attention to the variation of national quantitative restrictions as between member states of the European Community. If I understood the noble Lord correctly, perhaps I might say that there is a Community procedure to avoid the problem to which he referred. Article 115 of the Treaty of Rome allows the Commission to authorise member states to prevent their national quantitative restrictions being evaded by imports from outside the Community coming through other member states. We make full use of Article 115.
The Government themselves must and will make their full contribution to help British industry take full advantage of our internal market. The Government's initiative on standards, set out in the White Paper published earlier this year, has this very much in mind. Standards, certification and accreditation need to be increasingly widely adopted and internationally orientated if British goods are to compete in this larger market provided by the European Community. Similarly, the Government have made important improvements in our Customs services. We are increasing the use of computer facilities and of other simplified procedures to speed the flow of trade.
This brings me directly to the issues on which the report to your Lordships concentrates. We recognise that underneath the technical detail standards are of crucial importance to the ability of industry to sell their goods throughout the internal market. We have therefore given our strong support to the efforts within the Community to ensure that standards are used to promote competitiveness and efficiency, and not as non-tariff barriers.
The Commission are pressing three priority areas for action. These fit in well with the specific concerns expressed in the Select Committee's report. The first two are proposals for unblocking the Article 100 programme and for procedures to ensure transparency in the making of standards and technical regulations. The third is concerned with frontier facilitation. All these measures command our strong support in principle. We will be doing all we can to secure the adoption of the frontier facilitation directive later this week. It promises to simplify and speed up inspection, to cut down waiting periods and generally improve
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co-operataion between neighbouring frontier posts. Frontier formalities and the collection of statistics with Customs documentation are also themes covered closely in the Select Committee's report.
The Government fully recognise the importance of simplifying Customs formalities. Current features offered by United Kingdom Customs which simplify trading are: computerised entry processing, special procedures for large regular imports under the period entry arrangements, and the postponement of VAT payments to the time when an importer submits his quarterly VAT returns to the Customs.
But import and export procedures and documentation still leave room for improvement. More needs to be done to accelerate the movement of goods within the Community, particularly by reducing the amount of paper work. The Government have instituted a number of reviews of Customs procedures. We have strongly supported the European Commission in its efforts to automate information exchange on imports and exports. In particular, our Customs are at present discussing with the trade the possibility of further automation of Customs import formalities. Similar work on the Continent is also well advanced.
My noble friend Lord Mottistone also referred to the single administrative document proposed for intra-Community trade. I acknowledge that doubts are being expressed as to whether the Commission's proposals represent genuine simplification. Both the enabling regulation and the document are still under discussion, and officials are consulting with trade associations to ensure that the user's views are taken into account.
Looking ahead to the mid-1980s, we hope that exchanges of information in bulk by electronic means will become commonplace. The United Kingdom has accordingly given full support to the CADDIA project, which is about to begin in Brussels. This is a Commission initiative: to give it its full title, Co-operation in Automation of Data and Documentation for Imports/Exports and Agriculture. This is an ambitious project, the purpose of which is to examine the way in which the flow of data concerned with trade within the Community can be expedited by using computer returns. The Government support initiatives aimed at securing those genuine and practical simplifications of Customs formalities which will complement the simplified procedures already operating in this country.
Another subject covered by the Select Committee's report is what is known as the parallel import of motor vehicles—a subject which has been raised during the course of this debate. The Government have specifically decided not to intervene in this trade. We recognise that the price differential which has led the British consumer to purchase elsewhere in the internal market is in part outside manufacturers' control, being due, for example, to exchange rate variation. But motor vehicles are not uniquely affected by such factors in such a way as to justify interference with the right of all Europeans to shop in any part of our internal market. The real solution lies, and can only lie, in increasingly competitive pricing by the British motor industry effecting a long overdue improvement in its cost-competitiveness.

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My noble friend Lord Soames and other noble Lords raised the question of the Eueopean monetary' system. This lies outside the scope of the present debate; but may I briefly say this. While the Government are committed to the aims of the E.M.S., and in particular to the achievement of greater exchange rate stability within the Community, my right honourable friend the Prime Minister said in another place on 7th December—and I quote—
"At present we do not intend to enter the E.M.S."
We believe that unless underlying economic conditions are conducive to exchange rate stability, sterling's participation might intensify realignment pressures. The question of sterling's participation is kept under review.
The Community has an external as well as an internal aspect. To the outside world, also, it is a single trading unit. This unity of aim and of purpose is more than ever crucial in the face of the pressures and difficulties arising from the world recession. Against this threatening background, the modest success achieved at the recent GATT ministerial meeting was encouraging. Today, I would point in particular to the recognition that the GATT is going to have to concern itself with international trade in services as well as in goods, and the work on an improved procedure for settling disputes. It is not enough for the world trading system to be an open one; it must also be fair. We will need the combined strength of our Community of 10 member states to bring pressure to bear to achieve these ends.
It is impossible to exaggerate the importance of the ' European market to this country. In 1973, when we joined the Community, some 30 per cent. of our exports went to European Community markets. Today, the figure is close on 43 per cent. We have, therefore, a crucial interest in the development of the European market as a whole, and in the removal of internal barriers in that market. The European summit at Copenhagen 10 days ago marked an important step forward. We must build on that. Our prosperity—and the prosperity of Europe as a whole—depends upon it.
Lord Greenhill of Harrow: My Lords, there are many speeches to follow in a subsequent debate, and it would be unfeeling of me to speak for more than a moment or two. But, on behalf of the sub-committee, I should like to thank the House for the kind things that were said about the report. The committee will be very happy that it has prompted speeches revealing and reflecting great experience, profound erudition, compelling sincerity and even, sometimes, a little prejudice. I should particularly like to thank the Minister for his painstaking and characteristically clear answer to the debate. I am sorry if he regretted my reference to the Copenhagen timetable. I do not complain about the timetable; I doubt whether the train will run on time. I beg leave to withdraw.
Motion, by leave, withdrawn.

Probation Officers: Pay
8.33 p.m.
Lord Wells-Pestell Lord Wells-Pestell rose to ask Her Majesty's Government what are the reasons and justification for the proposal to reduce from 1983 the rates of pay for probation officers in training. The noble Lord said: My Lords. I beg to ask the Question standing in my name on the Order Paper. It was with some diffidence that I decided to bring this matter to your Lordships' House, but some months ago I had a discussion with the noble Lord, Lord Elton, and that was followed by some rather lengthy correspondence on both sides, resulting in my not being able to make any progress at all. It is because I regard this matter as so important—and so do my friends who are supporting me in this Question—that I felt it ought to come to your Lordships' House, where it can be aired, and, I hope, aired in the newspapers and on the BBC. My friends and I fail to understand how a responsible department of Government could come to the conclusion which it has reached on this matter.
It is many a long year since we had an Unstarred Question in your Lordships' House, supported—if I may exclude myself—by a number of very-distinguished Members of your Lordships' House, including a number from the Bar. The Question relates to the Home Office's intention in 1983 to reduce the training allowance made to probation officers in training. Perhaps I ought to explain that the probation service recruits its trainees through two different channels. One is through the probation area committees, of which I acknowledge there are now only a very few, putting forward candidates for the probation service; the rest—and, I agree, a very substantial rest—coming through the Home Office.
At the present moment, a person accepted for training for the probation service through a local authority committee receives a bottom allowance of £4,677, against £4,551 when funded by the Home Office. It is this bottom point in the salary scale that I want to raise tonight, because the bottom point in the Home Office scale will fall next year from £4,551 to £3,588—a drop of £1,000. I fail to see how anyone in his right mind could justify an action of that kind.
When a trainee in the probation service, who can be as young as 22, but no younger, coming in at the bottom point next year will receive £3,588, I wonder how the Home Office justifies paying police constables who are under the age of 21 and who embark upon a two-year probation period, £6,267, with a rent allowance of between £1,000 and £2,271 a year; or, if they are 22 and over, as they are in the probation service, a starting salary of £7,356, with a rent allowance of between £1,000 and £2,000. It is always invidious to attempt to suggest the value of the contribution of one group in society compared with another, but I want to suggest to your Lordships that the contribution which the probation service is making today is of supreme importance to the problems which we are facing.
Under the new Home Office scale, there is to be no increment at all in the second year, which means that a trainee who is appointed at the new bottom rate will be something like 25 per cent. worse off in the second

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year. It means, also, that we shall have on the same courses trainees appointed by the probation committees, trainees appointed under the old Home Office scheme and trainees appointed under the new scheme which comes into force next year. We shall have three groups, all doing the same training and attending the same lectures, with three different incomes which may vary to the extent of something like £1,100. I cannot remember such a nonsensical system.
Many of the probation officers will already be graduates. I notice that in their correspondence the Home Office tends to talk about students. We are not talking about students in the sense that the ordinary man in the street understands the term. We are talking not about students but about trainees. Unlike students, trainee probation officers pay tax; unlike students, trainee probation officers pay superannuation; and, unlike students, trainee probation officers compulsorily pay national insurance contributions. It means that some of the new intake, starting at the bottom point, will be earning about £6 a day after all these deductions.
I have many friends in the probation service; 45 years ago I was a probation officer in London. For some years I was vice-president of the national association, so perhaps I ought to declare that I have a lifelong interest in this matter. I know probation officers who, by virtue of the nature of the work, occasionally do a 12-hour day—and very often a 10-hour day. And because trainees are assigned to a probation officer they will have to work similar hours. Therefore £6 a day means that they will receive the princely sum of 60p to 70p an hour. You could not get a home help for that. You could not get anything in the way of help for that. It is a shocking state of affairs. Naturally, I ask myself why the Home Office have done this. I have spoken to an enormous number of people who I thought might be in the know, but they cannot tell me.
I do not want to take up a great deal of your Lordships' time tonight. I just want to paint the picture as I see it and leave it to my noble friends to seize upon other matters in order to complete the picture. The noble Lord, Lord Elton, said in a letter to me that 10,000 people applied for the 300 places on training courses. He said that there was no difficulty about getting people. I ask the noble Lord to be frank and honest about it. Are the Home Office saying that because there are nearly 4 million unemployed they can get anybody for next to nothing? This is how it seems to a good many of us: depress the starting salary because we can always get more people than we need. But for £3,588 can you get the kind of young person you need?
The noble Lord will, I know, remind me that a large number of these people are mature students and that they will earn £4,116 or £4,746. The Home Office have to take into account age and experience, as do the local probation committees, but we need a large number of young people in the probation service. There are many young delinquents. Young people have a better rapport with young delinquents than older people, who have none at all, sometimes. It is of supreme importance that we should cater for the young delinquent by having young probation officers. I hate to think that this situation has been brought
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about simply because there is a very wide field of choice. The choice which really matters is whether people are suitable and, if they are suitable, whether they will accept £3,588 or turn away and look for something else. I ask the Home Office to think very carefully about this.
I wish to quote from a letter written by the noble Lord. He will not take this personally; he has to put up with all this because he happens to be the Minister concerned. He knows that there is no venom in it as far as he is concerned. On 27th October the noble Lord wrote to me and said:
"The Home Secretary has now agreed that the new scale should be brought into operation for students … starting in 1983".
Can the noble Lord say from his own personal knowledge that the Home Secretary knows about this? I am not prepared to accept a piece of paper which has been sent to him telling him, "Of course he does". I doubt very much whether the Home Secretary knows about it. I say this because I have some knowledge of the Home Secretary. When I was vice-president I took the chair for him at an annual meeting of the National Association of Probation Officers.
The Home Secretary is a man with vision. Many of us do not like his politics but we pay tribute to his vision and to the fact that he wants to keep as many young people out of prison as possible. The Home Secretary wants to extend the non-custodial way of dealing with offenders and he knows better than most people in your Lordships' House that there is only one group of people who can do that: the probation officers. Nobody is going to tell me, except the Home Secretary himself, that he knows this is being done. I shall believe it when the Home Secretary says, "Yes, I knew about this and I approved it". I really do not feel that he does.
I hope that the noble Lord will not turn this down out of hand. I hope his advisers will not send a note to him and say, "Under no circumstances can this be done". If the Home Office are so certain that they are right, the noble Lord should accept my suggestion that the Home Office ought to be generous enough to say, "Let us have another think about this. We may not change our mind but we should be prepared to meet a number of people who are very well informed on the practical, not the theoretical side"—as must so often be the case in a Government department. I ask the noble Lord to say, "If you want to meet me, I shall be pleased to do so and I shall be prepared to receive a small number of people to talk further about the matter".
8.48 p.m.
Lord Wigoder: My Lords, my first task on behalf of the whole House is to thank the noble Lord, Lord Wells-Pestell, for raising this very important Question, and for doing it so forcefully and succinctly and in a manner which becomes the Member of either House of Parliament who knows more about the subject than any other.
It is quite unnecessary for me to discuss at any length the crucial role which probation officers play in our society. There are noble Lords who will want to comment upon one or two aspects. May I merely mention two which I personally have come across. The first relates to the courts, when sentence is about

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to be passed and a decision has to be made as to whether the convicted person is to be given a custodial sentence. At that stage the report of the probation officer is of vital importance. Secondly, although I have never served on the Parole Board I know many of its members, and I know well how much they are bound to rely upon the reports of a whole series of probation officers in coming to a decision which is absolutely crucial and which, if their decision is wrong, may have very serious consequences for society.
When I talk about the reports of probation officers, I do so because I know from personal experience that it is not simply the report which matters; it is the reliance that one places upon the individual who has prepared the report. It is one's belief that the probation officer is a person of real calibre who has practical experience of the world and upon whose judgment courts, parole boards and others can safely rely. It is for that reason that the present decision by the Home Office to deal with rates of pay in the way proposed is liable to lower the whole standard of recruitment into what I regard as a very important public service.
It is right, of course, that there should come into the probation service from universities a number of fresh-faced young people who have high ideals; if they are sometimes a little impractical, then one can understand that. But it is equally important that there should be persuaded to come into the probation service those who are a little older, a little more mature, and who may be married and have children—people who have some experience and knowledge of the world. Such people, if they are already in employment, will not be tempted into the vital job of probation officer if the Government's whole attitude is that which appears to be expressed by the new scales which the noble Lord, Lord Wells-Pestell, is querying this evening.
I accept that there is an argument these days for cost containment and that there is invariably talk about restraint on public expenditure. I fully recognise that anyone in your Lordships' House who talks on a particular subject always accepts that there is a need for such restraint in respect of even' topic other than the one which is being discussed that particular evening. However, I feel bound to say that if the Home Office feel compelled to work within a particular budget on this particular issue, I personally would sooner see a budget applied to the appointment of rather fewer probation officers of a really high calibre than an attempt, of the kind which is apparent at the moment, to retain the existing number, or increase it, at the risk of the calibre of the recruited persons being very much reduced as a result.
I can see nothing in the present proposals to encourage people of real calibre to enter the probation service. For that reason I agree with what was said by the noble Lord, Lord Wells-Pestell, that it is no answer to argue that on the present rates offered there are more than enough applicants for the job. There are more than enough applicants for any job in the present state of our society. When one is dealing with a role of this importance, the real problem is to secure applicants of a really high calibre.
For those reasons I look forward with the greatest of
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interest to hearing what the noble Lord the Minister has to say in answer to the points which have been raised already by the noble Lord, Lord Wells-Pestell, and others which will be raised in the course of this debate. I hope that the noble Lord the Minister will forgive me, when I say that I will look forward to hearing his reasons, if I am in fact looking forward to reading them in Hansard. I express my deep apologies to your Lordships for not being able to stay to hear the whole of this debate. If I were to do so. I should splutter infectiously over even more of your Lordships than I have done already during the course of this afternoon.
8.54 p.m.
Lord Elystan-Morgan: My Lords, the probation service has a crucial and unique role to play in our society. In the 100 years or so that probation has existed in our statute law, there has never been a stage, in my judgment, at which it was so essential for the probation service to enjoy the highest morale and also to be assured of the understanding and support of Her Majesty's Government.
I doubt whether any Member of your Lordships' House, with the sole exception of the noble Lord the Minister—who has the unenviable task of replying to this debate—was not moved to dismay and incredulity, as both my noble friend Lord Wells-Pestell and the noble Lord, Lord Wigoder, have already said, on learning of the Home Office decision to impose the savage cuts they propose making in respect of training grants. I too join the noble Lord, Lord Wigoder, in expressing the deep gratitude and indebtedness of this House to my noble friend Lord Wells-Pestell, both for initiating this debate and for the vigorous and fair way in which he presented his case. It stemmed from my noble friend's deep understanding of the significance of the probation service and of the problems with which it has to grapple. My noble friend's words were words of statesmanship and wisdom, and I feel very privileged, on behalf of my noble friends, to give the fullest support to the case he has articulated so skilfully and fairly. Indeed, he has dealt so devastatingly with such a number of matters of detail that there is very little left that one can say so far as the main thrust of his arguments is concerned. His arguments were wholly irrefutable.
The Government's proposals are indefensible. They are wildly inconsistent with their general statements in this connection. They are flagrantly unjust to the trainees concerned and, so far as society as a whole is concerned, they are irresponsible and dangerous. First, they are indefensible in that the Government, it seems, seek to justify their actions according to the law of supply and demand. My noble friend has already alluded to the correspondence which has passed between him and the noble Lord the Minister. Indeed, my noble friend has been good enough to circulate copies of this correspondence, which was always intended to be a public document. I quote from one of the passages in the letter from the noble Lord the Minister, in which he states:
"Many of the universities and polytechnics have received more applications than they could handle. Such a buoyant recruitment situation needs no financial inducement."

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Perhaps I may make the same point as the noble Lord, Lord Wigoder, that, of course, one would expect there to be a far greater number of applicants than those who are individually chosen for the 350 to 400 placements which are available. There has to be a ratio of 5 to 1 or 10 to 1 of applicants to persons chosen if one is to maintain the very high standards that the service has enjoyed in previous years. The figures for applications which were given in another place on 22nd March were, for 1980, 1,926; for 1981, 1,992. I am sure that the House will wish to hear from the noble Lord the Minister, when he replies, how different are the figures for 1982. Was the number of applicants double, treble, or ten times what it was in 1981? Or was it a similar number? If indeed there was a massive increase over 1981, why on earth did the Home Office see fit to advertise in the press for applicants in September of this year?
We ask the noble Lord the Minister, what criterion did the Government have in mind when imposing the 23 per cent. cuts in the rates? Is this a general figure that is to apply to trainees generally? Is it to apply to the police? This point was made devastatingly by my noble friend. Is it to be of general application? If so, do the Government intend to make a comprehensive announcement in respect of such a figure? Or was the 23 per cent. just a figure that was plucked arbitrarily out of the air? What does the Minister mean by the words "such a buoyant recruitment situation needs no financial inducement"? Does he intend to reduce the grants still further? Does he intend to abolish them altogether? Is that what he is saying? I am sure the House will want the most specific assurance in respect of that aspect.
My Lords, we say that the conduct of the Government is utterly inconsistent. The Government have been regularly making encouraging noises over the three and a half years of their life in respect of strengthening the probation service. They have also made the proud boast that no cuts they make will affect the field of law and order. Why did the Government advertise in September of this year, if they intend to dissuade a number of otherwise willing applicants from coming forward? This is a very strange inconsistency in a Government that seem to make such a fetish of thrift.
The question of hardship has already been dealt with very fully by my noble friend. May I make this one point. Let this House not think that all the hardships are of a financial nature. A very high percentage of those who successfully complete their courses still find themselves unemployed at the end of them. Figures were given in another place to show that at the end of last year over half the 430 who completed their courses were still unemployed. The hardships in relation to unemployment are well understood. Fewer and fewer persons are leaving the service; there is a much slower turnaround altogether. What I am sure we would wish to know from the Minister is whether a number of those who were rejected in 1981 had the patience, indeed the fortitude, to hold out and make further application in 1982, and how many of them were successful.
Let me make one general point. The probation service is invaluable in relation to the supervision it
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gives to persons under probation orders, but that is only a fraction of the work that it does. I have the figures only for the year 1978; I think they amply illustrate the point. The number of probation orders in that year was 26,000. The number of juvenile supervision orders was 17,000, shared of course with other authorities; the number of community service orders was 11,000. But the other work was also enormous, supervising prison welfare, day centres and hostels, being involved with over 15,000 children who are the subject of investigations in relation to custody, wardship and guardianship; and also, the point made by the noble Lord, Lord Wigoder, over 200,000 social inquiry reports prepared for the courts, reports which are utterly invaluable if the court is to be in a position to pass a just and proper sentence.
My Lords, the community has placed upon the shoulders of that small, select, dedicated band of people who comprise the probation service, a massive burden. Over the years the service has responded loyally and effectively to such demands. Over the last three years it has shown an impressive rise in productivity. The expectations of society in relation to the probation service will continue to rise. Those expectations can only be fulfilled if, among other things, the service can be guaranteed a steady flow of applicants of the very highest calibre. The Government's proposals threaten the very seed corn of that system.
We are staggered by the irresponsible shortsightedness of Her Majesty's Government in this matter. I join with my noble friend in urging the noble Lord the Minister, who is a humane and fair-minded gentleman, to give this matter his most urgent reconsideration. What profit be it to Government to show a relatively minuscule saving in their books where the price to be paid means placing at grave risk the whole future of an invaluable service that is so central to the protection and support of society?
9.5 p.m.
Lord Hunt: My Lords, I, too, should like to thank the noble Lord, Lord Wells-Pestell, for putting down this Unstarred Question. From a long association with the probation service over the past 25 years as chairman of the Parole Board, as president of the National Association of Probation Officers and since, I can confirm and endorse everything that has been said about the dedication of probation officers to their demanding work, and the skill with which they carry it out. They work long and unsocial hours. As the noble Lord, Lord Elystan-Morgan, has said, they have to deal with a perplexing range of problems demanding a wide diversity of skills, talents and resources. They sometimes have to cope with disturbed, difficult and occasionally dangerous clients.
Quite recently I have spent a day with two probation services, the Merseyside Service and the Oxfordshire Service. As always on such visits, I was struck once again, meeting probation trainees in probation offices and doing other work, by their quality and enthusiasm. I join with others in saying that it is quite essential that the calibre of the men and women entering the service should continue to be of the same high standard as it is at present. Indeed, if it were possible

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the aim should be to raise that standard even higher still, in order to cope with the increasing and increasingly difficult and demanding jobs that will be laid upon the service in the future.
My Lords, I should like to stress the importance of maintaining the ratio, quite apart from the quality, of the mature student entrant. I used to visit the Home Office courses in the Cromwell Road in the old days, and when I was there I was tremendously impressed by the wide range of experience from various walks of life which those students represented. I believe this to be of enormous value to the service. The termination of those courses caused a great deal of concern at the time, with the pendulum swinging too far towards youthfulness—intelligent, enthusiastic young men and women but lacking a wider perspective of life in the world beyond the universities.
The importance of maintaining a balance between youth and experience is self-evident. I illustrate my point briefly with a few figures. In 1981 the numbers of mature students placed on entry at the top of the trainee four point salary scale was 37 per cent. of the total. In 1982 that percentage had slipped to 29 per cent., and this, surely, must be a matter of some concern. To reduce the top trainee salary, albeit by only a small percentage—0·44 per cent.—is not exactly calculated to encourage the numbers of older students, those men and women in their thirties, and attract, let alone increase their numbers, people of the very highest calibre.
The next rung on the ladder, point three, amounted to 20 per cent. of the total entry in 1981. In 1982 it was 22 per cent. It is proposed to reduce the salary by 8 per cent., which merely reinforces my point. So, simply on numbers for the higher and more mature entries, I think it can be said that there is a reasonable balance between maturity and youth because, put together, the entries on the two higher rungs of the salary scale amounted to 57 per cent. in 1981, but that level had slipped to 51 per cent. in 1982. It is of great importance, both quality- and quantity-wise, not to allow it to slip any further.
I make two quick points in this connection. First, it is understandable that confidence in the service tends to be influenced in court by the age and maturity of the probation officer involved in the case. This can have implications for the sentence. Secondly, the readiness of volunteer members of the public to work with the probation service is again bound to be influenced by the factor of the age and maturity of the officers with whom they are working. I am stressing the importance I attach to the older and more mature student entry.
Like the noble Lord, Lord Wells-Pestell, and others, I also have concern for the trainees on the two lowest rungs of the trainee salary ladder—entries from the colleges and universities. In 1981 in aggregate those entering on these two lowest scales represented 43 per cent. of the total. In 1982 it was 49 per cent. The Home Office proposes to reduce the salaries by 23 per cent. at the lowest point of entry and 16 per cent. at the next entry point. Let us not forget that from these young entrants will come, for the large part, the senior probation managers of the future, the chief probation officers, deputy chiefs and the assistant chief probation
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officers. Therefore, quality at that level of entry is absolutely all-important.
I take the Home Office point about the need to reduce the present inequity in relation to other students following CQSW courses but without taking the probation option. However I think, as do others, that this is altogether too drastic a step. There are at present four points of entry on the salary scale for trainees and it has been suggested that the danger of discouraging entry of high calibre students from the colleges and universities at the lower end of the scale might be mitigated by reducing the number of entry points to three, eliminating the lowest rung on the ladder and making the lowest salary £4,116 instead of the proposed £3,588. This would still mean a reduction of about £450 from the present lowest student salary—that is, 10 per cent.—instead of the drastic reduction of 23 per cent. proposed by the Home Office. To do this would cost the Home Office a little more money but the all-important factor of the quality of the men and women in the probation service, to make it possible to shift the emphasis in future years to alternative treatment in the community, makes cheeseparing in this matter of the student entry salaries both shortsighted and inappropriate.
Finally, my questions to the Minister are these. Will he consider the suggestion of reducing the salary scale for a trainee probation officer from four to three points of entry, with the lowest salary on that presently applying to point three? Secondly, will he endorse the emphasis I have placed on maintaining the ratio and quality of more mature students, for the reasons I have given?
9.14 p.m.
Baroness Macleod of Borve: My Lords, after four weeks' absence from your Lordships' House because I was careless enough to trap a nerve in my back, I am unhappy that I should feel it vital to come here tonight and, in the light of my experience in the last 25 years of dealing with the probation service, speak in support of the noble Lord, Lord Wells-Pestell. I do not like speaking against the Government, and I certainly do not like speaking against the Minister, but I feel so strongly about this particular matter that I had to come here tonight.
We are discussing the salaries of one of the most important associations of officers in our society today. I say that with confidence after 25 years of experience—25 years mostly as chairman of a magistrates' court followed by four years on the Parole Board. In the magistrates' court—the lowest level of the judiciary—we dealt with a great number of people and it was our privilege to realise that if we put someone on probation he would be dealt with and looked after by people of the highest quality and the highest calibre, known well by each of us—people who would be able to put the person who had strayed off the path of law back on to that path again. In every case—and I cannot think of one where the probation staff let me or any other member of my 84-member bench down—we were able to rely on the guidance, the wisdom and the help of the probation staff. Indeed, that was so not only as regards the adult courts, because over 60 per cent. of the orders made on young

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people between the ages of 14 and 17 years are still supervised by probation officers.
As regards the Parole Board, the after-care that is so vitally necessary, as the noble Lord, Lord Hunt, has said, and so important to ex-prisoners, and which is supervised by qualified probation officers, is something for which, as we know, the prisoners themselves are grateful, and for which their parents are grateful. We as members of the Parole Board rely on those people to take care of the prisoners that we allow to go back into society.
We have recently spent a great deal of time discussing a new Criminal Justice Bill. As a result, a great many more highly-qualified and trained probation officers will be needed to implement it when it becomes an Act. I should like to ask my noble friend how many more probation officers will be in training to help to implement the Criminal Justice Act. We are told that at present about 300 people are on the intake for the probation service. We are also told that there is no shortage of people wanting and willing to come forward to be probation officers. But we must pay the rate for the job if we want dedicated and skilled people—people who care deeply and whose lives, I may say from my own experience, are changed when they become probation officers because they are working at all times of the day and night. The fact that there are so many people who still want to be probation officers is a great credit to the probation officer service.
As has already been pointed out, there are many older people who come forward with perhaps more experience of life in general than the 22-year olds. Those people are coming forward and they wish to be probation officers. Although we want quantity, we must have quality. I do not say that money speaks, but one has to live. The older people in the probation service very often have to keep their families; and the younger people do not want to be tied down by a very meagre salary.
The dedication and the long hours have to be paid for; the responsibility that society and the courts put upon the men and women who form the probation staff of our courts must be recognised by the Home Office. They are to be encouraged by the people who are administering justice in our courts. As one of those who do the administering, I say we could not possibly work our courts without their help. We rely on them implicitly; but their responsibility must be paid for. I have come here tonight specifically to urge the Minister to look at this again, because I cannot understand why this particular, vital part of our society has been treated in this way.
9.20 p.m.
Lord Allen of Abbeydale: My Lords, the number of speakers in the debate this evening is, I think, some indication itself of the importance which your Lordships attach to the probation service. Like other noble Lords, I am grateful to the noble Lord, Lord Wells-Pestell, for raising this issue tonight. I think that most of the relevant points have already been covered, and very well covered, in the speeches which have been made, but I thought that one brief contribution from the Cross-Benches might be in point, in part perhaps
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to demonstrate that the issues here go well outside party lines, if that needs saying after the speech of the noble Baroness.
However, I have grounds for concern going rather deeper than that. I was fortunate enough to have some relevant responsibility at a time when the service was undergoing a major reorganisation, and I was much concerned with the setting up of the establishment in the Cromwell Road to which the noble Lord, Lord Hunt has referred, for which we had such high hopes. I also recall that I was a little involved when the possibility was canvassed of the service going down the Scottish road of complete integration with the social services, a fate which I trust the service will continue to avoid.
The probation service gets its fair share of criticism and rather ill-considered and sometimes rather sneering comments, but, as it has now become, it is I think plain that, with the police and the prison services, it is already playing an essential part in tackling the problem of delinquency and all the complications that that involves, including the overcrowding of the prisons. The new duties that it has taken on in recent years are a further vital contribution to establishing in this country a concerted and coherent approach to these problems. I have in mind in particular the service's responsibilities in relation to parole and community service, and also its welfare responsibilities in the prisons. I am a little disappointed to find that the service itself seems to have some doubts about that particular activity.
There is more to come under new legislation, but if the service is to discharge the hopes placed in it, as has been said more than once this evening, it must attract suitable people. Whatever the feeling of commitment one looks for, pay is unfortunately something which cannot be ignored. I am sure that the noble Lord, Lord Wells-Pestell, will accept that there can obviously be no prospect of the probation service emulating the Olympian heights scaled by the police, who train their recruits after they have taken them on as police officers and who now pay them pretty handsomely. Nor, indeed, can the would-be probation officer hope during his long period of training to rival the remuneration of the prison officer during his much shorter period of training. All the same, the service must attract not only enough recruits but, as has been said before and will no doubt be said again, enough recruits of the right kind.
It is against that background that I should like to make three short points. The first is really to go along with the point that the noble Lord, Lord Hunt, emphasised, and that is the maintenance of the tradition that the service should be able to attract mature men and women with substantial experience in other walks of life—perhaps in industry; perhaps in voluntary social work; perhaps in the professions. The statistics which the noble Lord, Lord Hunt, gave us I found rather comforting as I personally had been under the subjective impression that the proportion of mature entrants taken in recent years was rather less than it used to be in the days when I had a more direct concern.
Be that as it may, as I understand it, it is not intended so to alter the scales of pay as to affect the

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conditions under which the older recruit can be taken in. However, it would be helpful if the Minister could confirm this and put on the record, if he feels able to do so, that the Government continue to attach great importance to maintaining an adequate proportion of new recruits with proven experience in other fields. I feel bound to add the comment that, although, as I understand it, there is no proposal for a major change in the scales of pay here, a salary of £5,500, or rather less, is not excessively attractive for a man in his 30s with a wife and family and mortgage commitments.
My second point is that I am under the impression that the responsible employers, the probation and after-care committees, do not at present seem to have very much to say in how the great majority of the students are selected for training before they are appointed to the service. I wonder whether it might not be desirable to try to devise some method, perhaps under the aegis of the negotiating machinery for pay and conditions, which would mean that appointment would no longer be left quite as much as it is to the schools and colleges which provide the academic training.
My third point is that I have not personally seen the correspondence to which reference has been made but I am well aware that there has been an abundance of applicants. I am also very conscious of the need for economy, although I note that we have gone as far as this in the debate without actually finding out how great the sums are which would be saved by the measures now proposed. It seems to me that, whatever statistical basis there may be for the cuts now contemplated, as the speeches have already shown, there is a real risk of action on these lines being interpreted as showing what the Government's attitude of mind is towards the service.
The fact that this action could be regarded as a kind of touchstone, as it were, is the main reason why so many noble Lords have put down their names to speak this evening and why some of the points legitimately raised in discussion have gone a little wide of the specific point raised in the Unstarred Question. There is a real danger that what is now being talked about could spread alarm and despondency at the very time that the Government need the goodwill of the service in developing their criminal justice plans.
Cuts in pay in this country are still a quite unusual phenomenon, and to single out this service could be regarded as a move calculated to discourage, rather than encourage, a service which should be bursting with growth and vitality in discharging its obligations to the courts, the prisons and the community. I wait with great interest to learn if the Minister can persuade us that, with all its risks, it is really worth while. I suspect from what we have heard so far that he may find it rather hard going.
9.31 p.m.
Baroness Ewart-Biggs: My Lords, I thank my noble friend Lord Wells-Pestell for raising this extremely important topic. When I looked at the list of speakers I realised that I should not be able to add anything to what would be said; I have no background in the probation service. Nevertheless, the very fact that I
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wanted to speak must prove that I, too, feel enormously seriously about this point. I also look forward greatly to hearing what the Minister has to say, though in view of the weight of opinion I am feeling rather sorry for him, fond though we are of him.
I wish to make three brief points. The first concerns what I consider to be an enormous inconsistency in the Government's attitude—and this was touched on by the noble Lord, Lord Allen. Indeed, I can think of no greater inconsistency on the part of the Government than, on the one hand, appearing to propogate a system which lays greater stress on the important role of probation officers while, at the same time, actually reducing the reward for those on whom this greater burden or responsibility will descend. Previous speakers have made that clear and one cannot say it often enough, because it looks as if the Government are trying to have it both ways. They appear to be committing themselves to shifting some of the weight from those responsible for custodial sentences to those responsible for probation and community service orders. What could be more contradictory than to move in that way—towards what many of us, I am happy to say, would regard as a more humane criminal justice system—while making the conditions less attractive for enticing the very people on whom the revised system will depend?
My second point concerns the importance of the service attracting the right kind of trainee, and much has been said about that. I cannot add anything to what has been said, but I feel I must speak of the need to achieve a broad-based entry, essential for working in the multi-coloured community that we are. I understand that the most likely way of enrolling coloured workers is through the ancillary grades. There must be general agreement about the need for tainee officers coming from the ethnic minorities, where they will be doing a great deal of their work. Many of these workers are married; they are the older trainees, with children to support. What possible prospect will there be of encouraging such moves by these workers if it means they have to accept, say, a considerable drop in salary?
My third point concerns the actual duties of a probation officer. It is important to spell out in categorical terms what the full measure of his responsibilities are, and consequently how much the community at large depends on having people of very high calibre brought into the service. The noble Baroness, Lady Macleod, referred to the essential after-care of prisoners, and I wish to state the different categories for whom probation officers are responsible.
First, the probation officer, assisted of course by the trainees, is responsible for the supervision of prisoners who are released before the end of their sentences under a parole system. Secondly, he is responsible during the unexpired half of the sentence for extended sentence prisoners released under a parole scheme or some other scheme. He is responsible for young prisoners, aged under 21 at the time of sentence, serving 18 months or more, who are released under a parole system or another system.
The probation officer is responsible for all borstal trainees during the two years after the date of their

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release, and he is responsible for all detention centre trainees during the 12 months after their release. Finally, he is also responsible for prisoners of under 21 years of age for 12 months after they have served sentences of less than 18 months. He is responsible for the after-care of all those categories of prisoners, and I believe that the sheer weight of his work emerges from those facts. Surely people who are able to undertake such extensive work should be brought in to help the Government with this new preventive aspect of the criminal justice system, in which we all very greatly support them.
I happened to be talking to a friend about this debate, and he said that the other day a probation officer told him that it was only very recently that his career had become respectable. Is it not possible that if we lower the reward for this vital, essential work, while the profession may remain respectable, the morale of the people in it might be seriously affected?
9.37 p.m.
Lord Donaldson of Kingsbridge: My Lords, like the noble Baroness, Lady Ewart-Biggs, I returned from dinner to take part in this debate not with any hope of adding arguments but with the intention of contributing a little abrasiveness, perhaps, to what I think has been an over-indulgent discussion of rather a monstrous, small, but very ugly event. Throughout the proceedings on the Criminal Justice Bill we were assured—and we asked about it again and again—that the Government appreciated the importance of the probation service, that they recognised that the probation service was the only defence that they had against the explosive dangers in their appalling prison situation, and that they understood the difficulties of getting the best people into the service. So I was absolutely astonished to read of this small, but monstrous, change that is being proposed. I believe it to be a bureaucratic idiosyncrasy. I do not believe that the Home Secretary, nor the noble Lord, Lord Elton, had anything at all to do with it. I think the noble Lord is stuck with it, and I am sorry for him; but I am not going to try to help him out of it because I think he ought to stick in it.
Nobody can pretend that if we pay less for something we shall get something that is better. Monetarists are also "Cobdenist" and "Brightist" to some extent, and they surely believe that the quality of what one gets depends on the price. It is only in relation to young trainees that the position is serious, because despite what my noble friend Lord Hunt said, a percentage of 0.44 does not represent a very serious change, whereas percentages of 23 and 16 do represent very serious changes. To suggest that it is reasonable to lower the price and to accept the inevitable result, which is to get less good trainees, seems to me absolutely incredible and against everything that the Government have been telling us during all the proceedings on the Criminal Justice Bill, and in fact over the last three or four years.
It is a very small item. We are told that we are taking in only 300 recruits a year in this way. I think that I should agree with the noble Baroness, Lady Macleod, who said that we ought to take in many more; but that is a separate point. Of those 300, how
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many will be on Grade 4, the lowest grade? Will it be 50, so that all this is about £50,000? Is that right? Can the noble Lord tell us what is the saving to the Treasury in this very disagreeable change? I should like to know the figure; but it seems to me that it is bound to be something under £100,000. Really, to treat the probation service in this way for a sum of that kind seems to be absolutely incredible.
I was very much disturbed by the reply—one which I did not see, but I gather that it was in a letter—that it was quite all right to do this because there was buoyant recruitment and no difficulty in getting applicants. This means that if you are an employer dealing with the unemployed, you should pay less than the unemployment pay, does it? What does it mean? It is a very odd and disagreeable statement and I do not think that we can pass it. I hope I am wrong in thinking that that is what the Government are saying. But, at second hand, that that is what it seems they said. I feel strongly that they should not have said that.
The noble Lord, Lord Elystan-Morgan, raised an interesting point. Why do they advertise if they have so many people? How much does that cost? It is very expensive to advertise in newspapers. This is the way the Government throw away money with one hand, even if it is a small sum, and try to save it at the expense of these innocent and harmless trainees.
There was a small point that I did not understand in the remarks by the noble Lord, Lord Allen of Abbeydale. He spoke as if my noble friend Lord Hunt had suggested that the number of older, more mature, recruits was not decreasing. In fact, Lord Hunt's figures showed that they are decreasing. I may have misunderstood the noble Lord, but the figures show that they are decreasing as a proportion of the whole.
Lord Allen of Abbeydale: My Lords, I said, or meant to say, that they were not decreasing as much as I had thought.
Lord Donaldson of Kingsbridge: My Lords, I will not say any more. I am very sorry for the noble Lord who has to answer this. I think it is very difficult and really quite impossible to put a proper face on it. It is such a petty affair and so very offensive to a body which we all enormously admire—having said which, I shall support, in principle with my political weight (which lessens as my physical weight grows) the spirit behind the noble Lord's Unstarred Question.
9.44 p.m.
Lord Foot: My Lords, Oscar Wilde once said, as I recall, that a man would need to have a heart of stone to be able to read the story of the death of Little Nell without laughing. In much the same sense, I would say to the House that one would need to have a heart of stone not to sympathise with the noble Lord who is going to reply to this debate. Indeed, at this late hour I do not want to try to contribute to the argument but I think the Unstarred Question which the noble Lord, Lord Wells-Pestell, has put raises another question; that is, whether what takes place in your Lordships' House and in the debates in this House really matter; because here tonight we have had a debate in which no single voice has been raised in support of the Govern-

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ment. Apart from the noble Baroness, Lady Macleod, the Benches opposite are empty. I must apologise to the noble Lord who is also sitting there. With the noble Baroness, he is the only exception. Not one voice has been raised in support of the Government. On the other hand, we have heard in this House tonight speeches coming from people with almost unique authority in fields of this kind, led by the noble Lord, Lord Wells-Pestell, himself probably the greatest authority upon the probation system in this country. He was followed by the noble Lords, Lord Wigoder and Lord Elystan-Morgan, both of them ornaments of the Bar, and with experience not only in the courts of this country but in the judicial function. Then we listened to the noble Lord, Lord Hunt, who must have an experience in penal matters second to none, followed by the noble Baroness, Lady Macleod, who is virtually the Magistrates' Association in person. Then we heard the noble Lord, Lord Allen of Abbeydale, with his unique experience in Whitehall. Then the noble Baroness, Lady Ewart-Biggs, said she was not an authority but went on to make a speech which shows that she is. Then we had the speech of the noble Lord, Lord Donaldson, who again has a unique experience
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in matters of penal reform. So we come down to me, and I have no authority at all.
Is it possible to ask the Minister, even at this late hour, not to get up in a minute and make a bland defence of the Government's position, but that he should acknowledge the weight of the authority which has been brought to bear in this debate upon this matter and the universal opinion that the Government have this wrong? Is it possible that the noble Lord can put aside the notes that he has in preparation to answer this debate, and say to the House that in view of the power and the force of the opinion which has been expressed in this House, he will take this matter away and that the Government will reconsider it after all? Is that not a reasonable response to expect in view of the course that this debate has taken?
I do not intend at this late hour to try and pursue the arguments in the matter. It is not only that, apart from the Minister, everybody who has spoken in this debate has taken an adverse view, but it is the fact that this is a matter which is fundamentally important to the administration of justice in this country. It is only right and proper that the Government and the Minister should take account of the very inmportant opinions that have been expressed.
9.48 p.m.
Lord Kagan: My Lords, I should like to make one point: the probation service needs people of the very highest calibre because the result of their work depends on the respect that they command in the prison service. As was said before, on occasions in the prison service they are not quite sure whether the probation service is a necessary or unnecessary intrusion. Surely the question of pay should be looked at in a different way. If one had a smaller number of probation officers but of a much higher calibre, they would co-opt from society suitable people to help them, as is happening experimentally now at Maidstone Prison. These are people who would be chosen because of their background. I have in mind retired school teachers, retired bank managers and people from the Churches. Indeed, the best training for the probation service is for someone to have been a parent, because most of us have gone through that period. The fact is that these people would not add to the financial burden. As far as I understand it, all they receive are just expenses for going. The noble Baroness, Lady Ewart-Biggs, said that the probation service has a responsibility. In my opinion, that responsibility should start not when a person leaves prison but when he enters it, and a relationship should be built up that is continuous; a link with society.
If one recruited from society people who help and if one person deals constantly with one prisoner from the day he goes to prison, who gets to know him and gains his confidence, perhaps helping him to get a job afterwards, that is a link which would be established (a) with society and (b) with his family; and it would cost the taxpayer very much less. In other words, I think that a very high calibre probation officer—perhaps fewer in number but people co-opted from society—should look after each prisoner on a continuous basis.
9.51 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, in rising, I should like first to acknowledge the lifelong interest of the noble Lord, Lord Wells-Pestell, in this subject. I would emphasise that I take everything he has said, and everything that others of your Lordships have said, very seriously and in good part.
The Question of the noble Lord, Lord Wells-Pestell, is addressed to a particular part of the probation service and to a particular policy aspect upon it. It is an important aspect, and his Question has given it a very proper prominence. He has also revealed, if I may say so, an obvious personal concern and insight which will be very welcome in the service itself. It is a good thing that work of such great social importance as that which is done by the probation service should be kept in view by your Lordships as a whole and not just by the Government. It does not get over-much publicity; it is not often praised; it is not even so widely understood as perhaps it deserves to be; and interest such as the noble Lord promotes must be beneficial to it.
That does not mean, of course, that I agree with everything he has said; and in some respects I think he
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is quite wrong. I shall now raise the solitary voice for which the noble Lord, Lord Foot, has been listening for so long, on behalf of the Government. At this point, I must say that we do share a basic premise, which is that the probation service makes an invaluable contribution to society by applying to the damaging influence of crime a constraining and compassionate authority which serves both to protect the innocent and on occasion to reform the criminal.
The noble Baroness, Lady Ewart-Biggs, has demonstrated to your Lordships the wide range of work done by the service, and the noble Lord, Lord Kagan, has explained their intimate importance to offenders. This is exceedingly important work. Many jobs can be done by the application only of particular skills. This job, by contrast, can be done only by the engagement of the whole personality. It is always exacting, often frustrating and never undemanding. It follows that the principal asset which anyone can bring to it is their whole personality. A suitable personality is the essential primary qualification. It can be rendered more effective by training, but training cannot supply it if it is wanting.
In all this, the probation service has much in common with my own old profession of teaching, and your Lordships will understand that I hold it, as do the Government, in very high regard. But that, the noble Lord, Lord Wells-Pestell, will say (and has said) is not borne out by the figures. Well, let us look at some of the figures. First, as to the overall size of the service, since we came into office in 1979 we have increased the number of probation officers by 429 to the present total of 5,600. That is an increase of 8 per cent. in probation officers; and at the same time there has been an increase of 30 per cent. in ancillary workers. These figures provide the context in which the matter to which the Question is addressed is set. That matter concerns potential recruits to the service and the way in which they are paid, not while they are in the service but while they are training.
The Home Office does not itself either recruit or employ probation officers. That is a function of probation committees. But the Home Office does pay a grant of 80 per cent. of the expenditure incurred by those committees. Moreover, to assist those committees, and as a measure of the importance of seeing that they have a sufficient number and range of trained applicants from which to select, the Home Office pays students intending to make the probation service their career. They do so while they are studying for the certificate of qualification in social work. This is made possible by the good offices of the Inner London Probation Committee, and I should like, in passing, to place on record our appreciation of their valuable help. These students are engaged on courses with a probation content validated by the Central Council for Education and Training in Social Work.
The number of them whose training is sponsored by the Home Office is determined each year by the rate at which existing officers are leaving the service, and the extent of any planned growth. Prior to 1970, the wastage rate was almost twice that of today and the demand for recruits was not matched by the number or quality of applicants. Accordingly, in 1970 the Home Secretary of the day introduced the present

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system. Instead of students being supported by grant, they were paid salaries which would be increased annually, broadly in step with those of serving probation officers.
I would not claim that this scheme alone has overcome past deficiencies; but there can be no doubt that the balance has changed to one where interest in training for the probation service is extremely buoyant—an evocative word to the noble Lord, Lord Donaldson, among others. Indeed, it exceeds present-day requirements by a very handsome margin. Although there has been continued growth in the total number of probation officers, the wastage rate of existing probation officers has fallen to barely 4 per cent. As a result, the number of probation students sponsored by the Home Office each year has fallen, also—to less than 300. Indeed, it has been a matter of concern to us that, even at the reduced rate, a number of students coming off courses have had to wait longer than we should have wished to obtain an appointment, though I am glad to say that a better balance is now being arrived at.
This reduction in the need to sponsor the training of students has meant, first, that the number of CQSW courses with a probation content validated by the Central Council for Education and Training in Social Work became out of proportion to our needs. This resulted in sponsorships being spread more thinly than was desirable. With only 300 places now needed or available, the idea of the noble Lord, Lord Wigoder—and I hope that he feels better tomorrow; it is normally a habit not to answer points raised by noble Lords who are not here at the end of the debate, but I feel that his excuse is so good and your Lordships' interest so keen that I should do so—of reducing entry further, in order to secure a higher standard, has implications for the viability of courses themselves.
Last year, after consultation with the probation service interests, the department joined the Central Council—if I may so call it, rather than going on with "for Education and Training in Social Work", because the acronym CCETSW is so inapposite—in a review of the distribution of its sponsorships. At that time, there were 74 courses at 57 institutions. As a result of this review, that was reduced to 41 courses at 31 institutions. This affords a modest degree of concentration, and that is to the general advantage of the students' training.
Secondly, the changed circumstances also caused us to question whether it was right to continue with the rather special salaried treatment of probation students. Home Office sponsored probation students in general were receiving their training in financial terms more favourable than those of other social work students who were grant-aided by the Department of Health and Social Security or by their local education authorities.
The question of supply and demand is relevant because the proof of the pudding is in the eating. Certainly there are differences in the way the Department of Health and Social Security treat different cases because they are need-related and up to the age of 25 are means-tested. But a respectable way of advertising a commodity is to provide a testimonial
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from the user. Therefore I should like to quote from a letter written in September of this year to the department from Somerset by an applicant for sponsorship, who said:
" I would much prefer Home Office sponsorship for two reasons".
The first does not concern this discussion.
"The second is financial. The difference between the two grants is approximately £3,000 a year. It would seem more appropriate that a younger candidate whose career is to be in social work should have the local education authority grant and that I. as a mature student committed to work in the probation service, should have the Home Office sponsorship".
I know that the noble Lord, Lord Hunt, will sympathise with that sentiment. I know also that the noble Lord, Lord Wells-Pestell, does not think that probation trainees should be regarded as students. I understand him, but I find it difficult to follow him. They study alongside other CQSW students, many of whom would be maintained by grant. Their periods of practical training, which in certain areas entitle them to an additional allowance, are not different in substance. Many other student groups—for example, medical students—are also required to participate in practical training.
Another consideration was the sheer weight of interest which these sponsorships aroused. There were a mere 300. As some of your Lordships have already mentioned, there were about 10,000 inquiries—roughly 33 inquiries for every available place. That may be regarded as a tenuous figure since it reflects only interest in a probation career and no more than that. The noble Lord, Lord Elystan-Morgan. said that what one wanted were the figures for commitment and that they ought to be at least five to one. Therefore I should add that the total number of firm applications for the 300 places was roughly 1,500, which is exactly five times the number of places available.
From the report of the central council clearing house on applications for CQSW courses in 1981, we also learn that probation was given as the choice of career in over 26 per cent. of all CQSW applications, although only 8 per cent. of the places received Home Office sponsorship. That is a measure, in three dimensions now, of the attractiveness of what was then being provided. In terms of supply and demand, therefore, it cannot be denied that things were heavily out of balance. Any special inducement to encourage students to embark on a career as a probation officer was no longer necessary. Moreover, the increasing cost of the service—your Lordships will remember that we had significantly increased its strength and therefore the cost of paying it—together with the absolute demands of our economic policy and the need to contain Government expenditure (from this Dispatch Box one has to do more than just nod to that, because it is of the stuff and reality of economic life) meant that we were looking in every field, not just in the field of the probation service, not just in the field of the Home Office but everywhere, for savings in unnecessary expenditure. Under those circumstances, the payment of a premium rate simply could not be justified.
Lord Donaldson of Kingsbridge: My Lords—
Lord Elton: The noble Lord has had his whack. I do not wish to be discourteous to him.
Lord Donaldson of Kingsbridge: If the noble Lord does not wish to give way, nobody can make him.
Lord Elton: The noble Lord has a very effective way of wringing my conscience. I shall give way.
Lord Donaldson of Kingsbridge: I am unable to follow the argument that because you have a lot of applications you are entitled to lower the price. If one advertises for the chairman of a national body, one quite often attracts thousands of applications; but one does not put down the price on that ground. I cannot follow the noble Lord's argument.
Lord Elton: My Lords, I am sorry that the noble Lord cannot follow the argument, because it is a fairly elementary one. Perhaps the noble Lord thinks it is too simplistic. The fact is that in the teeth of the most formidable difficulties, the Government are containing public expenditure in every aspect. As the noble Lord, Lord Wigoder, said earlier, in every debate people say that public expenditure should be contained, except in that area which is the subject of the debate. When one is running a department or bits of a department, every bit is put under the microscope for any suspicion of spending money that should not be spent. This was money that was more easily given up than money in other parts of the service, where there are people actually trained and serving.
We fully recognise the need to encourage applicants of acceptable quality to continue to come forward, and we know what importance the National Association of Probation Officers and other service organisations place on the present superannuation arrangements. We do not propose therefore to revert to the former system of student grants. We shall also continue to reimburse various travel and incidental expenses for the duration of the course; mostly two years. The present salary scale ranges from £4,551 to £5,529, with the starting point depending upon age and experience, the highest starting point being £5,283. Together with course fees, the cost to public funds for each student over the period of study is currently about £15,000.
The new salary scale for students starting in 1983 is £3,588, £4,116, £4,747 and £5,482, and the scale will be subject to review next year. There are four starting points, and to reduce them to three, as was suggested by the noble Lord, Lord Allen of Abbeydale, would also reduce the emphasis on maturity and experience, as well as the savings, and I am not tremendously attracted to that idea. These figures, taking account of the abolition of increments during training, represent reductions over the two-year period of study ranging from 23 per cent. at the bottom point of the scale to less than 0.5 per cent. at the top. They do not, as the noble Lord, Lord Elystan-Morgan, suggested—I expect in a slip of the tongue—amount to 23 per cent. overall; 23 per cent. is the very extreme reduction. At the bottom point of the scale proposed for 1983, I would say to the noble Lord, Lord Wells-Pestell, who did some alarming arithmetic as to what the money was worth, that after all deductions the daily rate for a five-day week works out at £10.70 and not, as he suggested, £6.
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If I may return to the overall picture, this gradation of reductions is important. It reflects the importance we attach—like the noble Lord, Lord Hunt—to attracting into the service mature students with experience of real life. I can confirm this attitude to the noble Lord, Lord Allen of Abbeydale. We also value what the noble Lord, Lord Wigoder, called "fresh-faced young students," but the mature students are among our most valuable recruits. They are also the people for whom reversion to student status can represent an extremely tough financial decision. I consider it proper that the reduction should be minimal in their case. It amounts to half a penny in the pound.
A further change is to break the previous link with pay increases for the probation service. We are dealing with students, and in future the link will be with grant payable to DHSS students. At the time of revision of the salary scale for 1983 this was increased by 4 per cent. In order that the net salary receipts for probation students should reflect that level of increase fairly, each point of the salary scale was uprated by 5.5 per cent. Quite by coincidence, that was the rate of increase applying to the bulk of main grade probation officers.
I make no silly claim that the figures I have given your Lordships represent a princely sum. They do not. But neither do I think, under the circumstances, they are totally unreasonable. In particular, I think they mark a shift in emphasis to the mature entrant, who, in common with the National Association of Probation Officers and the other service organisations, we believe to be among our most valuable recruits. The noble Lord, Lord Donaldson, guessed that this meant a saving of under £100,000. In fact it is two and a half times as much, a quarter of a million pounds. I do not think that, as a result of this change, we shall see a decline in the quality of recruits. Indeed, my officials are at present having discussions with chief probation officers whose staff participate with the universities and polytechnics in the selection procedures which a would-be applicant has to go through before an application may be made to the Home Office for sponsorship.
Lord Wells-Pestell: I am sorry to interrupt the noble Lord, but this is a point of information. How can he possibly save £250,000 when the reduction is going to be £1,000. It indicates that there are going to be 250 people on the lowest point. The noble Lord knows as well as I do that there will not be 250 people on the lowest point. They would have to be very young. How can you save £250,000? It cannot be done.
Lord Elton: My Lords, I will try and come back to that, if I may, because I mistrust my arithmetic at all times, but particularly when I am on my feet and speaking about something else.
The discussions I was referring to with the people who do the selection will be of interest to the noble Lord, Lord Allen of Abbeydale, as was his suggestion interesting to me. I think that, particularly with the emphasis we wish to give to mature students, the question of selection becomes one of increasing interest. But I can give no commitment other than to look at this. These discussions are about stiffening

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selection standards. The acid test must be not merely whether the applicant appears suitable for the training course, but whether he or she may confidently be regarded as suitable, with training, for a successful career as a probation officer, and, of course, whether he or she has the personality, which, as I said before, is the sine qua non of a successful probation officer.
I do realise that these changes may result in a significant reduction in the numbers of applicants for CQSW courses with a probation content, but some reduction we can well afford. To say, as the noble Lord, Lord Elystan-Morgan, does, that this places at grave risk the whole future of the service is really to exaggerate the case a little. In practical terms, I do not think it is a sound argument. In practical terms, I might say that if we were not to advertise the courses at all nobody would know that they existed and so there would not be any applications. The cost of advertising was halved this year, and the resultant recruits will enter the service in 1984–85.
Lord Elystan-Morgan: My Lords, may I ask—
Lord Elton: My Lords, I can answer the question, I think; it was £25,000.
Lord Elystan-Morgan: No, that was not the question, my Lords. I was merely going to ask the Minister for his comment on the fact that the number of applications in 1982 had fallen by 400 as compared with 1981 and 1980. So we are already on a downslide.
Lord Elton: My Lords, that may be. In fact I have undertaken to monitor the number of applicants and to keep the National Association of Probation Officers informed on what I find. I shall be quite happy to discuss with them what the findings are. I hope the noble Lord, Lord Wells-Pestell, will take that as an indication of my good intentions. I have other observations to make about the salary received. The department pays the employers' national insurance contributions and superannuation contributions of 12.2 per cent. and 11 per cent. respectively, and this adds to the savings achieved. I think I shall take those figures and work them out again, because I intend at the end of this debate to consider very carefully what has been said by your Lordships, and I will write to the noble Lord.
I have given close thought to the invitation which the noble Lord asked me to extend to him, if I may so put it, at the beginning of the debate. I am very chary
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of doing what he asked me to do because I think it would be to rouse false and illusory hopes in his bosom. On the other hand, the noble Lord will not mind my saying that he and I know each other very well, and I certainly often learn from my meetings with him. If I can avoid giving to your Lordships any idea that what I am holding out is a handful of pennies, or pounds, I am satisfied that the noble Lord and I do at least agree on what is being done and what are the consequences. If in that process he wishes to be supported by, let us say, two or three knowledgeable people, then, as somebody who knows him very well, I would not resist him coming to my door to tell me what he wants to tell me.
I hope I have put that in terms that will prevent your Lordships from rushing out with glad cries saying, "Government policy overturned", which your Lordships never expected to be in a position to do. What your Lordships can say is that this particular noble Lord is always willing to listen to wise heads when they wish to give him advice. He is not always in a position to take it.
I conclude by again thanking the noble Lord for precipitating what has been a most instructive evening—one which will do good to the probation service by making it realise that there are a lot of well-informed, experienced and senior people who are articulate, and with much experience of legislation, who regard their function, as I do, as one which is of crucial importance to what we are trying to do in our troubled society. They will be as grateful to him. as I am, for initiating this debate. I am going on, my Lords, because I know that the noble Lord wants to interrupt me and if I stop he will not be able to do so.
Lord Wells-Pestell: My Lords, I merely wanted to ask the noble Lord whether we can assume that either late tonight or first thing tomorrow morning the Secretary of State for the Home Department, Mr. Whitelaw, will be informed of what decision he has already made.
Lord Elton: My Lords, I am told that that is quite superfluous since he already knows, and knew a long time ago. I did not want to bring him into this. If the noble Lord will accept that, I shall nonetheless be happy to see him with two, or possibly three of his friends to discuss this matter further on the basis that I am not actually offering a concession, but I do want to hear more of what he has to say.
House adjourned at eighteen minutes past ten o'clock.