Lords Sitting of 3 June 1985

Preamble
Reassembling after the Spring Bank Holiday Recess the House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Gloucester.

Human Rights Conference, Ottawa
Lord Shinwell: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with progress at the conference on human rights in Ottawa.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, the review of the implementation of CSCE human rights provisions undertaken by the Ottawa meeting has just ended. This was a worthwhile exercise which gave us the chance to reiterate our concern at the continued abuse of human rights in the Soviet Union and Eastern Europe, and to call their representatives to account. The meeting has now moved on to discussion of new proposals to add to, or to refine, the existing provisions of the CSCE final act.
Lord Shinwell: My Lords, if that Answer means that the noble Baroness is not satisfied, I am not surprised. It follows the line of her statesmanlike speech on 23rd April, when many of my colleagues decided to give the Russians a chance to show what they could do. Now they have demonstrated what they cannot do and will not do. That is precisely what I predicted. I could put the usual question and ask what the Government are going to do about it; but what is the use? The Government can do nothing about it. They dare not do anything about it.
Indeed, the Russians have now decided to attack us for our failure to take advantage of the situation and to deal with human rights. That is what they are now doing. They have turned the tables on us. We have therefore to be very careful. We have to look around and to produce examples of how we deal with human rights in a civilised fashion in order to prevent other countries following the line of the Soviet Union.
Baroness Young: My Lords, I am not absolutely sure as to precisely the question that the noble Lord, Lord Shinwell, wished to raise with me. I can assure him that the meeting has seen discussions on a wide range of issues and that these have been complemented by very useful informal contacts between the delegations in the margins of the meeting.

Air Freight Facilities, Northern England
2.38 p.m.
Lord Gainford: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with existing facilities for air freight in the North of England.
Lord Brabazon of Tara: My Lords, air freight facilities in the North of England, as elsewhere, are provided by airlines, airports and freight forwarders in response to demand. The growth of mixed passenger-cargo operations and the developing network of passenger flights out of regional airports, particularly Manchester, make the outlook for freight movement out of these airports brighter.
Lord Gainford: My Lords, the information that my noble friend has given, for which I thank him, is very encouraging. Has he any information about the North-East of England, particularly the airports at Newcastle and Teesside?
Lord Brabazon of Tara: My Lords, I have no figures for freight from those two airports. But, as part of our liberalisation of airlinks with Continental countries my honourable friend is this week visiting Scandinavia, where he hopes to secure agreement that should also lead to further freight traffic.
Lord Bottomley: My Lords, is the noble Lord aware that the northern airports can handle much more freight traffic if they are only given the opportunity? Cannot the Government do anything to encourage the transfer of flights from other parts of the country, in particular to the North-East?
Lord Brabazon of Tara: My Lords, the provision of facilities must be a commercial decision for those involved. The Government have helped, and are helping, by encouraging deregulation of the industry and the liberalisation of air services and by providing capital expenditure allocations where justified. Primarily, however, it is a matter for customers themselves to decide where to fly from.
Lord Gisborough: My Lords, with particular regard to Teesside, can my noble friend say whether any reasonable requests for grant aid have been refused and what encouragement has been given for expansion at Teesside?
Lord Brabazon of Tara: My Lords, I am afraid that I do not have any details specifically about Teesside and about whether any grant aid has been refused. I shall have to look into that matter and write to my noble friend.
Lord Mountevans: My Lords, would the noble Lord care to comment on the fact that air freight into Heathrow is trunked to Newcastle for Customs clearance and then moved back to London? Will he examine the Customs side of the business and not the air freight side of the business, because it seems to me utterly irrational that freight should be trunked 300 miles north for clearance and then 300 miles back?
Lord Brabazon of Tara: Indeed, my Lords, it does seem irrational. I shall certainly look into that matter and let the noble Lord know my findings.

NHS Prescribing: Selected List
2.41 p.m.
Baroness Macleod of Borve: My Lords, I beg leave to ask the Question standing in my name on the Order Paper
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the working of the recent drug prescription regulations.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): Yes, my Lords, we have been impressed by the smoothness of the introduction of the selected list and recognise that this is in large part due to the efforts of doctors and pharmacists. We hope that it is now generally recognised that the selected list is a very sensible way of making better use of National Health Service resources without harming patients.
Baroness Macleod of Borve: My Lords, I thank my noble friend the Minister for that encouraging reply. Does she agree that it is likely that an amount in the region of £75,000 a year might be saved? If that is so, on what will that amount—I am sorry, I should have said £75 million—be spent?
Baroness Trumpington: My Lords, in answer to my noble friend, the savings will go to help fund other parts of the National Health Service. By reducing the drugs bill we have been able to increase the funds devoted to other aspects of health care.
Lord Taylor of Blackburn: My Lords, is the Minister aware that while she may be satisfied, the department may be satisfied and the Government may be satisfied, there are many patients who are not satisfied?
Baroness Trumpington: My Lords, patients who are worried about how the selected list affects their medication should discuss the matter with their doctor, who should be able to advise on any necessary change.
Lord Ennals: My Lords, bearing in mind the point just made by the noble Baroness, Lady Trumpington, is she not aware that some doctors are themselves very much in a quandary? Certainly some doctors who treat patients, particularly children, can find no satisfactory alternative at all to expectorants or to mucolytic drugs, both of which have been banned. Can the noble Baroness say what progress has been made in the establishment of the appeal system which it was announced would be introduced, and also in the review system for the black list?
Baroness Trumpington: My Lords, we accept the view that there may be very occasional cases when, for individual reasons, a patient needs a drug which is not generally available under the National Health Service. Therefore, on 16th April the Government's proposals for an appeal mechanism were announced. We are awaiting the BMA's response.
With regard to the noble Lord's question about the review committee, we hope that the review committee
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will be set up and members appointed in the next few weeks.
The Lord Bishop of Norwich: My Lords, is the Minister aware that there may be the suggestion of a little self-help among noble Lords, because many of us have links with the great hospitals? When we hear of a particular drug which is irreplaceable, which one of the very responsible hospitals has discovered over a fairly long period in the first 12 months of the operation of this list, would the noble Baroness allow us to bring that particular drug, by name, by letter before her?
Baroness Trumpington: My Lords, the list has been carefully compiled to meet the clinical needs of patients in hospitals as well as those being treated by general practitioners. In drawing up the list, advice has been taken from experts with experience of treating and prescribing for patients in hospital. There should be no need to depart from it.

Fishing: Falkland Islands Area
2.45 p.m.
Lord Kennet: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what they are doing about a possible multilateral fisheries agreement in the South Atlantic.
Baroness Young: My Lords, we continue to work actively for the establishment of a multilaterally-based fisheries conservation and management regime in the area around the Falkland Islands.
Lord Kennet: My Lords, can the Government tell the House what advice they have sought, and from whom, about when the different existing fish stocks in that area will be irremediably damaged by the present free-for-all?
Baroness Young: My Lords, we are actively developing our multilateral approach. We are working urgently to ensure that we have as full and complete a picture as possible of fishing activity around the Falklands and its long-term implications for fish stocks.
Lord Campbell of Croy: My Lords, is my noble friend aware that this must be about the only part of the world where there is now not a fisheries limit and a conservation regime? If the proposals for multilateral agreement do not make progress, will my noble friend consider introducing a 200-mile limit? Can my noble friend confirm that the Argentine Government are not likely to raise trouble over this, because there are reports that they are aware how much the Argentine fishing fleets would benefit?
Baroness Young: My Lords, the answer to the first part of my noble friend's question is of course, yes. We are very well aware of the situation; we have been aware of it for some time, and we have listened to representations from a number of sources. The answer

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to my noble friend's second question is that our consideration of a multilateral régime is still a hypothetical matter. In answer to my noble friend's third question about Argentine reactions, I believe that many people in Argentina understand that action to conserve and manage fisheries in the South-west Atlantic would be in the interests of all, for serious questions of conservation are involved. Beyond that I cannot comment.
Lord Cledwyn of Penrhos: My Lords, can the noble Baroness not go a little further and tell the House whether there is any reaction whatever from the Argentine Government following the indication of Her Majesty's Government that we would welcome the participation of the Argentine in multilateral talks? Secondly, is it not a fact that large foreign deep-sea trawlers are fishing Falkland waters extensively? What view do the Government take of this? Is this developing in a way which is endangering the fishing stocks, and is it a matter of concern to the Government and the people of the Falklands?
Baroness Young: My Lords, in answer to the first part of the noble Lord's question, I think that it would be wrong for me to go into details on the whole matter of our multilateral proposals. In answer to his second question, we are of course aware that a great many vessels are fishing around the Falklands, and it is for that reason and for other reasons which have been made known that we are actively pursuing this multilateral proposal.
Lord Davies of Leek: My Lords, can the noble Baroness tell me whether whaling will be brought into these multilateral agreements, because the modern factory ships are conducting a devastating spoliation of the whaling industry?
Baroness Young: My Lords, I do not think that anyone is concerned with whaling around the Falklands.
Lord Buxton of Alsa: My Lords, can my noble friend say whether the Government understand that the conservation of wildlife is a very vital economic and social issue, and not just a scientific and aesthetic one? Is it appreciated that, if the present operations continue, the wildlife that will attract and provide the potential for tourism—the penguins, the sealions, the fur seals, and so on—will all starve to death and be unable to feed their young, and there will then be no potential at all for tourism?
Baroness Young: My Lords, yes. Of course I understand the point that has been made by my noble friend, who is such an expert on this subject. It is for that reason that we are urgently pursuing our multilateral approach. I can confirm that a study is being undertaken to pool information available from all sources, and it is being pursued as a matter of urgency. We need to understand as well as we can how stocks are being affected by current levels of fishing activity.
Lord Cledwyn of Penrhos: My Lords, beyond telling us that the Government are pursuing the multilateral
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talks the noble Baroness has been unable so tar to answer my question about the progress that has been made in these multilateral talks. If the matter is one of sensitivity then I feel sure that the House will be prepared to accept that. But could the noble Baroness be a little more explicit and tell us that Her Majesty's Government are in fact making attempts to get the multilateral talks going? Is she in a position to tell us whether any approaches have been made to the Argentine with a view to getting them to take part in them?
Baroness Young: My Lords, the noble Lord has asked an important question. As he himself has said, this is a sensitive matter and I think it would not be appropriate for me to go into it in the House today. I can give the noble Lord an assurance, and I can give the House an assurance, that the Government are urgently pursuing this matter. We are aware of the strong feelings, not only of your Lordships' House but of another place and of outside conservation interests; but, as the noble Lord will appreciate, it is a sensitive question and it needs to be handled carefully.
Baroness Vickers: My Lords, may I ask my noble friend how many British ships are fishing in the area?
Baroness Young: My Lords, to the best of my knowledge there are no British ships fishing in the Falklands waters.
Lord Kennet: My Lords, would the noble Baroness not agree that it is really no good the Government continuing to stonewall on this matter? If there is a delicate situation in the Government's pursuit of this multilateral agreement, can the Government please tell us with what countries they are pursuing the multilateral agreement? If not, why not? Can they say whether the multilateral agreement will be modelled on any of the many existing multilateral fisheries agreements in the world? If they cannot answer those two simple questions, why not?
Baroness Young: My Lords, in the first place, we are not stonewalling. In the second place, it is self-evident that to be workable a multilateral regime should include as many as possible of the nations with an interest in fishing in the South-West Atlantic. In the third place, in regard to the question of other areas, there are of course waters where fishing regimes are in force without heavy policing, but these are areas over which sovereignty is not contested.
Lord Campbell of Croy: My Lords, is my noble friend aware, with reference to the point raised by my noble friend Lady Vickers, that these fisheries are not now really for British fleets, which are no longer equipped for very distant waters, but that if a fisheries regime were developed it would bring considerable finance and employment to the islanders, and not only the Falkland Islands but South Georgia?
Baroness Young: My Lords, I take entirely the point that my noble friend makes.
Lord Elwyn-Jones: My Lords, can the noble Baroness say who is doing the fishing now? Apparently

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we are not, and we cannot therefore be blamed. Does this not give additional strength to us in securing an agreement, if possible? Who is—I was going to use the ugly phrase "the nigger in the woodpile", but that is a very unfashionable observation.
Baroness Young: My Lords, in order of activity, the main countries fishing round the Falklands are the Soviet Union, Poland, Spain and Japan. The others, in alphabetical order, are Argentina, although not in the Falkland Islands protection zone, Brazil, Bulgaria, Denmark, the Federal Republic of Germany, Finland, the German Democratic Republic, Italy, Norway, Sweden, Taiwan and Urguay.
A noble Lord: My Lords, why are we not there?

Business
2.54 p.m.
The Earl of Swinton: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the Brussels soccer tragedy. This will be followed by my noble friend Lady Trumpington, who will, with the leave of the House, repeat a Statement on the social security review. This will be followed by my noble friend Lord Glenarthur, who will, again with the leave of the House, repeat a Statement on the Sri Lankan Tamils.

Local Government (Access to Information) Bill
The Bill, having been brought from the Commons on Friday, 24th May and printed pursuant to Standing Order 48, was read a first time.

Intoxicating Substances (Supply) Bill
Baroness Macleod of Borve: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Baroness Macleod of Borve.)
On Question, Motion agreed to.

Social Security Bill
2.56 p.m.
Baroness Trumpington: My Lords, I beg to move that this Bill be now read a second time. I ask your Lordships to fasten your seat belts as I take you on a magical mystery tour of the Social Security Bill. The issues involved are tremendously technical and complex, but I believe that the resulting benefits will do a great deal of good for a great many people.
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The principles underlying the Bill are central to the Government's broad philosophy. We are determined to improve job prospects, particularly for young people. We want to improve incentives by increasing the rewards of employment at modest levels of earnings. We need to ensure that all unnecessary artificial barriers to job mobility are removed. We believe in letting occupational pension and sick pay schemes operate effectively and efficiently. And we want, wherever possible, to give people maximum freedom of choice and the information they need to use it. These themes will recur as I explain the provisions in the Bill.
Before doing that, I should like to mention one path down which I hope we will not stray. I refer of course to the Government's Green Paper on the social security reviews published today, about which I will be repeating a Statement shortly. I hope therefore that your Lordships will agree that it would be unproductive to argue any points in the Bill which is before us today on the basis of what could only be a cursory glance at the Green Paper.
Let me return to the Bill, which contains a number of important measures. It covers occupational pensions, statutory sick pay, and ranges over much of the wide field of social security. I may from time to time depart from the strict sequence of clauses in order to discuss like subjects together, and I hope your Lordships will find this approach helpful.
Part I of the Bill is concerned with occupational pensions. We believe that occupational schemes have a vital role to play in providing decent levels of income in retirement. Over the years they have shown how they are able to develop to meet the particular, and often changing, needs of employees. They have demonstrated that they are sufficently flexible to fit themselves to the needs of their members. But sometimes it is not enough simply to rely on voluntary action by schemes to bring about improvements. Government then need to give a firm lead, and that is precisely what we are doing now.
The Social Security Act 1973 ensured that those who leave a scheme over the age of 26 with five years' service should have their occupational pension rights preserved. Up until then, these early leavers usually received only a refund of their own contributions. So the 1973 Act marked the first important step along the road to looking after the interests of the early leaver. But there was a problem. Nobody then expected the high inflation levels that occurred from the mid-1970s. The flaw in the preservation provisions is that pensions do not have to be increased during the time between the member leaving and the preserved pension coming into payment.
This means that many early leavers lose, and lose heavily. By the time their pension is paid its real value can have been eroded substantially by the effects of inflation. Not only is this manifestly unfair to individuals, but it is also damaging to the economic wellbeing of the country as a whole. Job mobility is essential to economic growth and prosperity, and it is therefore very much in the national interest that any artificial barriers to job mobility should be removed. It is clear that the poor deal received by many early leavers can be a powerful disincentive to job mobility.

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Clauses 1 and 2 with Schedule 1 will provide future early leavers with a new deal. First, the age limit of 26 for preservation will be removed. That means that those with five years' service in a scheme will in future have to have their pension rights preserved, no matter what their age.
Secondly, preserved pensions will have to be increased in line with prices up to a ceiling of 5 per cent. a year compound over the whole period from leaving up to the scheme's pension age. This will apply to all benefits over and above guaranteed minimum pensions that accrue from 1st January 1985 for anyone leaving a scheme after the Bill comes into effect. This is broadly what the Occupational Pensions Board recommended.
There will of course be a cost for these improvements. Obviously costs will vary from scheme to scheme, but it is estimated that on average it will be between 1 per cent. and 2 per cent. of payroll. We do not intend to spell out how costs must be met. That must be for schemes and employers because they are best placed to decide what suits them. But they will be able to increase contributions for employers and employees, or both. Or they can meet costs out of the investment yields they have been able to obtain during the favourable investment conditions that we have seen over the past few years. Or they could restructure schemes' benefits, for example by taking state pensions fully into account.
Thirdly, we shall give early leavers the right to a transfer. Anyone leaving a scheme after the Bill comes into force will be entitled to the actuarial cash equivalent of rights that have built up in the scheme instead of a preserved pension. This value can be used to buy rights in another occupational pension scheme. Or it can be used to buy one or more insurance policies from a company of the leaver's choice. Or it can be used for any other arrangement approved in regulations. This will allow transfers to be made to a personal pension when they are introduced. The right to take a transfer will remain open until one year before the person concerned reaches the scheme's pension age. Future early leavers will therefore have the choice of securing their benefit rights in the way that best suits them. We believe that this is an important extension of freedom to choose.
There are two consequential changes resulting from these improved transfer rights. We are introducing a new state scheme premium, called a transfer premium. Basically, guaranteed minimum pension rights can be transferred only to contracted-out schemes. So if a leaver wants to transfer to a scheme that is not contracted-out, his GMP rights under existing law would have to remain in the first scheme unless he chose to secure them with an insurance policy. But when the new premium is introduced, the first scheme could preserve the GMP; it could secure them with an insurance policy; or it could pay the transfer premium, which would buy the leaver's GMP rights back into the state scheme.
The last part of this early leaver jigsaw puzzle is a provision for schemes to lose liability when benefit rights are bought out with an insurance policy. The law on this whole area has been uncertain for some time and the Bill is intended to end that uncertainty.
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That is the early leaver package. Perhaps I can dwell here a moment and explain one important factor that we have had clearly in view when formulating these provisions. We have tried to strike the right balance between the needs of leavers and what schemes and employers can reasonably be expected to afford. We think we have got that balance just about right, not least because we have been criticised for going too far as well as for not going far enough. It is important that early leavers get a fair deal, but it is equally important that the solvency of schemes is not threatened. So we have set a reasonable standard of protection for future leavers, thus giving schemes the chance to make adequate advance financial provision. We intend to bring these improvements into effect from 1st January 1986. That is what my right honourable friend the Secretary of State announced last year, and we are determined to introduce these improvements as soon as we possibly can.
The other, equally important, parts of our occupational pension reforms are contained in Clause 3 and Schedule 2. They will ensure that scheme members will have sufficient information to enable them to safeguard their pension rights. An occupational pension can be the biggest single asset many people will ever have—worth even more than their homes. It must be right that basic information about their asset should be readily available to them. That is why we are taking powers in this Bill to set out in regulations the information which will have to be made available. The basic principles are contained in the Bill itself and the detailed disclosure requirements will be set out in the regulations. We shall be consulting fully on these very soon now. Our intention, though, is that members should get basic information about their rights and entitlements automatically. Other information about the way schemes are run and funds invested will be available to scheme members on request. Overall the detail will be sufficient to enable a qualified person acting on a member's behalf to form a complete picture of the scheme.
This will involve schemes in some cost, hut in general the level of information we shall require is what any well-run scheme, which conducts its affairs properly, would provide. So for properly run schemes the costs should be negligible, and of course the regulations will provide a measure of consumer protection.
The Bill also provides in Schedule 2 for a pension scheme register as a back-up to disclosure of information. I have to say that a number of people have expressed doubts about whether a register is needed. As my honourable friends have said in another place, we are open-minded on this issue. We are looking critically at whether a public register is needed in order to achieve the Government's aims and if so what form it should take. A decision will only be made in the light of a detailed evaluation of the various options open to us. In the meantime, the Bill gives us the necessary flexibility to follow the most appropriate course when the work of evaluation has been completed.
That covers the occupational pensions provisions in the Bill. I should now like to move away from this mysterious world into the I think slightly less obscure world of social security. First, national insurance contributions. Turning to Part II of the Bill, Clause 7

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implements the national insurance contribution changes that were announced by my right honourable friend the Chancellor of the Exchequer in his Budget Statement. These changes constitute a major part of our programme to promote employment, especially for young people, and to focus additional help on those people in work at the lower income levels.
There are three main elements in this provision. First, we propose a graduated system of contribution rates. At present employees contribute at a fixed percentage of 9 per cent. and employers at a fixed percentage of 10·45 per cent. These rates are at present paid on all earnings up to £265 a week once earnings reach £35·50 a week. From 6th October we intend that there should be new, reduced rates at the lower earnings levels. For employees there will be three rates—known in the Bill as brackets—at 5, 7 and 9 per cent. And for employers there will be four brackets. They will be 5, 7, 9 and 10·45 per cent. Let me explain how this will work. For employees, people earning between £35·50 and £54·99 will contribute at 5 per cent. on all their earnings. For those getting between £55 and £89·99, the contribution rate will be 7 per cent., again on all earnings. And those earning more than £90 will pay at 9 per cent.
Employers' contributions will be similar. They will pay at 5 per cent. if weekly earnings are between £35·50 and £54·99; at 7 per cent. if earnings are between £55 and £89·99; at 9 per cent. if they are between £90 and £129·99; and at 10·45 per cent. if they are £130 or more. So from October employees will pay lower contributions if they earn less than £90 a week. Employers will pay less for people earning below £130 a week.
The second element of this provision will abolish the upper earnings limit for employers' contributions. At the moment, earnings above that limit—which is currently £265 a week—do not attract contributions. From 6th October employers will pay the 10·45 per cent. rate on all earnings for people getting £130 a week or more. The effect of this will be that employers will pay higher contributions for anyone earning more than £265 a week.
The third element, also from 6th October, will reduce Class 2 flat-rate contributions, which are paid by the self-employed, by more than a quarter. The rate will go down from £4.75 to £3.50 a week. There will also be comparable reductions in the voluntry Class 3 contributions available to people who, for a variety of reasons, wish to improve their contribution record.
Taken together, these provisions form probably the most significant change in the structure of national insurance contributions since full earnings-related contributions were introduced. Even with the increased income from the abolition of the upper earnings limit for employers' contributions, these changes will cost £450 million in a full year. That is made up of an £80 million reduction in employers' contributions, a £270 million reduction in employees' contributions and a £100 million reduction in contributions from the self-employed.
This change will have important social and economic consequences. First, it will foster the creation of new jobs as part of what my right
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honourable friend the Chancellor has described as a Budget for jobs.
The cost of employing the 8.5 million workers earning less than £130 a week will reduce by as much as £3 a week. For people earning less than £55 a week, employers' contributions will be more than halved. This will make existing jobs more secure and provide an important stimulus to create new jobs in this part of the labour market. It will of course be of particular benefit for the job prospects of young people.
A second major effect will be to smooth out the cliff-edge effect of the present lower earnings limit of £35.50 a week. At the moment, people go from paying no national insurance contributions at all if they earn £35.49 a week to paying £3.20 if they earn £35.50—hardly an incentive situation, my Lords! From October, the person earning £35.50 would pay £1.78. The proposed changes will produce steps; but, as I have illustrated, they will be much less steep than the present cliff and this innovation has been generally and rightly welcomed by those with whom we have consulted.
A third, very important, effect will be to improve incentives by giving greater rewards for employment at modest earnings levels and provide the lower paid with higher take-home pay. We need here to consider the effect both of the contribution changes and the increases in tax allowances announced in the Budget. Again, some figures might be the best way of showing what I mean. For the 3.4 million people earning less than £90 a week the contribution changes will increase net income by between £1.10 and £2.20 a week. Taken with the tax changes, a young woman earning £50 a week would gain a total of £3.15 a week—a 6.3 per cent increase in take-home pay. A married man earning £80 a week would gain £3.33—an increase of 4.2 per cent. I think these examples give a good idea of the valuable help these people will get. Your Lordships may care to note that we shall take steps to ensure that the benefit rights of people who might otherwise be affected by these contribution changes are protected.
Lord Marsh: My Lords, may I ask the noble Baroness whether she has taken into account the effect that these changes will have on companies which suddenly find themselves faced with an annual increase in their wage costs, their labour costs, of anything up to £2 million or £3 million a year? On some large companies this will have virtually no effect while on others there will be vast effects.
Baroness Trumpington: My Lords, I think that the noble Lord is unfair to interrupt me in the middle of my speech. So far as I know he has not put his name down to speak during the debate. There is a gap in which he can make his point later.
Let me continue by saying that, lastly, on the subject of contributions, perhaps I can briefly mention Clause 8 which puts right a recently discovered defect in the powers of the Secretary of State to vary by regulations the special rate of national insurance contributions paid by registered dockworkers. It will regularise retrospectively what is already happening, and nobody will pay any more than they do now.
Part II of the Bill deals with a number of other social security items. Clauses 9 and 14 both relate to

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invalidity benefits. Clause 9 provides that where both invalidity allowance and the earnings-related additional component or guaranteed minimum pension are payable with invalidity or retirement pension, the invalidity allowance will be reduced by the amounts of the other increases. Let me explain why we are doing this. Invalidity allowance was introduced in 1971 specifically to help people who became disabled or chronically sick early in life and therefore had no opportunity to build up savings or pension rights for retirement. There are three rates of allowance, depending on the person's age at the onset of sickness. The younger you are when sickness begins, the higher the allowance.
The additional component, which began to build up from 1978 as part of the new pension arrangements, and the equivalent guaranteed minimum pension for those in occupational pension schemes, increase the basic retirement pension. So both are in fact savings for retirement. They serve broadly the same purpose as the invalidity allowance, and this has led to duplication of cover. Something like 375,000–44 per cent.—of the 850,000 invalidity pensioners that we expect there to be in November 1985 will be subject to some degree of offset. But for many the overlap will be small. I must make one thing very clear. At no stage will anyone suffer an actual cash loss. We shall have transitional arrangements that will ensure this.
The amount of offset will vary between a few pence and £7·50, which is the maximum rate of invalidity allowance. But to put this into proper perspective, at April 1983 only 1,100 people receiving the highest rate of invalidity allowance were also receiving an additional component which equalled or exceeded that amount and thus would lose the full £7·50. In general, the amounts are likely to be small and to be covered entirely by the November up-rating. In effect, invalidity pensioners will receive the higher of invalidity allowance and additional component or guaranteed minimum pension.
Clause 14 requires my right honourable friend the Secretary of State to restore, at this year's uprating, the 5 per cent. abatement of invalidity benefit made in 1980. That means that invalidity benefit rates will be increased by that 5 per cent. over and above the increase due this year to compensate for the rise in prices. This will also mean that in all but a few cases the increased rate will more than offset the effect of the abatement provided in Clause 9.
The combined effect of the invalidity package will be cost neutral in 1985–86, will save about £5 million in 1986–87, and around £20 million in 1987–88.
We now come to three provisions which all move us further along the road to achieving equal treatment for men and women. First, there is Clause 10. This will finally remove what is known as "the married women's half-test", and will extend pension rights to about 25,000 married women who are at present disadvantaged by the residual effects of that test. This will be effective from the date the European Community's equal treatment directive took effect, which was 22nd December 1984.
As soon as the legislation is passed we shall identify and contact all the married women who stand to gain, so that we can invite claims from them. The cost of
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this will be about £25 million in this financial year, gradually reducing in succeeding years until, by the end of the decade, it falls to nothing.
Clause 11 also extends equal treatment. From this November the rate of the non-contributory over-80s pension for married women will be increased. All married women who qualify for this special non-contributory pension at the lower rate, currently £12.85, will then be entitled to the standard rate, at present £21.50. This is, we believe, a worthwhile and long-overdue rationalisation of the non-contributory retirement pension scheme for pensioners over the age of 80. It will end an unfairness between elderly married women and other elderly people. The cost is very small—some £75,000 in 1985–86 and £225,000 in 1986–87, which will be the first full year of operation. But the low cost should not prevent its being welcomed as a useful improvement for these elderly people.
Clause 12 will provide equal treatment for male and female beneficiaries who claim dependency additions for their wives or husbands respectively. The European directive on equal treatment does not oblige us to provide equality here, but we nevertheless believe it is right for us to do so. We also wish to establish what can be seen as a more realistic test of dependency than the present rule which applies to the wives of male claimants to invalidity pension. That rule tapers the reduction in the adult dependency addition from earnings of £45 a week. We think it is unrealistic to have a figure that is so much higher than the dependency addition itself. It can mean that the so-called dependant is earning more than the beneficiary would be receiving in benefit for himself. The clause allows the change to be set out in regulations which will be subject to affirmative resolution procedures.
The intention is that the level should be set at the rate of unemployment benefit, which is currently £28.45 a week. That seems to us to be the right level. It is somewhat more generous than the existing rules applying to the husbands of women getting invalidity benefit, but less generous than that at present operating for wives of men getting invalidity benefit.
There are two other social security measures I should like to mention. Clause 13 makes a small but, I hope, very useful and welcome change to special hardship allowance. This allowance compensates people who have reduced earnings because of an accident at work. The rate of the allowance is based on the difference between present earnings and earnings in the claimant's regular occupation before the accident. One effect of this is that at present someone who had no regular occupation, such as a student doing vacation work, cannot qualify for the allowance. This clause enables regulations to be made to provide for this sort of case.
Clause 15 is concerned with a judgment made last year in your Lordships' House. It provides that, generally speaking, a person should not be regarded as entitled to benefit unless a claim has been made within the prescribed time limit. Until a House of Lords judgment on 22nd November 1984, successive Governments had always understood the law to mean precisely that. This clause restores the law on entitlement to what we always thought it had been before the judgment. That, then, is Part II of the Bill.

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Part III is all about statutory sick pay. SSP was introduced in April 1983. Broadly, people get sick pay from their employer rather than from the state for the first eight weeks of sickness.
This whole story resulted from the successful way in which occupational schemes have been introduced by employers to cover absence through sickness. As far back as 1974 some 80 per cent. of employees were covered by occupational sick pay and state benefit was no longer the major element of income during short spells of sickness. It was clear that there was duplication of effort and provision between the state and occupational schemes so, after lengthy consultations involving organisations representing employees and employers, we introduced SSP.
The scheme has now been running for over two years, and the evidence we have indicates that it is both popular and successful. Employers have successfully incorporated SSP into their payment systems and we have received very few complaints about its operation. As far as employees are concerned, we have clear evidence that the majority prefer SSP to the state sickness benefit scheme. They find it more convenient and prefer to get their money from their employer when they are ill.
As I have said, my Lords, SSP covers the first eight weeks of sickness. But it is important to realise that it does, in fact, cover 90 per cent. of all periods of sickness. By Clause 16 we now intend to build upon this successful start by taking the logical step of extending the scheme to cover periods of sickness up to 28 weeks from April 1986. This means that people who are sick for longer than eight weeks will continue to receive SSP from their employer until they qualify for invalidity benefit. It will be more straightforward than the present arrangement whereby a person goes from SSP to sickness benefit and then to invalidity benefit.
There will also be financial effects. The overall effect in net Exchequer terms is a saving of £25 million.
Clause 17 enables us to relieve employers of the cost of their share of national insurance contributions paid on SSP. That will mean a saving to them of up to £60 million a year, and we shall make that effective back to April this year. I am sure that this will be welcomed by employers, who have played a vital role in making the scheme such a success.
These provisions are a good illustration of our determination to ensure that benefits reach people in the most efficient way. And, by encouraging the spread of occupational schemes, we firmly believe that benefits will develop that are better fitted to the needs of employees.
Part IV contains, in Clauses 23 to 30, all the nuts and bolts that hold the Bill together and make it work, together with some minor provisions in Clauses 20 to 22. I do not propose to go into these now, although obviously I shall be happy to do so later if I am so asked.
My speech, despite its length, amounts to a very quick canter over the main provisions in the Bill. As I said when I began, it covers a wide range of technical and sometimes obscure subjects, but I hope that what
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I have said will be sufficient for your Lordships to be able to agree with me that it will help a great many people and do a great deal of good. I commend this Bill to your Lordships.
Moved, That the Bill be now read a second time.—(Baroness Trumpington.)
3.29 p.m.
Lord Stallard: My Lords, perhaps I may first congratulate the noble Baroness on what I consider to be her first major contribution on a Bill from the Dispatch Box, and on the way in which she cantered through this awful Bill which is now before us. In view of the Statement on the future of the social security and welfare system generally (which I had hoped would come before this debate started rather than in the middle of it) and the discussion that will inevitably take place on that Statement both here and in another place, I have the impression that this debate, and indeed this Bill, is a little unreal. It seems a wee bit out of place that we should be discussing this in view of the awful things that are about to descend on us in relation to the whole scheme. It is no surprise of course because I have been saying that on every social security debate here over the past few months and certainly since the reviews were announced.
It always appeared to me and to many others that the most sensible thing to do would be to await the outcome of the reviews, to have consultations and then sit down and discuss in a reasonable way permanent and acceptable legislation that would fit the new circumstances as need arose. That seems to be a more sensible approach than this "thinking-on-your-feet" legislation to which we have been treated over the past 12 months. It is almost like the Government standing up and saying, "What shall we do with this? Let us do this; and because we have a huge majority there is no limit to what we can do, so let us do it anyway". It is bad legislation which comes from that kind of approach, and I have said so on a number of occasions.
Where there is an urgent problem, I would accept that we must be flexible enough to deal with it immediately it arises. I first of all therefore looked in this Bill for what was urgently needed in the field of social security in advance of the reviews. I would have thought that the proposals regarding occupational pensions could wait for more detailed scrutiny of our existing schemes. In my view that could and should happen because a great deal of discussion is going on outside among professional bodies and others about the whole future of occupational schemes—how they should be funded, and so on—and we could have awaited the discussion that will inevitably take place after the reviews. I think it must be apparent that anything we do now, even on occupational pensions, will have to be fitted into any future legislation.
Another main aspect of the Bill deals with invalidity benefits and allowances. Could not such changes dealt with in this Bill have been dealt with in the same way as exactly the same changes were dealt with in relation to other abated benefits? I give as examples unemployment benefit, which was abated, and the invalidity allowance, which was also abated. They were dealt with in the ordinary way in the annual

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review, and there was no need for primary legislation then to do that. What is the need for primary legislation to do it now, unless there are other motives? I say there was no need for that and therefore there was no urgency so far as that is concerned. What is urgent about the need to extend the privatisation of statutory sick pay, particularly when the Government so fiercely resisted just such a proposal from their own supporters during the Committee stage of the original Bill which introduced the eight-week scheme?
There was a proposal from the Government side that the scheme should be extended to 28 weeks, and that the employers should be relieved of national insurance contributions. But the Minister in charge of the Bill fiercely resisted that proposition in Committee. The Government were defeated at that time but they then put on a very heavy Whip when the Bill was reported back in the other place, and they were able to defeat—for a whole number of reasons I shall not go into now—any attempt to increase the eight weeks to 28 weeks and to relieve the employers of their national insurance contributions. That was the present Government's stance—it was not the stance of any past Government—and therefore what is now so urgent that they are going to do this about-turn and introduce what they had so fiercely resisted not so very long ago?
I therefore say that after today's Statement which is about to be made, and in view of the possible legislation that is to follow, my view is that this Bill can have only two functions. First, it complies with Treasury demands for immediate savings this year: hence the unprecedented number of new clauses and amendments that were put down to this Bill in the other place, not during the Committee stage when they would normally have been put down, but during the Report stage. As we all know, both here and in the other place the rules of debate are different in the Report stage from those which obtain in the Committee stage. For instance, one can only speak once in a Report stage and therefore the debate is of necessity limited and the necessary scrutiny of those 40 or 47 new clauses or amendments that were put down by the Government was in my view inadequate. That was also the view of many Government supporters. It was a rushed attempt to comply with the Treasury's demands that savings be made: that was the first conclusion that I came to.
My second conclusion was that, with the spectre of this onslaught on the social security and welfare services hanging over us, this is really a paving Bill. It really only paves the way for what is to happen in the future. It supplies a number of sweeteners both to beneficiaries and employers but it paves the way for the things that are about to happen, not just to the benefits but to the whole basic principles of the social welfare system that have been built up over many years. I would not argue for one moment that it is perfect, and it most certainly needs review—I do not think any of us would deny that—but it is still the envy of countries throughout the world, and it is still a model for many similar welfare systems. Therefore in my view this Bill is an attempt to pave the way for the now widely-expected attacks on pensions and on other benefits.
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Taken by themsleves, as the noble Baroness has outlined, some of the provisions in this Bill could, with reservations and amendment, be acceptable. I certainly welcome, with reservations, the occupational pension motives—the question of transferability, job mobility, and so on. I would certainly welcome some of those changes. The noble Baroness mentioned the half test for married women and I would certainly welcome that. Many of us have raised that point in the past.
A number of things can be welcomed. The noble Baroness mentioned the over-80s, and we welcome what she said. We would welcome the extension of the earnings limits, although we would remind the noble Baroness and others of the Government's manifesto commitment in 1979 to abolish the earnings limit altogether. So although we welcome any extension of the earnings limit, I would have thought that Government Members, with their commitment to what is said in the manifesto (which has been so much stressed recently) would have been keen to take this opportunity to put into effect that manifesto undertaking. However, they have not; and we are grateful for small mercies.
I am also grateful for, and welcome, the extension to the pneumoconiosis Act. I cannot at this stage go into the statistics which the noble Baroness mentioned because I have not had a chance to study them but I shall study them and come back on them later.
However, in regard to Clause 22 I would ask her why is it necessary to introduce pensions for those particular individuals at this stage in the pension discussion? As I say, there are some things which are to be welcomed but only in the context of this Bill. If we take them in the context of the whole legislation that is about to come, then of course they take on a different character altogether.
I should like to say a few words about the main proposals, and I recognise they can only be a few words in view of the fact that I have only just heard the noble Baroness's opening remarks. I, together with many colleagues, have spent long hours into the night in another place discussing social security legislation—certainly in the early and middle '70s and into the '80s—and I always understood, though never accepted, that the Government's broad policy stance, which was made clear right from the start and which has been spelt out by all Secretaries of State and Ministers who have been involved in the work of the department ever since, was that any measures introduced had to be at nil cost. Indeed, savings had to be maximised. That is the policy stance they take on all these matters of social security, and any extra benefit or concession granted would only be at the expense of other parts of the service.
Here again we have that stance repeated by the Secretary of State in this present Bill, when in his opening remarks, dealing with Part III, he said that this would save money and staff in his department. That has been the basis for the statutory sick pay extension. So we know that. As I said, we understand it although we do not accept it. But I would challenge the Minister, because he went on to say in that opening remark, in col. 676 of Hansard of 26th November 1984 of the other place, after making his point about

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the savings to be effected by the expansion of privatisation and the sickness benefit scheme:
"The responses that we have received suggest that many employees prefer statutory sick pay to sickness benefit from the state".
And in press releases they included employers in that general welcome. It was welcome, they said.
Let me challenge the Minister to produce the evidence for that. It must be available in the department and it must therefore be available to her. Why can we not see the evidence which was obtained from employers and employees about the enthusiastic welcome for this new statutory sick pay? I have sought the views of workers and employers in my old constituency, and I am bound to say that I found little enthusiasm for the present scheme, let alone the proposed extension; and it is not difficult to understand why.
For example, during the past 18 months companies and small businesses have been forced to set up their own administrative arrangements to operate the statutory sick pay. This has of course increased their overheads and it must be obvious that individual companies cannot possibly achieve the same economies of scale available to a centralised body such as the DHSS. Because employers under the scheme are liable for the full cost of any wrongful payments, innocent or otherwise, they have to go through the costly process of keeping detailed records of absences and must justify all statutory sick payments. Even then, last December the DHSS stated that out of 180,000 cases checked, one in six—that is, 16 per cent.—made either overpayments or underpayments. So there is no cause there for enthusiasm from either side, and I fully understand the point that the noble Lord, Lord Marsh, made in that unfortunate interjection.
In a paper produced last year the Spastics Society said:
"In some instances, small firms have taken to paying their employees full pay during short periods of sickness. It is an easy way out—especially where low paid employees are concerned. Faced with the administrative headaches of SSP and the risk of paying penalties if they get the calculation wrong—or for that matter if the DHSS inspectors do not agree that genuine sickness was involved—it is often cheaper to take this course of action. In the short term, of course, this also works in the employees' favour".
I understand that.
"Unfortunately, if the sickness subsequently develops into a long term chronic illness, because the original sick time was never recorded, this can adversely affect the employee's qualification for the longer-term invalidity benefit, i.e., because there would be no record of an 8-week period of illness. If employers continue this practice for 28 weeks, this could have very serious implications for those long term sick employees who try to claim invalidity benefit".
So there is not a lot of enthusiasm coming from people who understand those aspects of the scheme itself and of the extension to it.
As we all know, the statutory sick pay rates are paid on the basis of salary, not of need, and therefore families with children are worse off under the SSP than under the national insurance sickness benefit. Taxation and national insurance contributions are also payable on the SSP, but not on national insurance sickness benefit. Indeed the Government Minister himself recognised this when he was opposing the
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extension to 28 weeks. I do not understand this volte face of the Minister who opposed this—it certainly suits me; it suits most of us in this debate—when he said:
"If we were to extend that period"
—eight weeks to 28 weeks; this is the Conservative Government Minister speaking—
"there would be problems with employees with families.
"There has already been much criticism of the sick pay scheme on the basis that it provides for flat rate payment, irrespective of family circumstances … That argument would be much reinforced if we were to carry the period beyond 28 weeks.".
That is what the Government Minister said, and I agree with him. I seldom agree with Government Ministers, but he was absolutely right. So where was this enthusiastic welcome that the Secretary of State found when he talked to employers and employees? I really think that we are entitled to some evidence of that kind of satisfaction, if indeed it exists.
In money terms—I was not able to take down the noble Baroness's statistics, and they are probably different from mine, anyway—it means that a married man earning £60 a week would receive £32.26 under the statutory sick pay scheme, as opposed to £44.50 under the national insurance sickness benefit. I am bound to say he will be enthusiastic if he has already had an £8 reduction in his benefit! So that, together with all the other anomalies that have been exposed under the existing eight weeks' scheme and the proposal to extend privatisation to 28 weeks, will in my view only exacerbate the problems that already exist.
The Spastics Society, to whom I am grateful because they produced last year the excellent paper I have mentioned—I dare say most Members have read it—said in another part of their paper:
"Since most ordinary illnesses such as severe colds, flu and other viruses—are fairly shortlived, it is likely to be the more serious illnesses which last for up to, or more than, 28 weeks. In consequence employers are, more than ever, likely to discriminate against people with frequent sick records".
Similarly, disability is often mistakenly equated with poor health and the possibility of frequent absences. Trades unions have already noted an increase in employers monitoring sickness records, which underlies the preoccupation with past health records of prospective employees. The rate of unemployment among disabled people is disproportionately higher than that for other able-bodied job seekers, and the 28-week extension will do little to improve the situation.
Indeed, the chairman of the National Federation of Self-Employed and Small Businesses has already gone on record as saying that employers and the specialist mono-businesses will be viewing disabled applicants with a very unfavourable eye. I do not think I need say much more about that sickness scheme, but I have doubts about the enthusiasm. If I needed any more arguments—I do not think I do—I would ask the noble Baroness to consider the fact that in this Bill the Secretary of State is advancing the concession on employers' contributions to the current year, instead of waiting until the operation of the scheme next year; and that is surely an attempt to sweeten the pill that I have been discussing.

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So on to the invalidity pension. The proposal to restore the 5 per cent. abatement to IPB, the invalidity pension benefit, has been welcomed in some quarters, and I can understand that. But I personally see no case for congratulating the Government on restoring a cut which should never have been made in the first place. I can recall the long arguments that we had during the Committee stage of the original Bill when this 5 per cent. cut was made. It was made then, it was said, in lieu of taxation. These benefits were to be taxed. It was the Government's intention to introduce a tax scheme dealing with invalidity benefits and this benefit was to be abated. That was a posh word for cut. It was to be reduced by 5 per cent. in advance of that abatement. The Government certainly pledged themselves on many occasions—and there are a number of parliamentary replies to questions that I could quote if I had time—to bring in this taxation scheme for those benefits, but they never did.
As I said before, the restoration could have been made at any time. It did not need primary legislation. It needed only something in the annual up-rating, like the other abated benefits had already had. So we are entitled to query why it is in the Bill. The Government are surely admitting that no tax scheme is possible for this benefit. Certainly, to introduce a scheme to tax people who are already below the tax threshold is understandably difficult, if not impossible. The Government have now admitted this and they are therefore proposing to give back this invalidity benefit.
Instead of just mentioning statistics about how much it will mean, taking Clauses 9, 10 and 11 into consideration, there is a justifiable argument for making retrospective compensation to all those people who have lost the 5 per cent. benefit, to which they would have been entitled if it had not been abated. That should now be given back to them in ordinary justice. If the benefit was cut allegedly because of the introduction of a tax scheme which can now no longer be implemented, it can be restored. I should like to ask the noble Baroness to consider at what stage of the Bill she will recommend the retrospective payment of that cut.
I have not said anything about the occupational pension proposals, though I should love to do so, because, as the recipient of a small deferred—certainly not transferred—pension it might be thought that I have some interest to declare, which might be true. So I have avoided saying too much about that, but I shall certainly be extremely interested in the outcome.
I should like to conclude by mentioning something to which I referred earlier, which I consider to be urgent and just, and which could have been included in this Bill since this is the only vehicle that there is. I refer to the invalid care allowance and the omission of married and cohabiting women from entitlement to that benefit. We have deployed arguments on this in committees for many years, and I supported the Spastics Society in its campaign to get the invalid care allowance paid to married women and those other categories. I hoped that the Secretary of State could have put that omission right in this Bill. It would have been a justifiable urgent step on which to amend any Bill. So I hope to be able to return to this and other matters at later stages of the Bill, but for the time being I shall certainly read the record of this debate today.

Brussels Football Violence
3.54 p.m.
The Lord President of the Council (Viscount Whitelaw): My Lords, with permission, I shall now repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, Mr. Speaker, I shall make a Statement about the events at the European Cup Final in Brussels last week and the measures which are being put in hand in this country to deal with football violence.
"Last Wednesday television viewers throughout Britain and the world witnessed the appalling scenes of violence at the European Cup Final in Brussels which resulted in 38 deaths and a much larger number of injuries. Twenty-seven people are still in hospital. I know that the whole House will share the nation's profound sympathy for the bereaved and injured, and the sense of outrage and shame at the behaviour of some of our citizens which led to the tragedy. The House will also wish to associate itself with the message of sorrow and condolence sent by Her Majesty the Queen to President Pertini of Italy and King Baudouin of Belgium. I have sent similar messages on behalf of the Government to Signor Craxi, M. Martens and President Mitterrand. The immediate contribution which we have announced of £250,000 for the families of the victims is an expression of our deep sympathy and support for those involved.
"The Belgian authorities and UEFA are conducting formal inquiries into the arrangements for the match and into the disaster. They will no doubt report on the extent to which the internationally agreed guidelines and precautions for spectator safety were followed. We cannot prejudge the outcome of those inquiries. But we have to recognise that there has been a terrible record of violence at European football matches in which I regret to say that English supporters have played a large part over many years.
"In these circumstances the Government welcomed the initial decision of the Football Association to withdraw English clubs from participation in European competitions next season, and we fully understand the subsequent decision of UEFA to ban English clubs from European competition for an indefinite period and we believe it to be right. This withdrawal gives English football authorities the opportunity to introduce effective measures to combat violence and to convince other countries that they have done so.
"I was able to have discussions last week with several people including the chairman and secretary of the Football Association who returned immediately from Mexico after receiving news of the tragedy; the chairman of Liverpool Football Club; my honourable friend the Parliamentary Secretary, Department of Employment, who happened to be present at the match and was an eye witness to the events; and a number of football correspondents who were also present at this and similar occasions in the past.

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"The following measures will be taken or are already in hand to put our own house in order.
"First, we shall introduce as soon as possible legislation similar to that contained in the Criminal Justice (Scotland) Act of 1980. That Act makes it an offence to be drunk or to possess alcohol on football coaches, on entry to grounds and in most areas of grounds. It also makes it an offence to be in possession of containers which could be used as missiles. Subject to discussions through the usual channels, it is our intention to have this legislation on the statute book by the Summer Recess, in time for the coming football season.
"Secondly, we shall proceed next Session with the legislation envisaged in the Government's White Paper on the Review of Public Order. The proposals on assemblies in the open air will considerably strengthen the powers available to the police to guard against the risk of disorder. Wherever they have reason to expect disorder at a football match the police will, in effect, be able to limit the gate and inpose other conditions. Under this provision, the police will be able to stipulate whatever steps they judge necessary to minimise the risk of disorder.
"Thirdly, Mr. Justice Popplewell will continue with his inquiry into the events at Bradford City and Birmingham football grounds on 11th May. His terms of reference are already wide enough to allow any lessons learned from Brussels to be taken into account. I understand that Mr. Justice Popplewell hopes to submit an interim report before the beginning of next season.
"Fourthly, my right honourable friend has set in hand the procedure for designating under the Safety of Sports Grounds Act all clubs in the Third and Fourth Divisions. We have, in addition, agreed with the football authorities on a number of measures including the acceleration of the introduction of closed circuit television, with the help of the Football Trust. I have been informed today that the trust is proposing to allocate £500,000 for this purpose as a first step. This would give cover in over 30 grounds in addition to the 11 in which experiments are already taking place.
"Events at Brussels last week have, however, made it clear that more is now needed. I shall be discussing urgently with the football authorities proposals for the introduction of a practical scheme of membership cards, either on a club or national basis; proposals for far more all-ticket matches; stricter controls, or in some cases a ban, on visiting spectators.
"I recognise that such measures would mean a radical change in the way in which football is conducted in this country. But radical change is needed if football is to survive as a spectator sport.
"Fifthly, in parallel with our own action, we shall continue to co-operate in developing international measures to deal with hooliganism. Next week, my honourable friend the Minister for Sport will be attending a meeting of European Ministers for that purpose.
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"In the meantime, we are anxious to give the Brussels authorities every possible assistance in bringing to justice and dealing appropriately with people from this country who have committed offences in connection with last Wednesday's match.
"My right honourable friend the Home Secretary has sent a message to the Belgian Minister of the Interior offering the assistance and co-operation of British police forces. The Merseyside Police and the Metropolitan Police are examining television film closely to see if they can identify those responsible for last Wednesday's violence.
"We also want to do everything within our power to remove any possible difficulty in the way of any charges the Belgian authorities may decide to bring. Arrangements already exist between the United Kingdom and Belgium for the extradition of those accused of serious offences of violence, such as murder, manslaughter, wounding or serious assault. If the Belgian authorities were to seek the extradition of someone accused of such an offence, we should naturally give them every assistance to meet our requirements on evidence.
"One disincentive for the Belgian authorities may be that it is less trouble simply to expel Britons who may have committed offences rather than to prosecute and sentence them appropriately. We intend to offer the Belgians the opportunity, in accordance with the Repatriation of Prisoners Act, of removal to prison in this country of anyone who may be given a prison sentence in Belgium.
"Mr. Speaker, I hope that last Wednesday's sickening events will unite all decent people in helping to eradicate hooliganism. To curb violence requires effort and commitment from us all. If English clubs are to play football in Europe again, they can do so only when their good name, and that of their followers and supporters, has been restored."
My Lords, that concludes the Statement.
4.4 p.m.
Lord Cledwyn of Penrhos: My Lords, we are all grateful to the noble Viscount for repeating that important Statement. As it says, we are all conscious of a sense of shame, anger and sorrow after last Wednesday's shocking events in Brussels. We must realise that not only the football authorities and the Government but all of us share the weight of responsibility for what happened. We join with the Government in offering our deepest sympathy to the families and friends of those who were killed or injured.
The Brussels tragedy was the gravest of a series of vicious outbreaks of violence in and around football matches in this country and abroad. It must be a matter of regret that no firm action was taken before, in the light of, for instance, the Luton experience and following the clear pronouncements in the review of public order law; for example, on restricting the availability of alcohol. We therefore welcome the decision announced in the Statement on the sale of alcohol and on the introduction of future legislation.

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We welcome the further measures outlined in the Statement, but we will obviously wish to consider them in greater detail later. We shall need to examine not only this and other outbreaks of violence but also what is to explain these recurring, grave breaches of law and order which are threatening our society.
Can the noble Viscount say whether the measures proposed will require an increase in the strength of police forces in this country? On the face of it, it seems that the proposals will add to the duties of the police, who are already very hard pressed. Can the noble Viscount further say whether the Government propose to release part of the money which they receive by way of tax on football pools to help the poorer football clubs put their house in order, as the Government wish?
I recognise the importance of Mr. Justice Popplewell's inquiry, to which the noble Viscount referred when he repeated the Statement. As a final point, can the noble Viscount say whether the Government have any further proposals for an inquiry to examine longer-term measures to deal with this problem and to study the root causes of not only soccer hooliganism but also violence in other areas of society to which soccer hooliganism is inevitably related, especially among the young people of our country?
Lord Diamond: My Lords, perhaps I may preface my remarks in response to this Statement with a very short tribute to a close friend and very distinguished politician who was a member of my party who passed away yesterday. I refer to Lord George-Brown. He was a close friend and your Lordships will therefore forgive me for taking up the time of the House to express my profound admiration for a man of his great intellect, his great capacity, and his warm friendship.
Lord George-Brown was able to make contact up and down the country with millions of people who will sorely regret his death. He was a distinguished statesman, a great trade unionist, a Cabinet Minister, a deputy Prime Minister, and a deputy leader of the Labour Party. I thought your Lordships would therefore permit me to say how much I hope that his family will derive some satisfaction from our expression of sympathy in bearing this unhappy and tragic event.
I turn to the Statement and express my thanks to the noble Viscount for repeating what is a very important Statement on a very tragic occasion. We on these Benches naturally wish to express our sympathy to the bereaved families and to the authorities of all kinds in all the countries involved—government authorities, police authorities, and those responsible for organising the games. We especially want to offer our sympathy to lovers of football all the world over.
What has happened is a tragedy for our nation. As your Lordships will have seen on the television screens, it is our people who have committed these heinous crimes of premeditated, uncontrolled violence. It is no excuse that they did not necessarily intend the result of their actions. This is the kind of tragedy that is liable to happen if people behave in that sort of way.
The present moment is not the time for either recrimination or attempting to apportion blame. It is
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a moment to unite on the single objective of determining that such a thing will never happen again. We accept therefore the need for the legislation mentioned in the Statement, which we will consider carefully and co-operatively. We accept also the need for immediate action as there described.
There should be a dual approach, but the Government appear to have only a one-sided approach. We should certainly look at the effects and how they may be controlled and limited, but we must surely look also at the causes. I find precious little in the Statement to indicate an endeavour by the Government to ascertain what are the causes. Why do such incidents happen in our nation? We all know our fellow members of this nation and we know, too, how unnatural it is for them to behave in this way. Why does it happen? We must know whether there are parental, domestic, social, psychological or environmental causes—situations which contribute to this uncontrolled show of violence on this and similar occasions. We must know whether those young people who find themselves excluded from our accepted society find themselves driven to join the society of the rejected and even endeavour to shine in the unusual morality of that society.
We must know these things so that we can get at the root causes and prevent this violence showing itself in other forms if we control it in football. What are the Government proposing to do about that? Are they proposing to set up a deep inquiry on that profound issue? Are they proposing to set up another inquiry on the way people behave as a crowd and on mob psychology? Why do people who normally behave rationally, behave totally irrationally when they are members of a group? For example, why has this happened not only in this country but in a country where one would normally accept that self-discipline is of a very high order? I refer to China and the outburst that occurred there. That may indicate that the problem is much more widespread than among British football fans alone. Therefore, I hope that the Government will set up at least two deep inquiries so that we may know whether or not we are dealing only with what is called the "British disease".
Viscount Whitelaw: My Lords, I am grateful to the noble Lords, Lord Cledwyn and Lord Diamond, for their response to the Statement. Perhaps I should say at the start to the noble Lord, Lord Diamond, that I am sure my noble friends on this side of the House would like to be associated with what he said about his noble friend Lord George-Brown.
I spent many years in another place with Lord George-Brown and, like many other Members there, I both enjoyed his robustness and frequently felt the strength of his tongue and invective against me—something which was not unknown for everyone. Nevertheless, that did not in any way detract from the feeling that he was a very strong and colourful character of the sort that we are frequently told we ought to have more of in British politics; at least, that is what we are told. At the same time, no one could deny his outstanding loyalty to his country and the strength of feeling that he had for it. I am sure the whole House will wish to be associated with that particular expression.

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The noble Lords, Lord Cledwyn and Lord Diamond, referred to the feelings of shame, anger and sorrow that have been widely expressed in this country since the affair of last Wednesday. They both—and I am grateful to them for it—expressed their deepest sympathy with the families and the bereaved and joined with the Government in doing that. Both noble Lords also welcomed the decision on future legislation on the sale of alcohol. Both noble Lords will appreciate, as will the House, the importance of seeking to get this legislation through before the start of the next football season. That is why the Government have undertaken to have discussions through the usual channels in the hope that an agreed form of legislation can be produced which can be quickly passed through another place and this House.
I am grateful, too, for the welcome given by both noble Lords to the other measures. The noble Lord, Lord Cledwyn, asked whether some of these measures would lead to an increase in the police forces in this country. It is seldom that I can return to my old problems of Home Secretary; but perhaps I am entitled to do so on this occasion for once and to say that it is reasonable for me to point out that we now have 12,000 more policemen in England and Wales than we had in 1979. Perhaps I may be permitted to add that I had some part to play in achieving that. It is important that we recognise the importance of that increase. Whether the measures will need more than that is very difficult to say, but clearly that is a matter for my right honourable friend the Home Secretary.
As regards money from the football pools, I simply say this, particularly in the presence of the noble Lord, Lord Aberdare, who is chairman of the Football Trust and who has occupied that position with such distinction. It should be remembered that already money through that channel goes to the Football Trust and therefore to the various clubs. Of course, I announced in the Statement the £500,000 which the Football Trust is giving for closed circuit television.
Both noble Lords asked about deeper inquiries. I note what they say. At this stage I think that it is right to point out that there are a number of inquiries taking place. There are the inquiries through the Belgian authorities. There is the inquiry conducted by Mr. Justice Popplewell. I believe that it is important to hear the results of those inquiries on the immediate events before deciding what further action should necessarily be taken. We need very clear and very quick action. I always have a slight fear—perhaps more than a slight fear—that lengthy inquiries sometimes tend to postpone the action which ought to be taken quickly. I put in that proviso only because it is important to appreciate it and I do not, on behalf of the Government, rule out the possibility of an inquiry later; but much is going on at the present time.
Lord Cledwyn of Penrhos: My Lords, perhaps I may be allowed briefly to associate my noble friends and myself with the expressions of sympathy on the death of Lord George-Brown. Many of us on this side of the House had the opportunity of working with him, both in Government and when in Opposition, over three decades and more. We regarded him as one of the more significant political figures of our time. He was a
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man with a penetrating intelligence who in Cabinet could frequently strike the nail on the head very quickly where the rest of us took a long time to do so. He was a patriotic Englishman who had most admirable qualities. We send our deep sympathy to his family.
4.18 p.m.
Lord Stallard: My Lords, may I, as an ardent football supporter, welcome the Statement made by the Government and the noble Viscount this afternoon? I thank the Government and the football authorities concerned for the urgency which is being attached to the tragic circumstances which took place in Brussels last week.
I ask the noble Viscount one or two questions. I took the view that it was a little harsh to ban the clubs rather than the supporters. The supporters were guilty of the offences, not the clubs. I should like to ask the noble Viscount whether a ban on supporters rather than on the teams was discussed with the officials when he met them last week. Like other noble Lords who have spoken, I too welcome the proposed legislation to ban alcohol. I have two questions on that aspect. Will that ban include a ban on supermarkets, who liberally sell alcohol at all hours of the day outside, near and round about football clubs and elsewhere? Therefore, supporters are well "tanked up"—which I believe is the phrase—long before they get near the football ground.
If the ban can be extended to limit the sale of alcohol in supermarkets, for example, and other outlets not normally controlled by the licensing hours, that might be helpful. I hope that the noble Viscount will not allow this legislation to become confused with proposals in another place to extend the already too long licensing hours that we have at the moment. To mix up these two issues would lead to confusion. I ask the noble Viscount for his views on that.
I, too, welcome the inquiries into the Bradford disaster. I only hope that the noble Viscount can assure me that adequate resources will be made available to Third and Fourth Division clubs to bring their grounds up to the required safety standards, because we know that they would not be able to do so without some assistance.
In his discussions with the football authorities last week did the noble Viscount mention the possible effects of provocative behaviour on the field itself? I have in mind the almost obscene gestures that players make nowadays when they score a goal, running to their supporters and almost inciting a response. I think that that must be a contributory factor.
My last point is a wee bit controversial. The noble Viscount mentioned the Brussels judiciary, the possibility of an exchange of prisoners, court cases and so on. May I remind him—and I do not do this with any malice—that there is still a great deal of ill-feeling, particularly around the Tottenham area, about the young lad who was shot dead at about this time last year in Brussels as a result of another unfortunate incident? His name was later cleared in the court proceedings and he was certainly not in any respect a hooligan. There has been correspondence with the Prime Minister on this. He was the unfortunate victim

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of a shooting, and he died. The man who fired the gun was charged, but was given a derisory sentence in the eyes of most of us who knew the case. That does not augur well, and there should be a much more serious attempt to make the sentences fit the awful crimes perpetrated by the real thugs and hooligans responsible for these tragic incidents.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord. First, I think that I should make it clear that my right honourable friend the Prime Minister met the various authorities mentioned in the Statement. I was not present on that occasion. Indeed, I have to admit to the House that I was far from London at the time. I have to give the views as I know them, but I was not present and did not hear them personally.
The noble Lord says that it was harsh to ban the clubs. That was not the view of the Football Association and it certainly was not the view of UEFA. It was certainly not the view of my right honourable friend the Prime Minister after she discussed the matter with all concerned. They all felt that such drastic action was the only thing possible to bring home to everyone the sheer horror of what had happened.
The noble Lord asked about finance to bring the grounds of Third and Fourth Division clubs up to standard. There have been discussions between the Government and the Football Trust as to how in various ways the finance may be found. No conclusions have yet been reached.
The noble Lord asked about the sale of alcohol in supermarkets. That is a matter for consideration by my right honourable friend the Home Secretary and it will be discussed through the usual channels. He also asked about the sale from all other outlets. I think that it would be fair to say to the House that a major problem that inevitably arises is that, as we all know, there are any number of sources of drink if people want to have it. I am always told that anybody at any time who wants a drink can find a means to have one. I suspect that that is almost certainly so. It is very difficult to widen the matter, but certainly the legislation ought to go as widely as it can.
With regard to the story that the noble Lord told about a certain individual, in four years as Home Secretary I learnt never to comment on individual cases, either those about to happen or more usually those that have happened. I do not think that I shall break my rule now, except to say that if the noble Lord's broad point was that if people who commit such offences can be brought to justice they should have stiff sentences, I am sure that that is the wish of the whole House and indeed the country.
Lord Gladwyn: My Lords, has the noble Viscount by any chance read in this morning's Times the important letter from Professor Ralf Dahrendorf on the reasons for hooliganism in this country? In any case, will the Government give serious attention to the proposals that he makes?
Viscount Whitelaw: Yes, indeed, my Lords, I read the letter. I would only add that of course the Government will pay considerable attention to what is
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said by Professor Dahrendorf and many others. I think it is fair to say that there are probably many reasons behind action such as that taken at Brussels, and they all have to be studied.
The Lord Bishop of Norwich: My Lords, I believe that from these Benches we would want to be associated with the tribute to Lord George-Brown, who used to delight in telling us on these Benches that he was a robust and loyal Anglican. He used to say it rather straight at our faces as though to say, "Cap that one!". He enjoyed keeping us bishops up to the mark. We mourn his passing with much regret and remember him with deep affection in our prayers.
Also I believe from these Benches that we would want to underline what the Prime Minister said in the Statement, which the Leader of the House repeated, concerning sympathy for the families who have been so deeply and suddenly shocked into bereavement after last Wednesday's tragedy. I must, though, declare an interest in the question that I want to ask the Leader of the House. My football club, Norwich City, won the Milk Cup—the League Cup as it used to be called—and is now barred from Europe.
If I may digress for a moment, on that day when we played Sunderland all our supporters and all theirs picnicked together in great amity before the game. Even after the game we visited each other's coaches before the long journeys back to the North-East and East of England. We shared each other's insignia—the black and red of Sunderland and the yellow and green of our Canaries—and there were no untoward incidents at all. That is a reminder of what can happen; and it is not news unless it is something bad. I should like to put on record that that and many other games in our country in this last season that has just closed have been marked by good sportsmanship and a recognition of each other's qualities. Particularly I believe that Liverpool and the members of the Kop have been very hurt by the tiny group of drunken and violent people, some of them, we believe, masquerading in Liverpool colours, who brought such shame upon the English game.
The question that I have to put is this. I wonder whether we have the Government's support for a plan which was made before Wednesday. Before Wednesday, as the winners of the Milk Cup, Norwich City had been in touch with Juventas about inviting the team—and the invitation still stands—to come across for a pre-season game in August here in our Carrow Road stadium. But we realise of course that now we are barred from Europe and we ourselves are barred from the Cup Winners competition which we had looked forward to so much.
I believe that it would be a deeply healing experience—and I certainly would want to contact the Archbishop of Turin and talk with him as Christian leader to Christian leader—if in August that game between ourselves and Juventas was able to go ahead. I realise that it touches so many rather wider political problems and must be seen against the fact that we now stand in shame because of that tiny group of English people who brought shame on our nation and our game—and that in the very week when we as a nation remember that 41 years ago young men of just that same age were seeking to liberate Europe.

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I therefore simply ask whether the Leader of the House would like to give consideration, sympathy and even encouragement to the negotiations that are going on now to invite Juventas to England for that game at Norwich. I believe that it could be a deeply healing experience and might do much to restore the level of our great national game as an exciting, fair and truly family game. It might also help to purge the shame and disgrace in which our great national game has now been brought into disrepute. I ask for some encouragement from Her Majesty's Government.
Viscount Whitelaw: My Lords, I am grateful to the right reverend Prelate. I know how sad the Football Association felt—this was certainly expressed by the chairman—for the Norwich City football club in the predicament in which it has found itself as a result of the ban on playing in Europe. The right reverend Prelate has expressed very plainly and very significantly how particularly sad this is for a club and, indeed, for supporters who have had such a good record with those against whom they have played. He has told us this very plainly. It makes it all the more sad that they have been to some extent the losers arising from the action of others, but that is, I am afraid, inevitable sometimes in life.
The right reverend Prelate asked me to give the support of the Government to his negotiations. The furthest that it would be proper for me to go, I believe, in the very touchy situation that obviously exists at the moment, with so many different people involved, is to say that I will make sure that the views that he has expressed are brought to the attention of all those concerned with this and that they will be able to consider what he has said and to give advice, no doubt to him and to others, as to the best way of proceeding. Frequently, it is a good thing that a little time should elapse—and this applies in the circumstances in which we find ourselves at present—before one makes decisions of that sort.
Baroness Burton of Coventry: My Lords, will the noble Viscount agree that perhaps the one good thing to come out of the dreadful happenings at Brussels is that the problem—what we call at the moment soccer violence—can perhaps be dealt with? Does he not agree that, really, violence at soccer grounds has gone on for some 10 or 15 years? I am sure that many people, in common with myself, who have seen this everywhere, have said, "Why don't they do something about it?" It has steadily got worse and nothing has been done.
I should like to say here what I think is right. I believe that we should thank the Prime Minister for the action that she took prior to Brussels. I believe that following Brussels the feeling of shame and indignation in this country would have produced action. But, prior to Brussels, it was my belief that neither the Football League nor the Football Association were going to deal with the problem, on the grounds that it was too difficult, that it was too expensive to have membership cards, that it was too expensive to have all-ticket finals, and that a lot of money would be lost if drink was stopped.
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Is the noble Viscount aware that a good many ordinary people like myself who have spent a lifetime in sport are very glad that this matter is at last going to be dealt with? In connection with the question put by my noble friend Lord Diamond, is the noble Viscount also aware that I was very glad to hear his response about the possibility of further inquiries without delay. It seems to me that the country has been so shocked—it is not only British football, but the British people, or the English people, if you like, who are on trial here—that there is a feeling that this matter should be dealt with at once. It is therefore on behalf of many people, I believe, that I thank the noble Viscount. I am sure that many people throughout the country will agree with trying to hasten through the legislation and are determined that something is done about this matter.
Viscount Whitelaw: My Lords, I am grateful to the noble Baroness, who has a distinguished record in sporting activities over many years. I shall be only too pleased to pass on her remarks to my right honourable friend the Prime Minister who will, I know, be very pleased to receive them. I should like to thank the noble Baroness very much for what she has said.
As to the question of further inquiries, I made clear, I believe, in answer to the noble Lord, Lord Diamond, and also in reply to the noble Lord, Lord Cledwyn, that I feel that the immediate inquiries on the most recent events must come first. These must go ahead quickly. I have simply said that I shall note—I do not think that any noble Lord would expect me to say more at this stage—the demands for further inquiries. But the initial inquiries will take place at once.

Social Security Review
4.34 p.m.
Baroness Trumpington: My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Social Services about the social security review. The Statement is as follows:
"Over the last 18 months the Government have been examining the major areas of social security provision. In that time over 40,000 consultation documents were issued, 4,500 pieces of evidence were received and 62 organisations and individuals gave oral evidence at public sessions. The Government are today publishing a Green Paper which sets out their proposals. We will now be seeking comments on the proposals from interested organisations and will be providing an opportunity for the House to debate them.
"The social security system in this country owes a great deal to the report of Sir William Beveridge in 1942. Although much of what he proposed was changed when it came to implementation and more has been changed since, many of the principles on which his proposals were founded remain sound. The Government remain committed to the concept of a national insurance system under which entitlement to the major benefits is earned by the payment of contributions during a working life. The Government also believe that our tradition of state

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support for those in need is one which should be maintained and developed. But social security is not a function of the state alone. It should be a partnership between the individual and the state—a system built on twin pillars.
"Any review of social security in this country must recognise its considerable achievements. But the review has shown that there are several major causes for concern.
"By common consent the social security system is too complex. That is to the disadvantage of both the public and the staff. In particular, the research evidence shows that substantial numbers of supplementary benefit claimants do not understand how their entitlement is worked out—in spite of the fact that 38,000 staff are now working exclusively on supplementary benefit. With the pressures now being faced, there is a danger that some parts of the system will break down. It is, therefore, a matter of urgency that we devise a simpler and more coherent system.
"The social security system also needs to be modernised. It is not properly co-ordinated with the tax system and operates with outdated equipment. We now need a major computerisation strategy for social security which can link effectively with other Government systems, including that of the Inland Revenue.
"In terms of spending, the cost of the social security system has increased five-fold in real terms since the war and now totals some £40 billion a year. That is over 30 per cent. of all public spending and represents over 11 per cent. of gross domestic product compared with only 4.7 per cent. after the war. Nor has the pressure for growth in spending ended. In the first part of the next century we need to provide for an extra 4 million pensioners. That, taken together with the state earnings related pension scheme, means that spending on pensions will at least treble. We must ensure now that we have a soundly based social security system which the country can afford.
"Above all, perhaps, the social security system does not always help those most in need. Over half those living on the lowest incomes in this country are in families with children. This affects not only the unemployed but also families where the head is working. Yet, under the present system, low income working families can face both the difficulty of escaping the poverty trap—where they may get no increase in total income when their earnings rise—and also the unacceptable position that they can be better off out of work. That position must be changed.
"Making better provision to meet the needs of poor working families with children has been a major priority of the review. We therefore propose to introduce a new benefit—to be called family credit—to provide better help for such families. Family income supplement will be abolished. The new family credit will be paid on the same basis as help to unemployed families, in that help will be related to the age of children. It will be related to take-home pay, not gross earnings, as happens with family income supplement. And it will be paid by employers through the pay packet.
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"Family credit will be paid in addition to child benefit. The Government believe that the extra responsibilities carried by all those bringing up children should be recognised. Child benefit will, therefore, continue to be paid for all children, irrespective of the means of the family.
"Family credit will be part of a coherent system of income-related benefits. That system, covering basic income support, assistance with housing costs and help for low income families, will be based on a common income test and a common structure. It will be simpler, fairer and easier to administer; and it will provide the same level of help at the same level of income for those in and out of work.
"We propose to replace supplementary benefit with a new income support system. The central concept of this income support scheme is that the regular extra payments now made on the basis of detailed individual assessment should be absorbed into the main rates of benefit. Those rates will provide a special higher level of benefit for pensioners, the long-term sick and disabled and lone parents. Families with children will not only receive assistance for each child but also a premium to reflect the extra pressures they have to cope with. At the same time the capital rule will be eased by introducing a taper between £3,000 and £6,000 instead of the present inflexible £3,000 cut-off; we shall ease the earnings rule for the long-term unemployed and the disabled.
"The income support scheme should provide for the needs of almost all claimants but we recognise that the system must be ready to cope flexibly and quickly with particular problems. Instead of the present single payments system, we propose to set up a social fund which will be operated on a discretionary basis by specially trained staff at DHSS local offices. It will provide emergency help where needed and help those who face particular difficulties. We also expect that the social fund will, in time, provide a better basis for contributing cash help to enable people to be cared for in the community rather than in institutions.
"I am also publishing today the report of the housing benefit review team and have accepted most of their recommendations. The review, team found that housing benefit was excessively complicated, involving six different tapers applied to different groups at different income levels. It is also expensive and poorly targeted with over one-third of all households—some with incomes up to average earnings—receiving benefit.
"We intend to move to a simpler, clearer system. It will be based on the same net income assessment basis as the income support and family credit systems. It will also provide help on the basis of rent and rates together rather than separately as at present.
"For the poorest families, housing benefit will meet 100 per cent. of rent. At present 100 per cent. help goes only to those on supplementary benefit. In future it will apply equally to those in and out of work.
"We believe, however, that the basis on which help is provided with rates needs to be changed. At

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present some 7 million householders receive help with some or all of their rate bills and over 3 million householders pay no rates at all. As a result a large proportion of people live in households in which no rates are paid. This means that there is no effective link between payment for and use of local services. The whole structure of rates is currently under review but the Government believe that, so long as domestic rates remain, all householders should be directly responsible for making some payment towards them. The Government have in mind a figure of the order of 20 per cent.
"The review also examined the contributory national insurance benefits for unemployment, maternity and widowhood. As I have already made clear, the Government remain committed to the principle of basic provision for these contingencies organised by the state through the national insurance system. We propose no change in unemployment benefit, which will continue to be paid for 12 months.
"For widows under 60, we propose to replace the widow's allowance currently payable for the first six months after bereavement by a single lump sum payment of £1,000 to give them more help when it is most needed. In addition, widowed mother's allowance will now be paid from the time of bereavement rather than after six months as at present. Widow's pension will also be paid from the time of bereavement but the rules of eligibility will be modified to concentrate help more on older widows who are least likely to be able to resume work. The changes will not affect the benefit paid to any existing widows.
"In maternity, we propose to adjust the rules governing maternity allowance so that the mother can have greater freedom in choosing when, around the time of her confinement, she wishes to be paid the allowance. We also intend to change the qualification period so that the benefit is more likely to be paid to women who have had to give up work in order to have their baby.
"The maternity grant and the death grant have been left at their present level—£25 and £30 respectively—for many years and are now quite inadequate for their purpose. The average cost of a funeral is now over 10 times as much as the death grant and it costs £20 in administration to pay out each £30 grant.
"We propose instead a new maternity grant of £75—three times the level of the present grant—available to all low income families. Help with the full cost of funerals will also be made available more widely than at present to anybody who has responsibility for a funeral and lacks the resources to pay for it. Help will be provided through the social fund to ensure that it can be given quickly and flexibly and with the minimum of detailed inquiry. These changes will concentrate help where and when it is most needed instead of providing a token contribution to everybody when it may be of little practical use.
"Mr. Speaker, the largest single area of social security spending is on pensions. The basic pension
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alone accounts for over £15 billion a year and is paid to 9 million people. That pension accounts, on average, for half the income of pensioners and has been a major factor in raising pensioners' living standards since the war. It is, and must remain, the basis on which individuals can build additional pension provision. The question is how that extra provision should be made.
"At present only about half the working population belong to occupational pension schemes. The development of occupational pension schemes has been an important factor in improving living standards since the war. But the coverage of schemes has not increased since the mid-1960s. The development which it was hoped would follow the 1975 Social Security Pensions Act has not taken place.
"Nor has the forecast of cost on which the 1975 scheme was based proved sound. The analysis undertaken during the review has shown that the number of pensioners for whom we will eventually need to provide is 3 million greater than was recognised in 1974 and 4 million higher than it is today. It is clear, therefore, that the long-term cost of state pensions is set to rise steeply in the first 30 years of the next century. If the basic pension was uprated in line with prices, then its cost would increase in real terms by half to £22 billion. If it kept pace with earnings the cost would treble to nearly £45 billion. On top of that, the cost of the state earnings related scheme will add another £23 billion. Thus, the total pensions bill will at least treble and could increase by over four times. At the same time the ratio of contributors to pensioners will worsen and it is estimated that there will be only 1·6 contributors for each pensioner compared with 2·3 now.
"As a country we cannot ignore these emerging costs. If the best estimates available to us lead us to question whether we will be able to afford the promises we are making, then we have a duty to re-examine the position. It would be an abdication of responsibility to hand down obligations to our children which we believe they cannot fulfil.
"The real question is not whether action should be taken on the state earnings related scheme, but what action. There are those who argue that we should restrict the emerging cost of the state scheme by changing its provisions. The difficulty of that course is that contributions would remain the same while benefits would be reduced. There is no reason to believe that there would be any increase in occupational pensions to fill that gap.
"The Government have concluded that it would be better to adopt a different approach. This would be based on the aim of ensuring that in addition to the basic pension everyone has his own pension with his job—whether it be an occupational pension, membership of an industry-wide scheme or a personal pension. In all cases every employee would have the right to a contribution from his employer.
"We recognise, however, that relatively older workers have difficulty in building up an adequate occupational pension. We have decided, therefore, not to make any changes for those within 15 years of

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retirement. For men aged 50 or over and women aged 45 and over at the time of implementation the existing state earnings related arrangements will continue. This means that no one retiring during the rest of this century will be affected by the change and neither will any existing pensioner.
"All rights built up in the state scheme at the time of the change will be honoured. In addition, we also intend to give a special enhancement of rights for men aged between 40 and 49 and women aged 35 to 44. They will be given a bonus of added years of entitlement which will give them higher pensions when they eventually retire.
"For those to be covered by the new arrangements the Government will lay down a minimum contribution level of 4 per cent. of earnings at least half of which must be provided by the employer. The new arrangements will be phased in over three years.
"These changes will mean that in due course all employees will be contributing to their own additional pension through their jobs. This will represent the biggest ever extension of occupational pension coverage in this country and will add to the reforms of occupational pensions, involving improved rights for early leavers and transfer of pensions, currently in legislation before Parliament.
"Mr. Speaker, the Government must also ensure that the system is managed as effectively as possible to provide the best possible service to the public. The Government's benefit proposals will in themselves make the system simpler. But we are now to embark on the largest programme of computerisation ever undertaken in this country to modernise and improve its operation.
"The benefit changes and the computerisation both of my department and the Inland Revenue will provide opportunities to achieve better co-operation and closer working between the tax and benefit systems. The Government intend to take advantage of those opportunities and will be considering this further in the context of the Green Paper on Personal Taxation.
"Meanwhile, we have decided to take a major step towards better harmonisation by aligning the tax and benefit years. Instead of benefits being uprated in November each year the uprating date will be moved to April. This means that all tax and benefit changes will be implemented at the same time. It will also be of considerable assistance to local authorities who at present have to reassess housing benefit cases twice a year.
"The change in the benefit year will be brought in at the time of implementation of the major structural reforms. We expect this to be in April 1987. After the uprating of benefits due at the end of November 1985, there will, therefore, be a 16-month period before the change in April 1987. It would clearly be wrong to allow such a gap between upratings but it would not be practicable to have upratings both in November 1986 and April 1987. Accordingly, the Government have decided that, following the November 1985 uprating, there will be two upratings at eight-month intervals, the first in July 1986 and the second in April 1987.
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"Mr. Speaker, the programme of reform I have announced will provide a system which is easier to understand and simpler to administer. It will mean the most substantial changes in income-related support for 50 years and for the first time give equal support for those in and out of work. It will provide more help for low income families with children. It will establish a better partnership between state and individual provision, especially in pensions, giving everyone the right to his own pension with his job. Above all, the reforms will provide a modern social security system to take us into the next century."
My Lords, that concludes the Statement.
4.56 p.m.
Baroness Jeger: My Lords, I must congratulate the noble Baroness. She is getting better and better at reading ill-written scripts. The noble Baroness told us in conclusion that what was announced today would make the system easier to understand. I did not feel that there was a great rapport of understanding among your Lordships as this complicated document was being read out.
I want to start by saying something rather serious about the procedure of the House. I do not think that the House has done itself any good today in the arrangements for business. According to the Companion to the Standing Orders, a Statement should be followed not by a debate but only by questions and limited comment. I assure your Lordships that I shall do my best. But the Government have put us in a big difficulty. As I understand it, a Green Paper is supposed to be a discussion paper, but now we are in the situation where, if we abide by the rules of the House, we shall not discuss this discussion paper.
I do not think that it is to any advantage for the House to be presented with a discussion document—on which there will be many more debates to come—in the middle of another piece of legislation with which it has some connection. I hope that my memory is not playing me false, but I seem to remember the days when Green Papers were simply published; they were not made the subject of Statements. The Statement came at the later stage when the White Paper was published, and then it was debated. I am encouraged beyond all measure to see a former Speaker of the House of Commons nodding in my direction. I hope that those who arrange Government business will take note of that.
To get to the Statement and to try to keep myself within order, I have to welcome the fact that the Government have had many discussions. We hear there are to be more. What I am unclear about is whether those discussions will have any effect, or whether we are being presented today with a rigid list of the Government's thinking. The noble Baroness said time and time again, "The Government have decided this, that, and the other. The Government have decided something else". Therefore, the status of future discussions is a little unclear.
"By common consent",
the Statement says,
"the social security system is too complex".

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I have to ask your Lordships: who has made it complex? It has become more and more complex as the Government have had to try to bring in additional assistance for one problem or another which they themselves have created. Most people need heating allowances because we have what is virtually taxation on gas and electricity prices. More people need housing benefits because we do not have any sensible policy on housing finance. More people need special diet subsidies because the basic allowances are too low.
However, I want to make it absolutely clear—and I have been involved in this field for a long time—that I agree with one statement that the noble Baroness read out; namely, that there should be a revision of the social security system in this country. But that should not be to the extent of undermining the basic principles of the Beveridge Report which were that we as a society, as a community, should take responsibility for those who are also members of that society and who are not as fortunate as ourselves. My complaint is that this has not been, so far as we can see, radical enough. It is just tinkering with various allowances without getting down to what is vital. I must say a word about these extra 4 million pensioners. I think I might be one of them if I live long enough. I resent being referred to as if I were a nuisance.
Baroness Trumpington: No, my Lords! We are in the same boat. I do not want to be a nuisance either.
Baroness Jeger: Thank you, my Lords. What I cannot understand about this document is that it suggests that the children will not be able to pay for the old people. The contributions which the children make are for their old-age pensions. I have paid my contributions. I have been at work since I was 18 and I do not want anybody telling me that I am a burden on the younger generation. I should like to know what has happened because I am very suspicious of where my pension contributions have gone. I think that they have been swallowed up by the Chancellor of the Exchequer. I do not think that they have been properly invested. I should have done better to have put them in a building society or in national savings. Therefore it is wrong for the Government to put out this verbiage suggesting that old people are a nuisance and that the young people will not be able to afford to keep us. The logic of that would be to kill us all off, and that certainly would be cheaper.
This is a very depressing Statement because it seems to suggest that the Government are not hoping for an increase in productivity, that prosperity will be static, that there is no brave new world for the younger generation. I would have hoped that they would be living in a richer, fairer world and that their share of looking after old people in the community would be totally acceptable.
I am in trouble here of doing what I objected to before. Briefly on housing benefit review, let me ask the question: who introduced housing benefit in its present state and took no notice of those of us who foresaw some of the difficulties? Let me also ask the following question. As far as the poorest families are concerned, the noble Baroness says that housing
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benefit will meet 100 per cent. of the rent; but will it meet 100 per cent. of the mortgages? Many poor people are trying to buy their own houses especially since the introduction of the sale of council houses. Many people, encouraged by the Conservative Government, bought council houses, are now out of work and are having great difficulties in paying their mortgages. The Statement refers only to rent. I should like to know about these other people who number more than half the population of this country.
I am glad that the Government propose no change in unemployment benefit, but for different reasons. I was afraid that the Government would reduce the period from 12 months, but unfortunately there is nothing in the Statement to carry out the Social Security Advisory Committee's recommendation that this was a priority for more help.
On widows under 60, can the noble Baroness say whether the £1,000 is to be taxed, whether payment of it will depend on the husband's contributions or on the length of marriage? I gather from this Statement that the death grant as we know it is to be abolished, but that the poorest people are to be helped. The phrase used is "lacking the resources to pay for a funeral". I wonder what criterion there will be of the lack of resources to pay for a funeral. That is liable to involve all sorts of difficult subjective decisions.
I also think that the Government seem to be on the wrong track in their reference throughout to pensions as costing the state money. If we take more money out of the pockets of pensioners, they have less to spend, there is a drop in demand and therefore it does not do anybody any good. The payment of fair pensions and fair welfare benefits circulates money and creates employment because needs can be met. The Treasury has not heard about that yet.
As for the question of what is unbeautifully called SERPS, I shall restrain myself from that because I know that we shall be having a fuller debate. But I cannot find any reference in the Statement to the self-employed. We know that the Government are fond of the self-employed and the small businessman; but throughout this document refers only to employers and to employees. Many anxious people will be wondering what will be happening to their efforts to stand on their own two feet and to run their own small businesses perhaps by themselves or with a wife.
I know that many noble Lords will have questions to ask so I move now to limited comment, which I gather I am allowed to make. My limited comment is that we shall never get this aspect of life right until we fuse income tax and national insurance. That is the kind of radical reform for which many of us are looking. This is already fused in the minds of ordinary people. When I held my surgeries when I belonged to another place, people would come with their pathetic pay-slips and would say, "Look what the Government have taken". What the Government had taken was national insurance and income tax. There is no separation in the minds of ordinary people between what they pay in tax and what they pay in national insurance: it is all money that the Government take. We might as well accept that fact. There is no genuine relationship between personal contributions and the benefits which people need.

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There is this tangle of benefits and I am frankly disappointed because I had hoped for more imaginative and more far-reaching benefits. I may not have read it carefully enough but I cannot find in the Statement how much the Government expect to save, because many of us fear that this is a Treasury exercise. If there is any reduction in the amount being spent on welfare, that money is being taken away from the people who need it. Until we can ensure somehow that our social security review and the changes which need to be made are not based on Treasury economics, we shall never get the answer right.
5.9 p.m.
Lord Banks: My Lords, I should like to thank the noble Baroness for repeating that lengthy but important Statement. There will be general relief that the period of waiting and speculation is over and now the period of consolation—
A noble Lord: Oh! A better word, my Lords!
Lord Banks: Consultation, my Lords. Whether there will be any consolation for the noble Baroness and the Government remains to be seen, but there is some consolation for me in putting to the House this proposition: that we shall require to consider what has been put before us by the Government and we shall need to analyse it in order to see whether it is in fact the great review, the wide-ranging review of social security that we have been promised or whether or not it is a piecemeal, cost-saving exercise, as has been alleged.
In that connection I regret, as did the noble Baroness, that the integration of tax and social security seems to have been postponed to another day—which would seem to indicate that we shall have to have another complete rethink in a few years' time when that is undertaken, as I am sure that invevitably in the long run it will. I should like to ask the noble Baroness whether comprehensive tax credit systems have been considered. We shall certainly be very interested in the answer to that. I echo the question asked by the noble Baroness, Lady Jeger, as to how much saving, if any, the Government are proposing to make. I would make it clear that we on these Benches are not seeking any immediate net saving although we share in the general concern about the long-term cost of the present state pension scheme. We believe that if genuine savings can be made and justified then benefits which are recognised to be inadequate should be raised. I refer to items such as the basic retirement pension and unemployment benefit, benefits which at the present time require to be supplemented so often by supplementary benefit. We shall judge the Government's proposals in the light of that.
I should like to ask a question about child benefit once the new arrangements come into force, once the family credit is operating. Will child benefit then continue to be index-linked to rise in line with prices? There have been various rumours about that in the press in recent weeks. With regard to the death grant, would it not have been simpler to put the death grant at a level which was more approximate to the cost of the funeral but to recover it from people whose estates were more than a certain amount, which of course is known already to the Government?
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I want to say a word about the abolition of the earnings-relating pension. Naturally I am interested to see how the proposals which the Government put forward compare with the plan which I put before your Lordships' House a little while ago and which was submitted by the Minister at that time to the review body. I was interested to hear from the noble Baroness that employees would be able to take out personal pensions as of right and be able to claim a contribution from an employer. That procedure applied to those without an occupational scheme is the procedure which I have been advocating since 1958 and indeed put forward as an alternative to the plan introduced at that time by the noble Lord, Lord Boyd-Carpenter. It has in fact been the policy of my party since 1960.
As I understood the Statement, that, applied to those without an occupational scheme, will also apply under the new regime to people covered by occupational schemes. I would ask the noble Baroness whether that means that those employers who are paying into an occupational scheme will also have to pay 2 per cent. to a personal pension scheme in addition if that is claimed by an employee.
We shall be particularly concerned, in examining these proposals carefully, with the position of those who at the moment are not covered by an occupational scheme. The proposal that I have just been referring to should help them. As to those who are already retired and who have little or no earnings-related pension, an increase in the basic pension would have helped them; but unfortunately I do not see any reference to that in the Statement.
5.15 p.m.
Baroness Trumpington: My Lords, I thank the noble Baroness, Lady Jeger, for her compliments about my reading abilities. It is nice to have something goodish. She cannot hold me responsible for the way procedures worked out, but I would remind her that this is a Green Paper and that, as she knows, there will be further opportunity for consultation. The noble Baroness raised various points, but perhaps I may start with one which the noble Lord, Lord Banks, raised in regard to integrating taxes and benefits. The review has been concerned with the structure and objectives of social security. This is the right place to start but we are looking at links between the tax and benefits systems where these make administrative sense. Family credits is an example of this. The possibilities opened up by computerisation of the two systems are also being looked at and further ideas will be put forward in the Green Paper on personal income tax later this year.
Returning to the noble Baroness, who said there were more people who needed heating addition, housing assistance and diet help and that we must not undermine the basic support, these proposals do not undermine the basic level of support provided by the state but the new income support scheme will provide this basic support in a much easier and more effective and simpler way than now. If I may elaborate on the points and questions she raised about heating, the help currently given to supplementary benefit claimants by way of extra heating additions will be taken into account when the new supplementary benefit rates are set. But the evidence is that the current complex

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system of extra heating additions does not necessarily give the money to those most in need. We think that the new, simpler income support system will be better and I very much hope and believe that this is true.
With regard to people's contributions paying for their own pensions—a point which the noble Baroness also raised—the state system works on what is known as the "pay as you go" basis: today's contributors pay for today's pensioners. That has been the system for a very long time. On the question of paying for funerals, perhaps I may at the same time take up the point raised by the noble Lord, Lord Banks. In answer to the noble Baroness, Lady Jeger, I can repeat that the new system for help with funeral costs will be operated through the new social fund, as I have said. It will be operated flexibly and sensitively by DHSS local offices. Help will not be limited to supplementary benefit claimants as it is now, but the precise details have not yet been finalised.
With regard to the point raised by the noble Lord, Lord Banks, I have to say that paying a large death grant to everyone and then recovering from estates would impose a most unwelcome and cumbersome addition to administrative processes and the various hoops that the bereaved have to go through. I think it would probably also end up being more expensive for everybody, excepting perhaps the people who most need help. The noble Baroness, Lady Jeger, asked whether the £1,000 would be taxed and whether it would be based on the husband's contributions. The question of taxation and the new lump sum will be considered alongside the forthcoming Green Paper on personal taxation. The award of the new lump sum will depend on the satisfaction of the same national insurance contribution conditions by the late husband as apply now to the widow's allowance.
The noble Baroness asked why the self-employed are not covered by pension proposals. The self-employed are not at present covered by SERPS. They already have access to personal pensions, with very favourable tax advantages; and many take them out. It would not be right to impose rigid rules on people building up their own businesses. The noble Lord, Lord Banks, asked about personal pension and occupational pension schemes. The personal pension option will be alternative to occupational cover. Employers will not be required to contribute to both.
The noble Baroness, Lady Jeger—I am sorry to be jumping around from speaker to speaker like this, my Lords, but that is the way the cookie crumbles—asked me about housing benefit, and whether that provided 100 per cent. help with mortgages. The current system is that those on supplementary benefit get their mortgage interest paid in full. The Government think that consideration needs to be given to arrangements which provide less additional help for the unemployed compared with those in work, so we will be discussing arrangements which mean that more of the risk is borne by borrowers, in particular those unemployed for a short time. These proposals will be discussed with building societies and other interested bodies before any change is made.
Turning back smartly to the noble Lord, Lord Banks, who asked whether more pensioners would
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need supplementary benefit because SERPS is being wound up, my answer to him is that the Government proposals are aimed at ensuring reasonable pensions for everyone. We do not anticipate any significant rise in pensioners getting supplementary benefit in the future. Indeed, that will continue to fall. I think that I have covered the questions asked by the noble Baroness and the noble Lord.
Baroness Ewart-Biggs: May I ask the noble Baroness two short questions? The noble Baroness said that it was families with children who needed help most. Can she elaborate a little on how one-parent families are going to benefit through the changes; whether they would indeed go on receiving one-parent family benefit, or whether they would benefit from the family credit scheme that the noble Baroness was describing? Secondly, the noble Baroness implied that an older widow was in greater need of help because she would be less likely to get employment. That is what I understood her to say. Would she not think that a young widow—after all, there are some—is in greater need because she still has children to support and to bring up? I wonder whether she might clarify that point for me.
Baroness Trumpington: With regard to the second point, I think I am right in saying that the younger woman with children will get protection; but if she has no children she will not get the same protection as the older woman because she can go out and get a job. That is the principle of it. In reply to the noble Baroness's first question, the one-parent family benefit is to continue to aid one-parent families.
Lord Kilmarnock: My Lords, I wonder whether I may ask the noble Baroness for a number of crumbs from her cookie before it crumbles away. On the question of family credit, am I right in thinking that this is designed to be paid through the husband's pay packet? If that is the case, would she not agree that it must be adapted so that the mother can claim the benefit if she chooses? Unless that happens, there is going to be a major redistribution from the woman to the man within the family.
One welcomes the extension of the capital and earnings allowance under the income support scheme; but would the noble Baroness not agree that a great opportunity is being missed to raise earnings allowances for the long-term unemployed? Even if the Government felt they could not have done that for those unemployed for over one year, could they not have started perhaps with those who have been unemployed for over two years? Will the Government consider that during the consultative process, if it is going to be a genuine consultative process?
Finally, the Statement refers to providing an opportunity for the House to debate these very substantial Green Papers. Am I right in thinking that the Government are going to make their own time available for such a debate on these very important proposals?
Baroness Trumpington: My Lords, it would be for the usual channels to decide when there would or would not be a debate.
Lord Kilmarnock: My Lords it would not be for the normal channels to decide that in principle. The Government will have to guarantee in principle that they are offering time, and then we can try and work it out.
Baroness Trumpington: My Lords, the noble Lord will have to wait and see. The cookie has not crumbled; the yeast is rising. With regard to the first question that the noble Lord asked me, the answer is that the money will be in the breadwinner's pay packet. To turn to the second question that the noble Lord asked, earnings allowances will be raised to £15 for those unemployed over two years.
Baroness Faithfull: My Lords, the noble Lord, Lord Banks, asked whether child benefit would be raised in line with index linking. I think all of us are very concerned about child benefit. We are grateful that it is still standing, but we do want to know whether it will be index linked. Secondly—this is outside the Green Paper—as a social worker who has often accompanied claimants to supplementary benefit offices, and also as one who sat on the Fisher Committee, may I ask my noble friend the Minister whether she would bring to the notice of her right honourable friend the Secretary of State the difficulties that there are in supplementary benefit offices from the point of view of managerial structure? Very often the people on the counter dealing with claimants are very young girls, much to be admired and respected, but they have a very difficult time. I would submit that with this new Bill, with completely new outlines of work, there should be a different managerial structure in the supplementary benefit offices. I quite appreciate that that is not a question which my noble friend the Minister can answer, but perhaps I may just bring it to her notice.
Baroness Trumpington: I thank my noble friend Lady Faithfull for that last observation, which I feel sure will be noted by my right honourable friend in another place. With regard to child benefit up-ratings, that will be a matter for consideration at the time, and priority will be given to more money for low-income families through the family credit arrangements, which I have already referred to in the Statement.
Lord Roberthall: My Lords, I think we must recognise the tremendous importance of the subject that has been opened up today, and all that is in the Green Paper will no doubt be very widely discussed. I should like to congratulate the Government on grasping this nettle at last, in a way which is so full of promise.
I think that most important in what the noble Baroness has said is the reference to the problems of the future. I think our grandchildren are living in a fool's paradise, because the rapid change in the aid structure means that a much smaller number of workers has to support a very much larger number of pensioners. It is important that this question has been opened up.
Baroness Trumpington: My Lords, I am very grateful to the noble Lord, Lord Roberthall, who I hope has practically finished this sort of "baking session" on a very happy note.
Lord Ennals: My Lords, almost finished! Since the state earnings-related pension scheme and child benefits were introduced during the period that I was Secretary of State for Social Services, I wonder whether the noble Baroness can confirm one or two points. Does she accept that the scheme, when it was approved by both Houses of Parliament in 1975, was totally supported by the Conservative Party, then in Opposition, as well as by the Labour Party in Government? Does she accept that when it was launched in 1978 it was launched, again, with the full support of the Conservative Party and that Mr. Patrick Jenkin, as my shadow, spoke at the launching ceremony? Will the noble Baroness also accept that during the period of the last election, when the question of the state earnings-related pension scheme was put to the Prime Minister, she said there were no plans to change the earnings-related component of the state pension? It was brought on to the statute book, she said, with the full support of the Conservative Members.
Will the noble Baroness also accept that when the Secretary of State for Social Services announced the reviews, he made it quite clear that SERPS was not to be up for review? Can the noble Baroness say why all these assurances have been overturned?
If such assurances given by the Prime Minister and members of the Cabinet to the public and to Parliament are then overturned in this blatant way, does this not bring into some disrepute the words not only of the Prime Minister and Ministers but of politicians generally, if assurances that they have given are then totally broken?
Baroness Trumpington: My Lords, I will take separately the three points that have been made by the noble Lord, Lord Ennals. With regard to his first question, about the 1974 pensions Act, we made clear at the time our reservation about pay-as-you-go schemes, which are a blank cheque drawn on the future. My right honourable friend the Secretary of State warned specifically that the financing of SERPS could become extremely onerous if the assumptions in the Government's actuarial paper at the time changed. They have done so; and it was only right in the light of experience since then that my right honourable friend should look again at the state earnings-related pension scheme—
Lord Ennals: It was voted for on Third Reading, my Lords.
Baroness Trumpington: My Lords, if I may. I will remind your Lordships of what the Prime Minister said in 1983: that there were no plans to change the pension. I think I have her words correctly. That was true, and had we had any specific plans at that stage for changing the pension structure there would have been no point in setting up the inquiry. We did so against the background of public concern on a number of aspects of pension provision, and not only in regard to SERPS. It was in the light of detailed evidence and discussions during the inquiry that it became clear that radical change was needed.
The noble Lord, Lord Ennals, referred to my right honourable friend in another place speaking in the

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1970s. My right honourable friend said when the inquiry was set up that the aim was not to call into question the fundamental pension structure of the 1970s. That was not the aim of the inquiry. The statement was made in an admittedly vain attempt to head off the predictably hysterical claim from the Opposition spokesmen that we were setting up an inquiry with preconceived objectives and ideas. May I say that the aim of the inquiry was to look in a sensible and balanced way at all aspects of state and occupational pension provision. That could not sensibly exclude SERPS. We reached our conclusions on the basis of inquiry, evidence and discussions. I think that answers the noble Lord's questions.
Baroness Gardner of Parkes: My Lords, may I ask the Minister a brief question, or at least ask her to pass this point on for consideration? I certainly welcome the suggestion that everyone should be aware of what rates are and what services cost. I think it remains to be seen whether this is worked out in a humane way. However, may I ask her to ensure that when the new system of rate rebate comes into operation there will be no limitation in regard to the rateable value of property, in view of the fact that some people have suffered great hardship perhaps towards the fag-end of a lease in respect of what is a highly-rated property? Can that point be passed on to her colleagues?
Baroness Trumpington: My Lords, I thank my noble friend and I will see that her point is passed on as part of the consultations.

Sri Lankan Tamil Immigrants
5.37 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, with the leave of the House, I shall now repeat a Statement about the entry to the United Kingdom of Tamils from Sri Lanka which is now being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"On 20th May in reply to a Question from my honourable friend the Member for Lewisham West, I announced my future policy towards Sri Lankan Tamils who expressed a fear of return to Sri Lanka. In the week following that statement over 500 Tamils arrived here seeking asylum. I decided that further measures were necessary to reduce the influx and, after consultation with my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs, on 29th May announced the imposition of a visa requirement for Sri Lankan citizens, to come into effect the following day. The need for such a measure was demonstrated by the fact that 244 Tamils arrived on 29th May.
"A further 76 Tamils arrived shortly after the visa requirement came into effect, but there have been no further arrivals over the week-end or so far today.
"The imposition of a visa requirement will not prevent the entry of those Sri Lankan citizens who qualify for admission in the normal way, for
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example, as visitors or students, although they will, of course, have to obtain visas before travelling. It will save the cost and disappointment of wasted journeys for those who would not be allowed to enter because they do not qualify under the immigration rules. If a Tamil not qualifying under the rules and seeking in present circumstances to leave Sri Lanka wishes to come to this country, he will be able to apply for a visa. Such applications will, however, only be granted if the individual can show that he is suffering severe hardship and the circumstances (including, for example, family links with this country) warrant the exercise of discretion in his favour outside the nomal immigartion rules.
"The position of all the Tamils who have recently arrived will continue to be considered individually on the basis set out on 20th May. Where an application for asylum is refused there will be an opportunity for the United Kingdom Immigration Advisory Service or the United Nations High Commissioner for Refugees to consider the case and representations from Members of Parliament will continue to be considered.
"It was only with great reluctance that I decided that it was necessary to impose a visa requirement on a fellow Commonwealth country. The need for it will be kept under review and I hope it can be lifted in due course."
My Lords, that concludes the Statement.
Lord Mishcon: My Lords, with the usual courtesy of this House, may I thank the noble Lord the Minister for having repeated the Statement made by his right honourable friend in the other place? I ask for the forgiveness of the House, if, because of the grave constitutional and humane considerations that apply to this Statement, I speak for longer than I normally do in reply to a Statement which is made in this House.
It was against the background of press reports of great persecution of Tamils, civilian casualties among the Tamils, including women and children, and indeed of a statement that was issued by Amnesty International to all the relevant governments and delivered, so it tells me, to the Home Office on 24th May, that the decision and the statement of the Home Secretary on 29th May were made. I ask your Lordships' leave to quote but one paragraph from the statement of Amnesty International of 24th May.
Amnesty International says that it,
"urgently renews its appeal to the Governments of countries in which such persons have sought or will be seeking refuge not to return Tamils against their will to Sri Lanka. Amnesty International makes this appeal against the background of reports received in recent weeks of:
"Renewed and widespread extrajudicial killings of members of the Tamil minority by members of the Sri Lanka security forces;
"Widespread arrests and detentions in many parts of Sri Lanka of members of the Tamil minority, among them reports that persons who have allegedly been arrested by security forces' personnel have 'disappeared', officials denying knowledge of their arrest but their relatives expressing fears they may have been killed in custody;
"Widespread torture of detainees".
It appears—and I ask this of the noble Lord, the Minister—that the reply of the Home Secretary of this country, with its great tradition of mercy to those who are fleeing from persecutions, was to issue a directive

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for the first time to a Commonwealth country that citizens of that Commonwealth country, who indeed had been British citizens two years ago, and who were in trouble, could not even travel to this country without a visa. That was the response, I repeat, of her Majesty's Government. Ten hours' notice was given of that directive, that restriction. Even the Iranians, who were not members of our Commonwealth but who did indeed suffer persecution and terror, were given seven days' notice of the fact that visas would be required. As I say, the constitutional, quite apart from the human, point of view is emphasised by the fact that no other Commonwealth country has ever been issued with that restriction.
I move on, if I may, to the numbers quoted in the Statement. One would have thought that thousands of Tamils had entered this country. The Statement says that there were 500 before the directive and 200-odd just afterwards. Then the complacent statement is made—I am trying to use moderate words—that since the restriction no Tamils have arrived in this country over this weekend and today. Of course they have not, and The Times of Saturday says exactly why. If I may, I shall quote from The Times, from their correspondent in Colombo:
"Yesterday a crowd of about 200 waited outside the closed gates while security personnel stood by. Ten people were allowed in at a time".
I pause there. One could imagine the anxiety, if that be the appropriate word, of those in that queue being watched by the security police lining up to try and get out in order to save lives.
"Ten people were allowed in at a time. A single counter to give and receive forms created frustration but a High Commission official said visa section staff would be increased if the crowds continued".
I ask the noble Lord the Minister: how many staff are now in the Commission to deal with these visa applications, with what speed is it intended to deal with them, and who has the authority—is it the officials in our High Commission—to grant the visas or have the application forms transferred to this country first for a decision to be made?
Lastly, will those who are here be treated with compassion so that they can stay here at least until we are satisfied that they can return to their native country in safety? I ask the Minister: is it correct that what appeared in the press was the instruction of his right honourable and learned friend; namely, that Members of another place would have literally 24 hours within which to make representations on behalf of these people? Will the noble Lord the Minister assure the House that proper, adequate time will be given for these representations to be made? May I appeal to the noble Lord the Minister to ensure that whatever may have been suffered by this country in regard to its reputation in Brussels, our long-standing tradition of honour concerning political refugees, and certainly the treatment of citizens of the Commonwealth, will be upheld by this Government?
Lord Avebury: My Lords, would the noble Lord the Minister agree that while there may be, in a strict interpretation, no individual fear of persecution in that the policy of the Sri Lanka Government is not to murder and torture innocent civilians, there is nevertheless abundant evidence, set out in the
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Amnesty report quoted by the noble Lord, Lord Mishcon, and in other places, that the security forces are out of control and that they murder, torture, loot and rape indiscriminately in the Tamil areas? Apart from the Amnesty report, have the Government studied the report of the Parliamentary Human Rights Group, the representatives of which, Mr. Robert Kilroy-Silk and Mr. Roger Sims, recently spent 10 days in Sri Lanka? Following that visit they concluded that there was forced removal of thousands of Tamil people from their homes on the northern and eastern seaboard and that the figure of 100,000 of such refugees in Mana and Jaffna given by the Government was a conservative estimate; that there was indiscriminate rounding up of all men aged between 16 and 35 years in a large area around any terrorist incident, with the removal of those young men to detention camps many miles from their homes; that beating and torture during interrogation is the norm; that prolonged detention without charge or access to lawyers or relatives of these detainees is also usual; that dozens of political prisoners are detained under the emergency regulations either for trivial offences or on suspicion; and that there is mass killing by the army of innocent civilians.
Is the noble Lord aware that I have received a report just now of an incident in Pankulani, on the road between Trincomalee and Jaffna, when a bus carrying 57 Tamils was stopped by the airforce and 13 of the passengers were shot dead? It was only the latest in a series of massacres by members of the armed forces. Sixty people, for example, were rounded up by the Special Task Force in the Eastern province after being arrested on the 16th, 17th and 18th May and shot and buried in a mass grave near Thanbiluvil. Five refugees were murdered by a soldier in an army camp near Anuradhapura. Seventy-five civilians, including women and children were killed in Velvettiturai on 9th May. Forty-eight Tamil passengers on a bus between Delft and Ninativa were killed on 15th May. One could go on. There are a great many such incidents involving members of the security forces. Are the Government aware that at least 1,300 people, innocent civilians, perished in actions by the security forces during 1984, and that the scale of the carnage is much greater during the present year?
In these circumstances would the Government not be justified in granting exceptional leave to remain, unless there were good reasons to suppose that an applicant was not a refugee, thus taking the onus of proof off the individual, as we did of course, as the noble Lord will remember, in the case of Cypriots following the Turkish invasion in 1974, and in the case of the Iranians, as the noble Lord, Lord Mishcon, has reminded us, following the accession of the Ayatollah Khomeini? Granted that such a policy might create strains on our resources, would the Government not enter into urgent consultation with other receiving countries, with a view to sharing the burden equitably, and deciding on common policies which are in conformity with our obligations under the United Nations Convention on refugees?
In that connection may I ask three questions. First, did the Government notify the Secretary-General of the United Nations of the new procedures now being followed as a result of the Statement by the Home

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Secretary in another place on 20th May, as they were bound to do under Article 36 of the convention relating to the status of refugees? Secondly, how do they purport to impose an additional test of "severe hardship" which is not to be found in the convention? Thirdly, how are they complying with the provisions of Article 31(2) of the convention, which allows refugees a reasonable period and all the necessary facilities to obtain admission to another country?
Is the Minister aware that it is not correct to say, as the Statement does, that no Tamils arrived over the weekend; that I personally dealt with four such persons who arrived at Dover from Ostend on Saturday morning; that I understood from the Home Office official to whom I spoke that there were at least two other groups similarly situated, and that he agreed with me that it was absurd to suppose that my representations could be lodged within 24 hours? That would have meant that they had to be in the Home Office on Sunday, when there would have been no Minister there to deal with them, so he was graciously pleased to extend the 24 hours to 48 hours. That meant that the lawyer from the law centre involved who was dealing with the case had to fetch the persons from Dover to London to interview them and take their statements, and had to go round to my house on Sunday, and that I had to write a three-page letter to the Minister and deliver it by hand this morning. All this places the agencies looking after applicants under the most impossible disabilities.
I should like to ask the Minister whether he would deal with this particular case. What is the situation of Tamils who were legitimately resident in this country, who went abroad temporarily during the currency of their permitted leave to remain, and who are now attempting to return here following the introduction of the new rules? This family with which I have dealt consists of three students who were attending colleges of further or higher education, whose mother had come to see them on a short visit, and who did not intend to apply for asylum. They hoped that by the time they came to the end of their courses of study the situation in Sri Lanka might have improved. But they would not be able to put their hands on their hearts and state, as they have to under the rules, that they were definitely going to return to their country of origin on the completion of their studies. I want to ask the Minister what is the Government's policy on this matter, because it may be that, as a result of their panic measures, they will force many people into applying prematurely for asylum when otherwise they would be perfectly content to remain here as visitors.
Finally, is the Minister aware that consternation has been expressed not only in Britain, by organisations such as Amnesty International and the Joint Council for the Welfare of Immigrants, but from as far afield as Australia? I had a cable from Australia signed by the chairman of the Parliamentary Amnesty Group there, Senator Alan Misson, saying that he was very concerned to read in the Australian newspapers about the policies of the British and Dutch Governments; and I understand that the Dutch have now resiled from a statement similar to that made by the Home Secretary. Would the Government, before proceeding on the course of action that they have started, consult
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urgently with the United Nations High Commissioner for Refugees to ensure that any changes in policy that we finally adopt are examined by a dispassionate observer and found to be in conformity with our international obligations before they are put into effect?
5.56 p.m.
Lord Glenarthur: My Lords, I am grateful to both noble Lords for their comments on the Statement which I repeated. I am tempted to start by dealing with some of the history of the issue which the noble Lord, Lord Avebury, introduced, but I think that the most important point I can make is that we were faced with exceptional circumstances, and exceptional circumstances require exceptional measures. The noble Lord, Lord Mishcon, was quite right when he said that this is the first time that Commonwealth citizens have been subject to a visa requirement. But entry clearance has long been mandatory for Commonwealth citizens wishing to come here for settlement, and it has always been open to Commonwealth citizens wishing to come here for temporary purposes to apply for entry clearance.
The other side of the coin, to some extent, although I can see that it does not fully justify the argument, is that a number of other Commonwealth countries—Australia, Bangladesh, Nigeria and, most recently, India—require British citizens to have visas to go there in the same way. The fact is that Sri Lankan citizens were not British citizens up to two years ago—like all Commonwealth citizens, they were British subjects—and that, I am sure, is a point of which both noble Lords will be aware.
The noble Lord, Lord Mishcon, referred to the Amnesty statement. We shall, of course, have to study this statement with care, but, as my right honourable friend the Home Secretary explained in his Statement of 20th May, to which I referred, we do not believe that the situation in Sri Lanka is such as to require us to allow every Tamil who wishes to stay here to do so.
The noble Lord, Lord Avebury, quoted a number of figures taken from recent times to indicate the severity of the threat to them. Those figures are to some extent at odds with the information that we have. There has been no repetition of the massive violence against Tamils of July 1983, and I am aware of the fact that in that case several hundred died. Of course, the Government have made plain to the Sri Lankan Government our view that there must be a political settlement to such intercommunal problems as these, taking into account the interests and the concerns of all the communities. We shall continue to follow this through.
The noble Lord, Lord Mishcon, asked why it was necessary to impose this requirement at such short notice. The reason was that we were faced, as I said at the start, with an exceptional situation which was caused by a continuing large number of arrivals—some 1,336, or thereabouts—since the beginning of May. That is a very substantial figure which must be dealt with. These people must be found accommodation, and there is a great problem and burden which the staffs at the airports and ports have to take care of. If one had given more advance

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warning, one would only have encouraged the rush of more to come here in the intervening period, which I would not necessarily think would in every case be for the benefit of those who would come. As was made clear in the Statement, there would be those who were faced with return air fares, and so on.
It is not fair to compare this situation with that of Iran. There was a different situation then. That was a direct result of a foreign policy initiative—one in which, I think I am right in saying, other European countries joined. We were dealing with a simpler, pure immigration problem; one that embroiled the whole forum of foreign affairs.
As regards the figures for those arriving over the weekend. I note the remarks of the noble Lord, Lord Avebury, but no Sri Lankan families arrived over the weekend seeking asylum. If they were arriving in some other way, the noble Lord may have information that I do not have. But that is all I can tell him at this moment. I shall come to the 24-hour issue in a moment.
The noble Lord, Lord Mishcon, asked about the number of staff who were involved. He indicated that there could well be delays in processing people in Sri Lanka as a result of this requirement. I can tell him that two full-time Foreign Office staff will be available there from mid-July, but to meet the immediate situation two temporary staff will be going to Colombo today; another two more temporaries will be available there at the end of the week—and they could stay longer to cope with the immediate summer rush, if there is one—and at least two interpreters will be found locally to meet the needs of these people. Additionally, two immigration officers were sent out from the immigration department of the Home Office on Saturday to assist with reinforcement at the High Commission. The noble Lord referred to that article in The Times. I cannot say that the numbers the article gave were absolutely correct, but to allow 10 people or more than 10 people or a great many people into the High Commission at any one time would not have been possible without the staff to deal with this problem. That is why these new staff are being made available.
With regard to referrals, as I understand it the majority will be dealt with there but there may be particularly difficult cases which have to be referred to the Foreign and Commonwealth Office. That, I should imagine, is the normal course of events; but everything that can be done to speed things up will be done.
The noble Lord raised the question of the 24 hours, particularly for Members of your Lordships' House and of another place. There may have been a misinterpretation placed on this issue by the press or perhaps by those who read the press. We think it is reasonable to expect Members of your Lordships' House and others to make representations within about 24 hours. I cannot say that 24 hours is a thoroughly dogmatic figure, and there will be some give and take. Whether a weekend is covered in this way I am quite sure will be a point to be borne in mind by my right honourable friend. I think that the system will cater for that, but if there is a particular case that somebody is going to produce evidence or make a representation within 30 hours or something like that—by saying "30 hours" I am not now making that
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an absolute cut-off point—that is a perfectly reasonable time for representations to be made. It does not refer, as I think might have been represented, to a turn-around time, so to speak, for these people.
Lord Mishcon: My Lords, before the noble Lord the Minister leaves that point, whether it be 24 hours or 48 hours is he seriously suggesting that that is a reasonable time for public representatives to take instructions and to make sure that the facts that reach the Home Office have been checked and that the proper case is made on behalf of these people? Is this the sort of time limit that the Home Secretary feels to be just and equitable?
Lord Glenarthur: My Lords, yes. If it is the case that representations are made to Members of your Lordships' House or of another place in instances of this kind, then a time limit of 24 hours, give or take, is considered by those who deal with these matters to be appropriate. As I said just now in answer to the noble Lord, Lord Avebury, I understand that the machinery can cover weekends. He referred to one particular case over this weekend, but I do not have the details or that information with me. But, as I understand it, yes, it will be generally possible. However, I note the noble Lord's concern.
With regard to Sri Lankans returning from visits abroad, they should obtain visas but there is no reason why they should not be granted visas in order to continue their studies. I brought out this point when I repeated the Statement.
Lord Avebury: My Lords, these people came back from Ostend to Dover and they were not aware of the imposition of these new requirements by the Home Secretary. No one told them when they were in Europe and so the first they knew about it was when they came to Dover and were informed by the immigration officers that the new restriction had been imposed.
Lord Glenarthur: My Lords, there are always people who fall between two stools. I cannot comment on a particular case which the noble Lord brings to me. I am quite sure that if there were particular circumstances unusual to that group who were genuinely returning, if they were, as students from abroad, that would be taken account of by the authorities. What I cannot do is comment now on the case in any great detail.
With regard to the United Nations High Commissioner for Refugees and the issues associated with this, the people we are talking about are not refugees within the terms of the convention. The noble Lord, Lord Avebury, wishes to intervene. I shall allow him to intervene so that I can hear what he has to say.
Lord Avebury: My Lords, the noble Lord cannot say that. If they have not been given an opportunity to present their case it is quite improper for him to say that they are not refugees. The convention does provide that proper tests should be imposed to see whether a person can justify his claim. If the noble Lord is saying that all these people, because they are Tamils, are ipso facto deemed not to be refugees, that is a violation of our obligations under the convention.
Lord Glenarthur: My Lords, the terms are set out quite clearly in the handbook on procedures and criteria for determining refugee status. Yes, it has to be determined, but as I understand it they are not refugees within the terms of the convention. Furthermore, the United Nations High Commissioner for Refugees accepts that. So the notification requirements of the convention do not apparently apply in this case.
The noble Lord asked me whether or not the Secretary-General is aware of the new procedures. As I understand it, that really is covered by the answer I have just given him. With regard to severe hardship, it is important that every case is discussed on its merits. There will be differences in many cases and it is important that it is severe hardship that is established as the reason for the person coming here or staying here. I cannot, I am afraid, give the noble Lord an answer now about whether or not it does comply with Article 31 but I should like to study that article and the point that he makes. I have answered the point about the Tamils who, according to the noble Lord, Lord Avebury, arrived over the weekend, and I shall examine the other points and details that he raised.
Lastly, the noble Lord, Lord Mishcon, asked me whether or not we would continue to look compassionately upon those who may be faced with the dilemma over here. Of course we will look compassionately upon them, but I hope that the noble Lord and indeed the noble Lord, Lord Avebury, will understand that there are occasions when the book, if one likes, does not cater for a particular set of circumstances. That is what happened here. We were faced with a huge influx over the month of May, so sensible precautions for the welfare not so much of ourselves but of them in particular had to be taken so that they would be adequately looked after. The fact is that if they were to come here and were to clog up the centres where they are looked after and accommodation was not available for them, they would not be in the sort of position in which I am sure both noble Lords would like to see them. That is why it was necessary to take the steps which were taken. That is why my right honourable friend said that he imposed this restriction with great reluctance and that he will keep it under review and hopes that it can be lifted again in due course.
Lord Ennals: My Lords, as chairman of the Asian Committee of the British Refugee Council, supported by the Government, which has been following this situation very closely over the past few weeks, may I ask why the Government have not considered it appropriate to consult with the voluntary organisations who have been dealing with this issue? Will the Minister accept further that the rules that have now been adopted by the British Government are more stringent than those of any of our partners in Europe? The noble Lord referred to the question of the United Nations High Commision for Refugees, but the United Nations High Commisioner is extremely concerned about the way in which the British Government have handled this situation. The High Commissioner himself will be in London on
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Wednesday and this is one of the issues that he will be raising.
The noble Lord referred also to the problem of accommodation. A number of organisations are meeting this weekend in my presence to examine the accommodation facilities that we can provide for people who otherwise might have no accommodation available to them. Of course there is accommodation available; that is what the British Refugee Council and the voluntary organisations are there to help provide, but they have not been consulted.
Finally, would the Minister not accept that there is a great deal of difference between permission to stay—which, so far as I know, no one is suggesting—and the other alternative, which is either deportation or a refusal for admission even for a temporary period? Surely the Minister recognises that there is a fundamental difference between the two.
Lord Glenarthur: My Lords, the noble Lord, Lord Ennals, asks why consultation—as he addresses the issue—did not take place. We were faced with very substantial increases, as I indicated. I do not know whether the noble Lord is aware of the figures.
Lord Ennals: Yes, my Lords.
Lord Glenarthur: My Lords, perhaps I may start by giving some indication of the figures to the noble Lord, because I did not give detailed figures before. In the period commencing Wednesday, 22nd May, there were 175 arrivals. On 23rd May, the figure was 38; on 24th May, 115; on 25th May, 22 and on the 26th May, there were 144 arrivals. The next big increase was on Wednesday, 29th May. Between the 21st May and 27th May, 532 Tamils arrived.
When it became quite clear that the position was becoming untenable from our point of view and would lead to very unsatisfactory circumstances for those Tamils who came here, it was necessary to take an exceptional measure. I am certain that representations will be made as a result of it from all sorts of people. Indeed, representations are being made today and I am sure that my right honourable friend will note them most carefully. The fact is, as I have indicated, that one cannot just allow a problem to increase without taking some kind of action to try to stem it; sensible action which, in the end, will benefit those who are trying to come to this country.
So far as concerns the difference between permission to stay and deportation, I accept that there is a world of difference—but again it comes back to the fact that not every person who is coming here from Sri Lanka claiming to be the possible victim of the kind of measure which the noble Lord, Lord Avebury, described is in fact in that particular boat. That is why it is mportant that every single case is considered carefully on its merits. I draw the attention of the noble Lord, Lord Ennals, to the fact that on 31st May the President of Sri Lanka gave our High Commissioner a formal and personal assurance that no Tamils returned to Sri Lanka would be harassed or persecuted in any way.

Social Security Bill
6.13 p.m.
Second Reading debate resumed.
Lord Banks: My Lords, after two and a quarter hours of Statements, we return now to the Social Security Bill. I should like to thank the noble Baroness, Lady Trumpington, for the speech that she made some time ago, when she gave a very comprehensive exposition of the contents of this Bill. As the noble Lord, Lord Stallard, suggested, this Bill will perhaps seem somewhat old hat after the publication today of the Green Paper, and it may be a little difficult to concentrate on the contents of the Bill when more interesting and controversial matters are being widely discussed.
The Bill is inevitably something of a rag bag, as so many social security Bills which come before us are, but we on these Benches give it our general support with some important reservations. Since the Bill deals with occupational pensions among other matters, perhaps I should declare an interest, in that I am a director of a firm of insurance brokers specialising in pensions and life assurance.
I should like to concentrate on four main features of the Bill; the position of the early leavers, the restoration of the abatement of invalidity pension, the extension of statutory sick pay from eight weeks to 28 weeks, and the restructuring of national insurance contributions. Perhaps I may say a few words about each of those in turn.
Taking first the case of early leavers, the principal feature so far as they are concerned—and as the noble Baroness made clear—is that their preserved pensions are to be revalued by 5 per cent. per annum compound to retirement date, or by the rise in prices if that should be less. This is to apply to all who leave after 1st January 1986 and is to apply to all benefits accruing after 1st January 1985.
I believe that we are all familiar with the problems which face early leavers—particularly those who are in final salary occupational schemes. It is right that something should be done to tip the balance in their favour. The figure of 5 per cent. recommended by the Occupational Pensions Board is probably about right. Nevertheless, the cost cannot be ignored. The Occupational Pensions Board says that the cost will be from 1 to 2 per cent. of payroll; that that will be the cost to employers. If one has an occupational scheme where the employer is paying 10 per cent. of payroll to the scheme (which, if it is an ordinary final salary scheme, might well be the figure he is paying), then an increase of 2 per cent. will mean a 20 per cent. increase of cost—if it is all met by the employer. That is not an inconsiderable sum.
As the noble Baroness pointed out, the employer can share the cost with the employees, or he can reduce the overall benefits of the scheme, or he can reduce the benefits of those who stay and who do not become early leavers. But that latter course is one which employers would be reluctant to take.
Since the proposal in the Bill applies only to those leaving after 1st January 1986 and to benefits accruing after 1st January 1985, there will be a very slow
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introduction of benefit. There will be virtually no immediate impact. There will be minimal benefit to be derived by those leaving in the 1980s. But ultimately, as we have seen, there will be quite a considerable cost. In occupational schemes, the future costs will have to be met by funding in advance. In occupational schemes, however, there are different ways of funding—some of which would take up the full cost sooner than others.
I should like to ask the noble Baroness what the Government estimate the immediate overall cost will be. Do the Government foresee a rising cost from this proposal over the years ahead? I should also like to know the position with regard to individual pension contracts, where an employer effects a single policy for the benefit of his employees at retirement. No more premiums would normally be paid after the pension is preserved, as things are at the moment. I can see that in the case of new entrants the premium could be increased to take account of the increase in the cost of the contingency, but what about individual contracts already in existence with a fixed premium but on which a preserved pension is taken after 1st January 1986? How will the increased cost be funded in that case?
Another factor affecting preservation is transfer value. Most funds provide the option of taking a transfer value, and most individual pension contracts effected by employers provide either for a transfer value or for the individual policy to be assigned to a new employer. Nevertheless, I support the introduction of an obligation to provide a transfer value. That provision is made more significant by the increasing popularity of Section 32 policies; that is to say, where a transfer value is transferred to an individual single premium policy with a life office. That can be on a with-profits or unit-linked basis and offers the possibility of a much better rate of increase than 5 per cent. per annum. The transfer value is to be the equivalent cash value of the preserved pension. Can the noble Baroness say how the discussions with the actuarial profession are progressing and whether the Government are well advanced with the provision of the necessary regulations determining the equivalent cash value?
Turning now to the restoration of the 5 per cent. abatement of invalidity pension, the noble Lord, Lord Stallard, pointed out that this was a temporary measure introduced in 1980 pending the application of taxation to the invalidity pension. We on these Benches opposed it at the time and now we find that, in fact, this benefit is not to be taxed. Therefore, it would seem that the measure was originally introduced for no ultimate purpose. Of course, we welcome the restoration of the abatement but regret that nothing is done to compensate for losses sustained in the years 1980 to 1985. I think it is right to say—no doubt the noble Baroness will correct me if I am wrong—that by November 1985 a single person will have lost a cumulative total of £354 and a married couple a total of £569 as a result of this temporary abatement which was imposed for no good reason, as it turned out in the long run, unless a Government saving is so regarded in this connection. Do the Government feel that there is a moral obligation to replace that loss?

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On the extension of the statutory sick pay from eight weeks to 28 weeks I must say that I felt the Government went ahead rather quickly when they put this provision into the Bill now before us; which, of course, has been before Parliament for some time, though it only now comes before your Lordships' House. I do not feel that at the time they decided to embark on it they had full information as to how their original eight-week period was working out in practice. According to the noble Baroness—and I believe this is so—it has gone into operation reasonably smoothly. Nevertheless, the Public Accounts Committee in another place said in March that one in three sickness payments made to staff under the statutory sick pay scheme were found to be wrong. That figure is disturbing.
As a result of the extension to 28 weeks most employees will no longer be entitled to state sickness benefit at any time because at the end of 28 weeks they pass, if they are still sick, to invalidity pension. It is only the self-employed, the unemployed and a small proportion of employees who are excluded from statutory sick pay, but the rate of national insurance sickness benefit compares favourably with the rates paid under statutory sick pay, particularly so far as low paid workers are concerned. For example, a married man on £60 per week would get a sickness benefit, if he were on that, of £44·5 but a statutory sick pay benefit of only £32·26. That is nearly £12 per week less.
We on these Benches are not happy about these different rates. As I understand it, the Government are making a saving of £200 million on the move to the 28-day period. There are offsetting expenses and I believe that, in the end, because they are going to compensate employers in a particular way, the Government lose more than they gain. But the Government are making a saving on this particular operation of £200 million, which would seem to be £200 million at the expense of the poorest; but perhaps the noble Baroness can show me whether I am wrong.
There is also the question of protection for the employee. The employee can take his employer to the county court if he feels that he is not getting the correct amount. However, would it not be right to give power to the Department of Health and Social Security to force a reluctant employer to pay the correct amount?
Finally, I should like to say a few words about restructuring of national insurance contributions. This, as has been pointed out, was not in the original Bill but was introduced following the Budget. We support the extension of payment by the employer to earnings about £265 per week. Indeed, I have advocated that in this House in the past. The objection is made that this means additional cost for employers, but it is important to emphasise that the case for payment by employers—and employees, I would say—on earnings over £265 per week is quite separate from the question of the rate of contributions. For example, if the Government wish to receive the same revenue into the National Insurance Fund, they could apply the percentage contribution by employers and employees to all earnings above the present upper limit and reduce the rate of contributions. I think that would be a fairer system.
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Of course, we on these Benches want to see employees' national insurance contributions integrated with income tax. I have suggested that that income tax should be divided between two accounts: one going to projects which involve the Government in the consumption of resources and the other to transfers of income. We should like to see the employer's contribution become a payroll tax. We appreciate very much the intention to ease the national insurance burden on the lowest paid, but it raises certain problems. It replaces one major poverty trap with a series of lesser traps at £35·50 per week, £55 per week and £130 per week. It may lock groups of workers into wage bands just below one of these points to avoid the poverty trap, on the one hand, and higher national insurance contributions for the employer, on the other. To avoid these difficulties it might have been better—I say no more than that—to exclude, say, the first £10 of earnings and pay the full 9 per cent. rate on earnings above that. I say 9 per cent. which is, of course, the rate for employees, and the appropriate rate for employers is 10·45 per cent. It will cost about the same as the Government's changes. Admittedly, it gives some benefit to all, but it will be of greater proportionate benefit to the lowest paid contributors, though to a slightly lesser extent than the Government changes.
There are many other proposals in the Bill to which I have made no reference. No doubt other speakers will deal with them, or we shall discuss them in Committee. But in dealing with the four areas of early leavers, invalidity pension, statutory sick pay and national insurance contributions I have shown that while we do not oppose the Bill—indeed, we welcome much that is in it—nevertheless we have some significant reservations.
6.29 p.m.
Lord Boyd-Carpenter: My Lords, your Lordships' House is in rather an odd situation on the Second Reading of this very important Bill. First, for the past few weeks we have had not so much leaks as the equivalent of a burst water main of information about the forthcoming Statement, including wholly accurate forecasts in the press on the treatment of the state earnings related pension. Then, after two speeches on the Second Reading, from my noble friend and the noble Baroness on the Front Bench opposite, we had one of the most important Statements this House has heard for a long time on the same subject as the Bill. Although I am too old a hand to start trying to pronounce on the Statement without having read it carefully, it seems possible that it makes a part of the Bill out of date.
I would say to my noble friends on the Front Bench in all seriousness that this kind of procedure is not quite fair to the House. I do not think that it does the House very much good to have broken-up debates of this kind. I suggest that if the Statement were to be made this afternoon, the Second Reading of the Bill ought to have been taken on another day and other business substituted for it. With all due respect, I should like to make a protest along those lines.
The Bill itself, as the noble Lord, Lord Stallard, said, is in the circumstances made to seem a little unreal, which is a pity in view of the fact that, if one omits

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contrast with the contents of the Statement, it is of very considerable importance. I am bound to say that I had a good deal of what I might almost describe as professional sympathy with my noble friend. I was Minister of Pensions and National Insurance, as some of your Lordships may recall, for six-and-a-half years, and it fell to me to introduce the Second Reading of quite a number of national insurance Bills. I am bound to say that I never allowed my colleagues to interpose a Statement on the same subject in the middle of them.
Baroness Trumpington: My Lords, may I intervene very rudely to say that that was in another place?
Lord Boyd-Carpenter: My Lords, I would hope that my noble friend is not suggesting that another place conducts its business better than this House. That would be a remarkable observation. However, she is perfectly right in saying that I had the task of doing that in another place, and that made me admire all the more the way that she introduced the Bill and then indulged in considerable exertions in reply to criticisms of the Statement. I am not, as I said, going to seek to comment at this stage on the Statement. With the noble Lord on the Liberal Benches, I hope and believe that we shall be debating that before very long. It is of such great importance that this House would not be fulfilling its proper role if the Government did not find time for a debate upon it.
But I shall comment, if I may, briefly on one or two aspects of the Bill. I come first to the provision in Clause 2 about early leavers. Everyone has sympathy with the position of early leavers, but I wonder whether your Lordships have reflected on certain aspects of the provision under which an early leaver, if other arrangements are not made, is to have his or her preserved pension uprated by either 5 per cent. or the rate of inflation, whichever is the lower.
In the first place, there is no obligation on an employer to have a private scheme at all, and it is therefore perhaps rather odd, if some employer decides to operate one, to impose an additional and quite expensive obligation upon him. Then there is the fact that there is no provision in law to compel an employer to uprate or update the pensions being earned by those of his employees who stay with him. Not many employers outside the public sector grant full indexation. Some do not feel able to afford even a modest increase in the pensions earned by those who stay with them. Therefore one of the possibly odd consequences of the Bill and this provision could be that those who leave an employer and go to work elsewhere will get a better deal in respect of their preserved pension than would be obtained by way of uprating by those who stay with that employer. That could create considerable anomalies, and I wonder whether it has been seriously considered by the department.
Then Clauses 3 and 5 impose additional burdens on those employers who operate employers' occupational pension schemes. I again remind your Lordships that there is no obligation on an employer to operate such a scheme at all. It would seem to me that those provisions in Clauses 3 and 5, on top of that which I have already referred to in Clause 2, could well operate as a discouragement to employers. They would
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certainly discourage employers who do not have a scheme at the moment from operating one and discourage employers who have a scheme from improving it.
Comment was made, and rightly, that if not one of the consequences then one of the sequels of the Labour Government's 1975 Act was to check the flow of development of private occupational schemes. In that context I am sorry that the noble Lord, Lord Ennals, is not in his place. He is of course quite wrong in saying that the 1975 Act introduced earnings-related pensions into the national insurance scheme. They were in fact introduced by the Act of 1959. That Act, with its contracting-out provisions—and this is the relevance of this point—was deliberately designed to encourage the development of schemes in the private sector. It did in fact have that effect, and for the years following 1959 there was a substantial growth in those schemes.
I am very much afraid that those provisions in the current Bill will certainly do nothing to revive the tendency of employers to introduce schemes and may indeed have a discouraging effect. I hope that my noble friend when she replies will be able to say something by way of encouragement to employers to proceed with the development of schemes and to encourage those employers who do not have them—and there are still a considerable number—to introduce them.
The next point to which I want to refer is in Clause 7, with its enormous uprating of the employers' contribution in national insurance carried without limit to the limit of salaries. When I was responsible for national insurance the contributory principle which Beveridge had enunciated held sway. Most people made their national insurance contribution with a feeling, and a right feeling, that they were getting a jolly good bargain. Their employers were compelled to make the employers' contribution, the Exchequer put in a contribution and in fact people felt that they were getting a very good bargain from a favourable contributory scheme.
With the abolition of the card and stamp and the move to collection through the Inland Revenue and through PAYE that feeling of the contributory principle—call it, if one likes, emotion—was very much diminished. But when we now proceed to use national insurance contributions as a means of taxation, I think that we are finally putting paid (perhaps that is the appropriate word) to the contributory idea. The late Labour Government were very much to blame for the surcharge which they imposed on employers' national insurance contributions, and they were very properly and rightly criticised for that by my noble friends. But to carry the employers' contribution up to the limit of whatever salary there may be is surely to throw any idea of the contributory principle out of the window.
More important than that could be its practical effects. The changes being made in contributions both by employer and employees are going, and rightly, to give considerable relief in respect of the lower paid—their own contributions and those of their employers. But for certain types of company, particularly in the service industries, carrying the 10.45 per cent. charge on salaries right up to the limit of salaries will involve a very considerable additional charge.

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This is not perhaps serious in the case of the old fashioned type of heavy industry where the great majority of people are on moderate levels of pay. But when you are dealing with advertising, public relations, and types of banking and insurance, there are often, proportionately, a very substantial number of people on very high rates of salary. Those companies will find themselves exposed to a substantial additional tax. I received only this afternoon a letter pointing this out from a firm, which I do not know, engaged, I understand, in the advertising industry. I really think that my noble friend should look at this to see whether, inadvertently, some harm may be done to these very important service industries which today contribute so substantially to our favourable balance of payments.
My final point relates to statutory sick pay and the extension of it to 28 weeks. The figure of 28 weeks is an odd one. It almost has a touch of "Think of a number". If it had been 26, I could have understood it as representing half a year. But 28 has an arbitrary look about it. I wonder whether it has been very fully and carefully considered in regard to its effects. What about the small employer? What about the person who goes sick within a few weeks of retirement? Is his employer, if he goes sick perhaps four or five weeks before he is due to retire, to be responsible for operating the statutory sickness pay for another 21 or 22 weeks after he would normally have finished his job? I wonder again whether this has been thought out. I wonder very much how the particular figure—if there was to be an increase at all—of 28 weeks was arrived at.
While there is much in the Bill that I feel is excellent—the reduction in the Class 2 contribution is a real contribution to social justice and to good sense—I am inclined, as your Lordships may have guessed, to regard it as being something in the nature of what used to be called the curate's egg but which, with inflation, perhaps we should now call the bishop's theology.
6.42 p.m.
Baroness Faithfull: My Lords, this Bill, in the main, is to be welcomed. However, like other noble Lords, I wonder why it is separate from the Bill that we are to consider later. I should like to make four brief points. On the question of the transfer of pension rights, I think that, from a practical point of view and from the point of view of the workforce, the possibility of transferring one's pension from one firm to another has enormous merits. I have had personal experience of this. I was able to transfer from central to local government. I believe that I was enriched in both my jobs by having had experience in another sphere. Like my noble friend Lord Boyd-Carpenter, I am worried about the fiscal side of the transfer and the transferred pensions. I am therefore in some difficulty. While agreeing in principle, I share with my noble friend Lord Boyd-Carpenter the view that it presents real difficulties.
The invalidity pension has been mentioned by the noble Lords, Lord Stallard and Lord Banks, and by my noble friend Lord Boyd-Carpenter. The restoration of the 5 per cent. abatement of invalidity pension
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gives cause for concern that many invalidity pensioners will not gain the full benefit because of other changes to the payment of invalidity pension proposed in the Bill. This was a point made by the noble Lord, Lord Banks. Invalidity pensioners deserve compensation for the five years during which their pension will have been abated. The original justification for the abatement was that it was in lieu of taxation. It would appear that taxation has now proved impracticable. Should the invalidity pensioners have to hear the cost of this mistake?
Will not the extension of the duration of statutory sick pay to 28 weeks mean lower benefits for the low paid, who are subject to a wage stop under the statutory sick pay scheme, and for those with adult dependants? Now that the statutory sick pay scheme will have been replaced by sickness benefit for most people, must there not be improvements to give these two groups a fairer deal?
The position of those employed by small businesses should also be examined closely, as a recent survey by the National Federation of Self-Employed and Small Businesses suggested that nearly one in four of small businesses are making errors in the payment of statutory sick pay.
Finally, on the question of housing benefits, a new clause to the Bill was tabled just before Report stage in the other place to amend the housing benefit subsidy provisions of the Social Security and Housing Benefits Act 1982. This now appears as Clause 20(1)(b), which has the effect of giving the Secretary of State power not to pay subsidy on any amount which he considers it unreasonable to meet in in any particular case. During the passage of the Social Security and Housing Benefits Act through Parliament many of us were concerned to ensure that satisfactory arrangements were made to protect the undertaking which has been given by the Government to the effect that there would be no additional costs to local authorities arising from the housing benefits scheme.
I imagine that this leads to the prevention of the exploitation of the subsidy arrangements by one or two local authorities which have sought to do so without the Government having to devise a solution by amending the subsidy order to meet each new ploy. This is fully appreciated. Nevertheless, is not the proposed new power unnecessarily wide, since it is left entirely to the Secretary of State to decide what is unreasonable? Furthermore, he could apparently make any reduction in the subsidy otherwise payable to any authority without reference to anyone. Perhaps my noble friend the Minister can comment on this matter in her reply.
6.47 p.m.
Lord Mottistone: My Lords, like other noble Lords, I, too, welcome the broad principle of the intentions behind the Bill. I should like to congratulate my noble friend the Minister on the clear manner in which she explained the Bill to us. I have to declare an interest in that I am advised by the Cake and Biscuit Alliance and by the Confederation of British Industry to whom I am formally a parliamentary adviser. I have also been advised by the Engineering Employers' Federation and by other bodies. I wish to mention three particular matters of concern, all of which have been touched

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upon by other noble Lords, though perhaps not in the detail with which I hope to mention them to your Lordships. I do not want however, to take too long in doing so.
The Cake and Biscuit Alliance points out to me the anomalies potentially introduced by the brackets created in Clause 7(2) of the Bill to which the noble Lord, Lord Banks, referred in some detail. The concept of wage/earnings bands with percentage levies rising as earnings increase seems fair and quite elegant, but it fails to take cognisance of problems induced at the thresholds of each band as it is traversed by the employees' wage or earnings increasing. Having studied the matter, one sees that a movement from one band to another imposes a penalty upon the employee and the employer by the increased national insurance contribution, particularly at the margin. This penalty could be a continuing penalty or a one-off penalty, depending on whether earnings fluctuate across bands regularly or whether, when wages are increased from time to time, the actual increase is devalued by the extra national insurance contribution involved. There may also be an effect of income tax. But for the purposes of the example that I shall give your Lordships, that is ignored.
One can imagine a wage bargaining situation where employees and their trade unions say that a wage increase which takes a person from a wage or earnings level just below a threshold to just above a threshold is devalued by the extent of the new contribution, which increases by 2 per cent. For example, a wage increase of, say, 5 per cent. can be reduced in this way to 3 per cent., and employees will certainly react quite strenuously to such a situation. What is more, this phenomenon can be almost a continuing one where wages and/or earnings fluctuate across thresholds week by week.
One effect of that might be to persuade employees that they should decline extra work or work on shifts or decline to earn small weekly bonuses if that means a loss of net pay. In addition, wages offices, supervisors and managers could have a hard time from employees whose wages and/or earnings cross thresholds, particularly if the numbers involved are a high proportion of the workforce—and in many companies that will be that case.
Another effect from this point of view will be that the employers will be the subject of both employee and union pressures to add the national insurance loss to the wage increase for employees caught by the band thresholds. For example, a 5 per cent. wage increase, devalued by 2 per cent. because it crosses a threshold, may be compensated wholly by a 7 per cent. increase for those employees affected. Wage structures for the whole workforce would then have gaps in them corresponding to the penalty areas. With each year's changes in the bands arising from the Budget, this could become an annual pain in the neck for negotiations, as the same people would get caught in the trap each year, particularly if the bands discretely move in accord with the RPI or the level of average wage increases.
The point of telling you Lordships this at some length is that I rather suspect that the Treasury and perhaps the DHSS are not as familiar with the problems of industrial relations and wage negotiations
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as perhaps are their colleagues in the Department of Employment, who I think have had nothing to do with the preparation of this Bill. I believe that it would be very wise if my noble friend, if I may put it this way, invited her colleagues to get in touch with the department that understands about wage negotiations, because the value of what is suggested in these brackets may be nullified for the kind of reasons that I have endeavoured to spell out. I believe that that needs to be dealt with fairly quickly before we come to the next stage of the Bill. In fact, as I see it, it will be very difficult to produce suitable amendments to make the necessary changes without upsetting the whole principle of what the Government are clearly trying to achieve.
I think I gathered that the noble Lord, Lord Banks, had some form of a solution, and if he has I should be delighted to talk to him about it afterwards because this is what is needed. But perhaps he too was looking at it—and he will forgive me if I am wrong—from the point of view of pension management and that sort of thing rather than from the point of view of the industrial relations problems that will stem from this particular anomaly. I should be most interested if my noble friend the Minister has anything to say about that aspect of this particular problem when she winds up the debate. If not, perhaps we might discuss it at some stage so as to make sure that the Bill is workable, which I suspect in its present form in this particular area it is not.
My second point is raised by the CBI. It concerns the potential effect of the abolition of the upper earnings limit, especially in the larger and principal export-earning companies and in the newly-emerging and very important so-called high-tech companies. The abolition of the upper earnings limit for employers' contributions is, I understand, estimated by the Treasury to yield £820 million in a full year. The alterations of the rates at the lower end are estimated, again by the Treasury, to save employers enough to leave them better off by £80 million in a full year and £30 million in 1985–86.
The problem with those figures is that they are global, and in the Treasury's calculations "employers" covers the full range of both the private and the public sectors. Given the distribution of employees within different income bands in each sector, it is likely that the benefits to the private sector are less—probably considerably so—than the figure offered by the Treasury.
As the noble Lord, Lord Marsh, said earlier when my noble friend prevented him from developing his theme, there are many companies, particularly large ones and not necessarily high-tech companies—the service industries also fall into these brackets—which have calculated that they will lose several million pounds because of the way in which this abolition of the earnings limit has been worked out. To cope with their increased costs many of those firms may well choose an option which could produce the very opposite results from the Chancellor's point of view than that which he intended. Rather than lose employees at the upper end of the income scale, who are very often the most important employees for the company's development, firms will shed labour at the lower end.

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In addition, there is the question of the dynamic impact of the new system. If firms have to cover the costs of the new charges out of profits, investment may suffer and the overall level of activity may fall. This will be particularly so if the firms most affected are those enterprises operating in the high value added areas of the economy.
I shall be tabling an amendment to enable advantage to be taken of the beneficial aspects of the scheme at the lower end of the scale while correcting the adverse impact at the higher end. It will seek to amend paragraph 17 of Schedule 5, which the Government amended at the last stages of the Bill's passage in another place, but they did not do it well enough to solve the problem for the companies concerned.
Thirdly, the Engineering Employers' Federation has pointed out that there are certain aspects of the revised rules for occupational pensions which cause concern. That was spoken to very thoroughly by the noble Lord, Lord Banks, and indeed by my noble friend Lord Boyd-Carpenter, and I shall not detain your Lordships long on this particular point. The federation has strong reservations about the changes for the revaluation of pension rights of early leavers and for the disclosure of pension scheme information. Its members are firmly committed to good practice in both fields. But the Government's proposals go far beyond what is reasonable to impose on employers whose schemes are, after all—and my noble friend Lord Boyd-Carpenter made this point very thoroughly at least twice—voluntary in nature.
The essence of their anxieties is, first, that the proposed 5 per cent. per annum maximum revaluation figure for early leavers is excessive and should be reduced to 3 per cent. I noticed that the noble Lord, Lord Banks, thought that 5 per cent. was about right, but they definitely and for other reasons—and I shall not waste your Lordships' time now in explaining—thought that 3 per cent. seemed more reasonable. This is because deferred pensioners should not be given preferential treatment over active pensioners. This was again a point made by my noble friend Lord Boyd-Carpenter. Also other revaluation should be calculated on a year-by-year basis and not over the period of deferment as a whole.
It so happens that my occupational pension revaluation figure is 3 per cent. I should like to suggest that this is a good reason why I support the present Government, because I believe that they are the only Government who could possibly get the inflation rate down to 3 per cent. They have not succeeded, but no other Government have a chance of doing that with their policies.
The second point is that the proposal for a public deposit register of pension schemes is quite unnecessary and should be discarded. It also trespasses on the ground of investigating private information. I was pleased to note that my noble friend the Minister said that she was open minded on this point. I hope that this means there will not be much trouble when we put down an amendment to try to get it swept away.
Those are my main points which will give cause to amendments of various sorts as we take the Bill
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through its later stages. There are two main points in all these matters of detail in this complicated Bill which I believe require emphasis. First, the proposals almost certainly hit seriously at the competitive ability of our most important export-earning companies. Secondly, in those and other efficient companies they will probably have the reverse effect to that intended by causing companies to dispose of their lower-paid employees rather than hold on to them in order to ensure the retention of their higher paid vital experts and capable managers. I trust that the Government will listen and endeavour to accept changes to the Bill which will safeguard the competitive ability of all our companies on which the wellbeing of us all absolutely depends.
7.3 p.m.
Lord Kilmarnock: My Lords, as my noble friend Lord Banks has already said, there are parts of this Bill that we can welcome and others which cause us some misgivings. The noble Baroness, when introducing the Bill, referred to her speech as a "magical mystery tour". It might perhaps have been less so if the Bill had not been at least partly overtaken by the Statement which she repeated this afternoon.
As regards Part I, dealing with the rights of early leavers in occupational pension schemes, I believe that this represents a step in the right direction. The phrase "early leaver" has always struck me as slightly unfortunate, with its pejorative ring conveying the impression of someone who drops out and does not stick to his last, whereas the people we are really talking about are those affected by takeovers and involuntary redundancies as well as those who voluntarily change jobs in order to improve their prospects in a rapidly changing labour market.
The measures proposed by the Government in the Bill, and not least the obligation to provide a transfer value, represent a gain in fairness and a contribution to job mobility. Both the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Mottistone, said that there was no obligation on employers to have a scheme at all at present, but after the Statement today it appears likely that such schemes will become obligatory in future. I think that that gives an added point to these proposals.
There can of course be arguments about the precise percentage of revaluation of deferred pensions. As the noble Lord, Lord Mottistone, said, some employers have complained that a ceiling of 5 per cent. is too high and that 3 per cent. would be more appropraite. We as a party, as an alliance, are very much against unduly increasing employers' costs. However, certain commentators have pointed out that many pension funds are actually revaluing by as much as 8 per cent. per annum and have suggested that a 5 per cent. ceiling is too low. This might seem to suggest that on this occasion at least the Government have got it about right.
However, I hope that the Government will keep the ceiling figure under review. If pension fund managers and trustees have a good case for revision downwards after a year or so, the Government will no doubt listen to them. Equally, if inflation continues to edge upwards and the RPI rises significantly above 5 per cent. over any extended period of time, members of

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pension schemes affected by the Bill are going to look increasingly askance at indexation in the public sector and contrast this with their own more precarious position. On all these counts, then, the 5 per cent. ceiling should be kept under review.
On the proposal to set up a register I must say that I disagree with the noble Lord, Lord Mottistone, here. It seems to me that this is right, particularly in view of the Government's intention, announced earlier today, to shift more of the responsibility for income protection in retirement into the private sector. No respectable scheme has anything to fear from it, and it will provide a significant safeguard for employees in a field with many thousands of schemes, not all of equal quality. I hope therefore that the Government will not weaken in this resolve. The noble Baroness spoke of "open mindedness and flexibility", but I hope there will not be too much flexibility here.
It is of course open to debate whether a new body is required for this or whether it could not be done by the existing Occupational Pensions Board. That is certainly a debatable point. But however the register is administered, I have for a long time believed that the greatest possible transparency of operations should be a requirement on the pensions industry. The Company Pensions Information Centre has been doing some valuable work over a considerable number of years in this respect, and there are many instances of good practice. But these are not universal. It is, for example, well known that there is considerable misuse of the tax provisions relating to occupational schemes by some corporate treasurers who use them to park surplus funds so that they will increase without taxation.
It was suggested in another place by Sir Brandon Rhys Williams and others that the register could perform a useful function if, among other things, it required schemes to declare the element that is funded on behalf of individual beneficiaries separately from that part of the fund held by the trustees but not allocated to individuals, the income of which it might then not be unreasonable to tax. This, it was suggested, would influence managers and trustees to allocate the maximum to individuals with a corresponding improvement to employees' entitlements. I would be interested to hear the Government's comments on this suggestion.
A further point is that Schedule 2 appears to be only permissive. Can the noble Baroness say whether the register will definitely be set up and, if so, when? I am afraid I have to tell the noble Lord, Lord Mottistone, that if he tables an amendment, I, at any rate, shall oppose it.
As regards Part II, concerning the new method of calculation of national insurance contributions, apart from the problems my noble friend Lord Banks mentioned in relation to the poverty trap in that new minitraps are introduced at £55, £90, and £130, I think it is important to consider the likely general effect of the proposals. According to Simon and Coates, the City analysts, there is in fact going to be little aggregate effect on labour costs, because in a full year firms will save about £900 million on the national insurance contributions of those earning below £130 a week and pay out £800 million more on those earning above £265 a week.
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The danger is surely that when these large sums are disaggregated we could have a situation in which firms employing high-skilled operatives are disproportionately penalised and may then be tempted to cut back on hiring high-skilled employees. This, I think, was the point which the noble Lord, Lord Marsh, was trying to make when he clashed swords with the noble Baroness earlier in the debate. There is in fact a general tendency in much of the Government's legislation to promote a low wage, low-skilled economy, whereas the national interest surely demands a high-wage, high-skilled, high-value added economy.
I think it has been calculated that these proposals may have the effect of creating 100,000 low-paid and mainly part-time jobs. In the present climate this is not to be sniffed at. But it would be a great pity if there were a corresponding decline in jobs in high-technology industries, and some service industries, as the noble Lord, Lord Boyd-Carpenter, mentioned. A close watch should therefore be kept on the overall effect of this restructuring of national insurance contributions.
My noble friend has welcomed—and I fully agree with him—the decision to restore the abatement of the invalidity pension which was made by the Social Security (No. 2) Act 1980. But I have to say that I have heard from RADAR—the Royal Association for Disability and Rehabilitation—that their joy is tempered by the counter-effects, in their view, of Clauses 9 and 12. The Explanatory and Financial Memorandum tells us that in the first full year, 1986–87, the cost of restoring the abatement of invalidity pension in Clause 15 is £65 million, but according to RADAR the Government will save £70 million under Clause 9 and £20 million under Clause 12. They therefore contend that the overall effect will be to reduce the income of the long-term sick and their families by £25 million. I shall not go to the stake on these figures, but they appear in the brief and I should like to check them. I think the noble Baroness referred to duplication of cover and said that the combined effect of the Government's proposals would be cost-neutral. But if the figures that I have been quoting are anything like correct the provision does not seem to be cost-neutral at the receiving end. This is something we shall want to address at the Committee stage.
On Part III of the Bill, extending statutory sick pay from eight weeks to 28 weeks, I have some serious reservations and a number of queries to put to the Government. The likely effect on employers' costs of this measure is worrying, and this applies particularly to small businesses—that was a point made by the noble Lord, Lord Boyd-Carpenter—for which the scheme will involve extra paperwork, to say nothing of cash flow problems. The absence of one or two members of staff for a lengthy period could create serious cash difficulties. We may therefore want at Committee stage to move an amendment to exempt businesses with, for example, fewer than 20 employees, unless the Government can offer some alleviation of these problems. I shall listen with interest to what the noble Baroness has to say on this point.
More generally, I should like the Government to explain with greater clarity the financial reasoning behind this measure. In the Explanatory and Financial Memorandum, on page viii, the Government say that

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there will be a manpower saving of between 300 and 400 in the DHSS, which leads one to suppose that an equivalent cost, or something like that, will be unloaded on to employers. In fact, I think the noble Lord, Lord Stallard, implied that it would cost employers more because they would not have the benefit of the same economies of scale. On page vii, in the section headed, "Financial Effects of the Bill", we learn that the National Insurance Fund will lose about £285 million in a full year as a result of reimbursement of employers under the extended scheme, but will gain £200 million in savings on sickness benefit which will no longer be paid out, and a further £40 million, mainly from employees' contributions on SSP. At the same time the Consolidated Fund will gain from income tax on SSP to an unspecified amount; and the overall effect, the Government estimate, will be to save about £200 million in public expenditure terms. That seems to coincide neatly with the loss to recipients of £200 million in sickness benefit, which reinforces the point made by my noble friend Lord Banks that this will hit people at the lower end of the scale.
Finally, can the noble Baroness say whether these figures take into account the manpower savings? At first sight it would appear that they do not. I am not trying at this stage to pass any final judgment on these figures. I simply believe it would be helpful if we had a clearer picture of what net overall savings the Government expect to make out of this extension of statutory sick pay. Only then can we form a clear view of the real cost to employers and employees, both of which groups, it seems to me, are likely to be adversely affected by the scheme.
I have one final point to make, which concerns Clause 20. It is essentially the same point as that made by the noble Baroness, Lady Faithfull. The Association of District Councils, of which I have the honour to be a vice-president, is extremely worried that the effects of this clause will be to breach the undertaking which was given by the Government that there would be no additional costs to local authorities arising from their new responsibilities for the housing benefits scheme. It was as a result of ADC representtions that Section 32(3) was written into the 1982 Act. One of the planks of this agreement, it will be remembered, was that local authorities would be subsidised to the full extent of the costs of administration of the scheme, and also would not incur more than 10 per cent. of the rebate costs.
They fear now that Clause 20(1)(b) of the present Bill could undermine the 90 per cent. subsidy principle, in that it is too unfettered and too wide-ranging, as deductions made under it would be entirely within the Secretary of State's discretion and would not be subject to affirmative or negative resolutions in Parliament, nor any statutory requirement to consult bodies representing local authorities. While appreciating the Government's wish to prevent exploitation of the scheme by a few authorities (which was mentioned by Lady Faithfull) the association considers that the existing powers of the Secretary of State are adequate for this purpose and that the proposed powers in subsection (1)(b) are unnecessary and undesirable.
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I shall listen with interest to what the noble Baroness has to say, and if she cannot satisfy me on this point then I shall want to move an amendment at Committee stage to ensure that local authorities are left in no worse a position than they are at present in relation to housing benefit. If that is possible it is something that the noble Baroness, Lady Faithfull, and I might talk about.
As my noble friend has said, there is a good deal in this Bill that we support, but we have significant reservations. We believe that there is room for considerable improvement in Committee. The Government may therefore expect, and I give the noble Baroness notice, that we shall table quite a number of amendments from these Benches.
7.16 p.m.
Baroness Jeger: My Lords, I feel there is an air of unreality in this Chamber as we try to return to the Social Security Bill after the important and far-reaching Statement that we listened to earlier on the same subject. In view of that news, this debate is largely a grotesque irrelevance. The Bill is also grotesque in its form and purpose. This is, I regret to say, true to recent tendencies in the DHSS to send to Parliament Bills which are a ragbag of disparate ingredients, of what are called in the Long Title "connected purposes" but which are manifestly disconnected. In this one measure we are to deal with occupational pensions, gratuities to members of the Horserace Totalisator Board, statutory sick pay, pensions for members of the Gaming Board, changes in pneumoconiosis benefit and subsidies in housing benefits. I welcome the inclusion of the fact that married women entitled to the over-80s pension at the lower rate will qualify for the standard rate paid to men and other women over 80. This is no way for legislation to be drafted and brought to this House. It makes it difficult to have a coherent discussion at Second Reading. When we look at the details we shall be raising many more points in Committee, but I feel I want to register my protest because we have had several social security Bills which have been unsatisfactory in their form.
I join with other noble Lords who have welcomed the restoration of the 5 per cent. abatement in invalidity pensions, but it seems that there is to be no back-payment compensation for this deprivation. I hope that the noble Baroness will be able to confirm whether these people are to receive any compensation for their five year's deprivation. Discussion in another place suggested that only half of them would benefit.
I was interested in what the noble Lord, Lord Kilmarnock, said about the unsatisfactory aspects of other clauses, particularly Clauses 12 and 14. If we are to reinstate the 5 per cent. invalidity benefit it seems to me that the Government are saving £70 million by the provisions of Clause 9, which I shall not weary your Lordships by reading, and that about £20 million will be clawed back under Clause 12. It may be that I am wrong because I am totally innumerate, but these are the figures I have been given, and it is worrying in what seems to be a generous part of the Bill to find, if one reads further, that that generosity is dissolved.

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I share the feelings of the noble Lord, Lord Stallard, that there was absolutely no need to put these upratings into the Bill. I wish that I could understand why. There is no need for primary legislation to uprate benefits. Surely this could have come in the annual upratings. Why could not these restorations be paid immediately instead of having to wait for the tedious processes of this massive Bill? This is a carelessly-thrown-together Bill and it takes on board substantial provisions which were born in the Budget and which should have been included in the Finance Bill. This is much more a Treasury Bill than it is a Social Security Bill. It is such a shoddy Bill that after Committee stage in the other place the Government themselves introduced at Report stage 41 amendments and new clauses. I cannot remember in all my years in the other place a Bill coming to Report stage with so many amendments which had not been considered in Committee. I think that that alone is evidence of the poor drafting and of the uselessness of this Bill. Many of those amendments were very substantial changes to the Bill as it was committed after Second Reading and during Committee stage.
This House is a revising Chamber, so we shall endeavour somehow to do our duty; but improving this Bill would make the labours of Sisyphus, as he rolled his heavy stone eternally uphill, look like a rest cure. But the greater part of the Bill, as other noble Lords have said, is concerned with occupational pension schemes, and your Lordships will be relieved to hear that I do not propose to take up your time with a great dissertation on that. Of course the proposition which we heard earlier about the abolition of the state earnings-related pension scheme means vast changes in the whole field of occupational pensions and we cannot discuss these things separately. There will be a transfer of thousands of workers from the state scheme to private schemes, so that today, to a large extent, we are wasting our time. We appreciate the need for occupational pensions to be portable; we deplore the losses of early leavers, especially when the present economic climate increases the necessity for frequent job changes; but we have to ask why the revaluation arrangements omit all pensions deferred before 1st January 1985. Would it not be fairer to backdate changes to the publication of the Occupational Pensions Board report of 1981?
Surely pension funds have been building up substantial, actuarial surpluses. I do not have any evidence but I shall wait to hear that occupational pension funds are very hard up at the present time. As far as we can see—and I think that on Second Reading it is fair to make this point—the intention seems to be towards privatising pension schemes and to moving the earnings-related part of state pensions into private schemes. I think that that is not to the advantage of the majority of our people.
I understand also that the Bill provides that indexation applies only to early leavers after January 1985. Perhaps that could be confirmed. We previously expressed our anxieties about the statutory sick pay policy. This was introduced, as other noble Lords have reminded us, to cover the first eight weeks of sickness. It means that for the first eight weeks of sickness the employer has to pay the worker a sum related to his earnings and then reclaim the payment. The difference
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between that worker receiving statutory sick pay and national insurance sick pay is that national insurance payments take account of family responsibilities, a franked national insurance contributions card, and they are not chargeable to tax. Now, from April 1986, I understand that the period is to be extended to 28 weeks. I agree with the noble Lord, Lord Boyd-Carpenter, when he asks, "Why 28?" I tried to work it out in months. It comes, I think, to seven months. I cannot think what is the particular relevance of seven months. Why not 12 months or six months? I am sure that both the noble Lord, Lord Boyd-Carpenter, and I will be interested to hear the reasoning behind the 28 weeks.
Then of course we are not altogether happy about Clause 17 of the Bill, which reimburses employers for national insurance contributions in respect of workers for whom they are paying statutory sick pay. I understand that this will cost £60 million. This means £60 million taken out of the national insurance fund and paid to the employers. If I am wrong, I shall gladly defer to those who can count better than I can. I should be interested to know what saving the Government expect to bring about by making this change and whether the impetus for all this change, for the extension from eight weeks to 28 weeks, is one of Treasury saving.
On housing benefits, in Clause 20, I share the anxieties that have been expressed by other noble Lords. I have read very carefully the debates in another place and I now understand the anxieties which prompted the insertion of this clause into the Bill. But it does seem to me that because one or two local authorities did not seem to be behaving as the Minister thought that they should, we now have a clause which penalises all local authorities because, as the Association of District Councils has very clearly said, and as the noble Lord, Lord Kilmarnock, has emphasised, it is giving total power to the Secretary of State to decide not to pay subsidy on any amount that he considers unreasonable in a particular case.
We had an undertaking that local authorities, with all the rate capping and all the other problems that they are having to put up with at present, would not be impoverished or penalised financially in any way by the housing benefit arrangements. Now, if we are to get into a situation where a Secretary of State, entirely by himself, can decide that a local authority is behaving unreasonably, apparently he could make a reduction in the subsidy otherwise payable. This seems to me not only to be financially difficult for many local councils—and certainly the Association of District Councils thinks it would be difficult—but to be one more step towards central Government interference in local council decisions.
It seems to me that the Secretary of State is being given more and more power in very many directions and this is just one more case of bringing these decisions to Whitehall. I remember that we used to be derided by the Conservatives because one Labour Minister was heard once to say in an unguarded moment, "The man in Whitehall knows best". Certainly this Government are standing up for that principle in many directions, and in this case for the principle that the man in Whitehall knows best. I very much regret that part of the Bill.

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The noble Baroness also spent some time (and I shall spend just a moment or so) on the question of contribution changes creating new jobs. This I cannot understand. Nobody has ever proved to me that changes in national insurance contributions create jobs, especially when one considers the point that the noble Lord, Lord Marsh, tried to make: that it might result in top-paid people losing their jobs because their national insurance contribution had gone up. When looking at the salary of what I would call a top person—perhaps the chairman of ICI or somebody like that—I would describe his national insurance contributions as peanuts. If a man is worth employing because of his skill and ability, I should be very surprised if any firm were to say, "Sorry, but you must go because your national insurance contribution that we have to pay has gone up". At the lower end of the scale I have never seen any convincing proof that there is a connection between national insurance and job opportunities. Certainly, there is a lot of talk about the surcharge being taken off as an incentive to employment; but employment has not improved—or should I say unemployment has not improved—as a result of that. I honestly think that there has been some muddied thought in this connection.
My Lords, we have had a long day, and some of us have to last a bit longer, so I shall not give this Bill the blessing of my noble friends; I shall threaten the Government with a few amendments at Committee stage and hope that we can make some progress after that.
7.31 p.m.
Baroness Trumpington: My Lords, we have had quite an afternoon full of variety and interest, and we have had a very thoughtful and constructive debate on this Bill. I shall do my best to respond to the points that have been made and to reply to the questions that have been asked.
Perhaps I can say first to my noble friend Lord Boyd-Carpenter and to the noble Lord, Lord Kilmarnock, that I think it would be very unwise of me to try to cover any of the points that have come up about the social security reviews and the timing of today's debate and the Green Paper. As I said at the beginning of the debate, there is really nothing to be gained by going over that ground now. The Government's proposals on the Green Paper will be a subject for consultation.
I might just add, in reply to the noble Lord, Lord Stallard, to my noble friend Lord Boyd-Carpenter, and to the noble Baroness, Lady Jeger, who said that the debate appeared in an unreal light, that there is nothing in the Green Paper which invalidates or puts in question the wisdom or usefulness of the proposals in this Bill. The Green Paper builds on the improvements being made in this Bill.
Let me now attempt to answer your Lordships' searching questions. If I omit to reply to any noble Lord, of course I shall write to him if he lets me know that I have erred in this way.
The noble Lord, Lord Stallard, first asked: why extend the SSP to 28 weeks now when this was resisted when the Bill was introduced? My answer is: because
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SSP was a completely new concept for employers. It was considered advisable to restrict their involvement to the shortest spells of sickness first and then to look at the position again after the scheme had been running for some time. This was a sensible approach to take, and has led to the Government making the change now rather than at the outset.
The next question that the noble Lord asked me was: why are occupational pensions changes urgent? We have brought forward the changes in two main areas on occupational pensions, both of which, we think, are needed urgently. When the noble Lord, Lord Stallard, has been able to study the proposals in our Green Paper he will see that we shall build on the success of the occupational pensions schemes to provide decent levels of income in retirement. It is clear from the many representations that we have had that this action is needed as soon as possible to help early leavers. I can see no reason for delaying taking that action. I am sure that many early leavers in the country would agree with me. We should remember here that up to 90 per cent. of all workers may at some time be early leavers. Similarly, we believe that no matter what the future plans it must be right to give people basic information about their often most important asset, as I said in my speech. There are major improvements that many people will want to see come into effect as soon as possible. We can see no reason at all for delaying.
On the subject of the abolition of the earnings rule raised by the noble Lord, Lord Stallard—and some other noble Lords raised similar points, in which case I hope my replies to the noble Lord, Lord Stallard, will cover the other noble Lords as well—he was talking about the retired pensioners' earnings rule which it is the Government's intention to abolish when resources permit, but the earnings rules here relate to adult dependants. It is surely right that people should only get additional benefit for someone who is really dependent upon them, and that such a test of dependency should be the same for both men and women.
The noble Lord, Lord Stallard, and the noble Lord, Lord Banks, both stated that primary legislation is not needed to restore the 5 per cent. abatement in invalidity benefit. The noble Lords are quite right. The restoration could be done in the up-rating order, but by giving backing in primary legislation the Government were able to give an early earnest of their intention to restore the abatement and so to reassure invalidity beneficiaries.
The noble Lord, Lord Stallard, asked me: why the need for so many new clauses put down at Report stage in the other place? The new clauses on national insurance contributions were introduced at Report stage in order that the measures announced in the Budget could be introduced as quickly as possible. The measures benefit 8½ million people by reducing the cost of employment, and improve the job prospects of young people who are looking for their first job, usually at a wage of less than £90 a week. The cost to the Government of these measures, including those for the self-employed, amounts to £575 million in a full year.
The noble Lord, Lord Stallard, asked me why the Bill does not contain provision for married women to

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receive invalid care allowance. The ICA was introduced in 1976 by a Labour Government. It was intended as an income replacement benefit for men and single women who had given up their main source of livelihood. The cost of extending ICA to married women would be prohibitively expensive—a new extra cost of £85 million.
Again, Lord Stallard asked me why Clause 22 was necessary, and various other Members of your Lordships' House have asked me why pensions for members of certain boards should be provided. This clause will provide occupational pensions for the chairmen of those boards. Successive governments since at least 1978 have agreed that it is unfair for someone to take on the chairmanship of these boards without any prospect of receiving a pension. We have taken the opportunity to put this straight, and I hope the House will agree that it was the right thing to do this in the Bill, it being the most suitable vehicle to meet the commitment.
The noble Lord, Lord Stallard, asked what evidence the Government can produce to show the statutory sick pay scheme was welcomed. Let me take employees first. The Department's own social security policy inspectorate recently carried out an inquiry into employees' attitudes to SSP. Their report has been published and is placed in the Library of your Lordships' House. The general conclusion of the report is that most of the employees interviewed considered that SSP was an improvement on the previous sickness benefit scheme. Indeed, 63 per cent. who could make the comparison considered that SSP was positively better than sickness benefit. I assume the noble Lord has seen this report, but I would be happy to send him a copy if he wishes.
Turning now to employers, there can be no doubt that the vast majority of employers have very success-fully taken the SSP scheme on board. The CBI welcomed its introduction, and there have been few queries. It is true that a minority of organisations were opposed to the principle of SSP, but such organisations are very much in the minority. This is not just the Government's view; I draw noble Lords' attention to the independent survey carried out by Income Data Services Limited.
The extension of SSP leading to increased overheads and costs for employers was the next point raised. I agree that the extension of SSP liability will cause some extra work for employers, but now that SSP has become a routine part of employers' payment arrangements, and because of the limited number of extra cases involved, we do not expect the ongoing administrative costs of the extension to be large. We are very conscious of the need to keep procedures as simple and as flexible as possible; but in recognition of the extra work involved in the extension of SSP liability it has been decided that, as well as continuing to allow the recovery of 100 per cent. of the SSP paid out, employers will also be relieved of their share of the national insurance contributions paid on all SSP. This will mean to employers the saving of up to £60 million a year. That is a significant concession, and it will operate retrospectively from the 6th April 1985—a full year before the extension comes into operation.
The noble Lord, Lord Stallard, in his wide-ranging speech, also mentioned the error rates of SSP. The
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noble Lord referred to mistakes. I must emphasise that the mistakes which have been made have generally been of a minor nature, and they should reduce as employers become more familiar with the operation of SSP.
The noble Lords, Lord Stallard and Lord Banks, and my noble friend Lady Faithfull commented on the rates of SSP having an adverse effect on families and the lower paid. They referred to the rate of SSP and, in particular, related this to a family man The noble Lord, Lord Stallard, quoted a man earning £60 a week. Such an employee would be entitled to SSP of £37·20 a week, and not £32·60 a week, as I believe both noble Lords said. This compares with a state sickness benefit rate of £27·25 sickness benefit for single people and for married men with no entitlement to an increase for their wives. Nearly 80 per cent. of claims for sickness benefit do not include an increase for a wife. SSP is therefore significantly better for these people. The married person's rate of sickness benefit, as the noble Lord said, is £44·05. It is true, therefore, that the SSP rate is lower in these circumstances, but of course the claimant would be able to claim supplementary benefit if appropriate. A claimant may also be entitled to help with his housing costs. Also, it should be borne in mind that many employees will receive occupational sick pay from their employers over and above SSP when they are sick.
Finally, the noble Lord, Lord Stallard, compared SSP rates and sickness benefit rates for persons with children. I should make it clear that there is no difference in this respect, as increases for children are not paid either with sickness benefit or SSP.
The noble Lord, Lord Banks, together with the noble Lord, Lord Stallard, referred to the rates of SSP for the lower paid. As I have said, I think they got their figures wrong, and I hope I have corrected that. The noble Lord, Lord Stallard, asked: why restore 5 per cent. abatement on invalidity pension when benefit is not taxed? I have to tell him that it remains the Government's intention to bring invalidity benefit into tax as soon as this becomes operationally possible. Successive Governments have agreed that such benefits should be taxed, as are other income replacement benefits such as retirement pension. No date has yet been fixed for taxation but I would have thought the noble Lord would have been pleased that the Government have found it possible to restore the abatement before then.
As we know, the noble Lord, Lord Banks, is a very great expert on the subject of social security, and is to be treated with great caution by those who reply to his questions. He asked about PAC comments on error rates. The comment is that one in three cases that have been checked showed some error. I have already touched on this in replying to the noble Lord, Lord Stallard, but I should make it clear that since September 1984 the DHSS have been concentrating their checks on those employers who are thought to be most at risk. These are employers which the DHSS inspector noted as having made a mistake during the first phase of the visits made between April 1983 and August 1984 and new employers who may not have had any experience of operating SSP. It is true that these have shown an error rate of just over 30 per cent.—17 per cent. overpayments and 14 per cent.

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underpayments. That is high, but, as I have said, the level should reduce as employers become more familiar with the operation of SSP. Mistakes have generally been of a minor nature, and the situation is being very closely monitored.
Now we come to the big question which was touched upon by the noble Lord, Lord Marsh, when he intervened during my opening remarks. It was also referred to by the noble Lord, Lord Banks, and my noble friends Lord Boyd-Carpenter and Lord Mottistone: that is, the point about the Government considering the financial effect on firms of abolishing the upper earnings limit. Some cases erred to the extent of £2·3 million a year extra. As a result of abolishing the upper earnings limit on employers' contributions, I accept there will be increases in the cost of employing the highest paid workers. Quite simply, this was necessary to finance the reduced contributions for the lower paid, but it has also removed what has always been an unwarranted distortion in employer contributions in favour of the higher paid.
Employers' contributions do not confer benefit rights, and therefore there is not the same technical constraint on removing the upper earnings limit that exists for employees' contributions. By getting rid of this distortion we will have a more sensible and progressive structure of contributions. Employers' costs will be reduced in respect of over 8,500,000 lower paid workers. Against this, abolition of the upper earning level means increased costs on behalf of only 1·7 million higher paid workers. By focusing the benefit of these changes at the lower end of the wage-scale we will secure the maximum impact on total employment, and overall the burden of national insurance contributions will still be reduced by £80 million.
It must be remembered, too, that the Government have already substantially reduced employers' costs by abolishing the national insurance surcharge, which was introduced by the last Labour Government, by bringing down employer contributions from 13·5 per cent in 1979 to 10·45 per cent. at the highest level now. In the majority of cases where there are extra employer contributions they will at worst amount to only about 2 or 3 per cent. of gross salary. The evidence we have suggests that earnings for the employees concerned have been rising at the rate of some 2 or 3 per cent. a year in real terms for several years, suggesting that costs of that order can be absorbed without too much difficulty. Many of the employers concerned are in firms which stand to gain in some cases overall from the reduction in contributions for the lower paid, or in firms where the extra contributions represent only a small fraction of the total profits. I imagine we shall come back to this on another day if your Lordships are not satisfied with my explanation.
The noble Lord, Lord Banks, referred to early leavers. I am very pleased that our proposals for early leavers find support from such an acknowledged expert in the field. The noble Lord also raised several detailed questions, but of course we shall have the chance to go into greater detail at a later stage of the Bill. We realise that our early leaver revaluation
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proposals will involve extra costs, but clearly we could not allow the unfair treatment for early leavers to continue.
There is, of course, one other way of financing these improvements which the noble Lord did not mention. That is by meeting them from the investment yields that have been obtainable over the last few years. Cost will, of course, vary from scheme to scheme. It is difficult to be precise about costs, but providing the early leaver protection that we propose will add between 1 and 2 per cent. to the payroll for all benefit rights that accrue from 1st January, 1985. In other words, schemes will have to find funds for these increases immediately. As for schemes with fixed premiums, I believe the noble Lord was talking primarily about money purchase schemes. If that is not the case, then if the noble Lord will let me know, I will write to him. But money purchase schemes will not be subject to 5 per cent. revaluation. They will need only to give the same treatment to leavers and stayers subject to a deduction for reasonable administration costs for leavers. We hope within the next few weeks to publish our proposals for calculating transfer values. We shall consult fully on these and I hope the noble Lord will bear with me and await these proposals.
The noble Lord, Lord Banks, spoke about SSP saving £200 million and said that we will save £200 million on sickness benefit, but SSP paid out by employers will total £285 million for which they will be fully reimbursed. There is no question of saving £200 million on the low paid. This figure simply refers to the reduction in public expenditure.
The noble Lord, Lord Banks, asked whether there is protection if the employer fails to pay SSP. There is an existing procedure that an employee can use if he has not been paid SSP or thinks the amount paid is wrong and he cannot sort out the matter with his employer. The employee can ask the DHSS for an adjudication officers's decision on his SSP entitlement. A copy of the officer's decision goes to the employee and to the employer and either can appeal against it in the usual way. This procedure will continue. It is explained to employees in the leaflet Check your Right to Statutory Sick Pay, MI244, and to the employer in the Employers Guide to SSP, MI227.
The noble Lord, Lord Banks, advocated integration of income tax and national insurance contributions. As mentioned in my right honourable friend's Green Paper, there are significant differences between PAYE and national insurance contributions. Contributions are calculated on weekly or monthly earnings; income tax on annual income including unearned income and pensions. There are allowances against income for tax purposes but not for contributions. Complete alignment would be operationally very difficult indeed, but some differences may be more easily removable to the benefit of employers. This subject will receive further consideration in the forthcoming Green Paper by my right honourable friend the Chancellor in the consultation period.
The noble Lord, Lord Banks, referred to the replacement of one poverty trap or cliff edge at the lower earnings limit at each of the boundaries between the new reduced national insurance contribution rates. It is true that there will still be a cliff edge, when an

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increase in pay causes an increased liability for national insurance contributions, but the cliff edge effects will be smaller than presently seen at the lower earnings limit, both in absolute terms and relative to each other. We will need to look more closely in Committee at the noble Lord's particular proposals for the kind of earnings above the LEL which is exempt from contributions.
My noble friend Lord Boyd-Carpenter, whose expertise is so daunting that I feel positively impertinent to interrupt him during his remarks, asked about early leavers and other burdens on occupational pension schemes. He emphasised that the occupational pension schemes were set up voluntarily and that imposing too heavy a burden on them could result in many winding up. This is all a matter of judgment and of balance. It is no good encouraging schemes if they do not provide reasonable benefits and information to all members. Our judgment is that we have struck a fair balance between the needs of early leavers and the ability of employers to fund benefits.
We must not forget that our economic well-being depends upon a mobile workforce. We are determined to remove all artificial barriers to job mobility. Here the noble Baroness, Lady Jeger, might listen when I refer to job mobility, because she said that these measures were not helping to reduce unemployment. There can be no doubt that occupational pension schemes can at present make such a barrier because of the treament of early leavers. We cannot allow that to continue.
So far as the difference between leavers and stayers is concerned, I have to say that we believe in schemes being free to make improvements without legislation wherever possible. Experience shows that voluntary increases for stayers are already common, but there is no incentive for schemes to look after early leavers and so we are legislating in the area where we believe a firm Government lead is necessary.
My noble friend Lord Boyd-Carpenter spoke of the demise of the contributory principle, because of the abolition of the upper earnings limit for employers' national insurance contributions. My noble friend's obituary for the contributory principle was premature; reports of its death have been exaggerated. There continues to be a link between contributions paid in and benefits received, but a commitment to the contributory principle does not entail a particular structure of contributions carved in stone. Adjustment to the employers' contribution in respect of the higher paid has made possible valuable changes to benefit the lower paid and their employers.
My noble friend said there was no obligation on employers to provide occupational pension schemes. He asked: what will the Government do to ensure that employers are encouraged to provide schemes? I agree with my noble friend that there is currently no obligation on employers to provide occupational pension schemes, but I am sure he would agree that this is not preventing, and should not have prevented, successive governments from ensuring fair treatment.
This Bill makes a number of important improvements to the way such schemes will operate. But we also acknowledge the importance of encouraging the spread of schemes. Indeed, we go
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further, because we should like everyone to have his own pension, either a personal pension or an occupational pension, on top of the basic state pension. The proposal that I outlined earlier today in a Statement seeks to build on this and achieve that under coverage of schemes. The House will have an opportunity to debate these wider proposals in detail.
My noble friend Lord Boyd-Carpenter and the noble Baroness, Lady Jeger, asked why the period of 28 weeks was chosen for the extension of SSP. Twenty-eight weeks was chosen because that is the period covered by the state scheme of sickness benefit, which is designed generally to cover short-term sickness. After 28 weeks of sickness state invalidity benefit, which is a long-term benefit, comes into payment instead. This means people will go straight from SSP to invalidity benefit with no intervening payment of sickness benefit. In the example given by my noble friend Lord Boyd-Carpenter the employer would no longer be required to pay SSP once the employee had claimed retirement pension.
My noble friend Lady Faithfull and the noble Lord, Lord Kilmarnock, wished to know about the housing benefit scheme. The Bill will not alter the existing arrangements whereby the Secretary of State will pay benefit subsidy on the basis of rebates and allowances granted by authorities under the housing benefit scheme. We shall continue to list the items which will always be excluded from benefit subsidy, such as rent-free weeks awarded to tenants in the subsidy order, so that authorities know where they stand. We have, in fact, taken the opportunity to enable the subsidy order to be drafted in a much more straightforward way, so far as these exclusions are concerned, than at present.
Although the new power to make an order will have exactly the same effect as the existing power, it should mean that the subsidy order will be more comprehendsible. However, the amendment will also give the Secretary of State a new power to exclude items which it is clearly not reasonable to meet out of money voted by Parliament for the housing benefit scheme, This power will not be used lightly but it will be used to prevent blatant attempts at exploitation of the subsidy arrangements from succeeding.
My noble friend Lady Faithfull talked about transfers. She was concerned about the financial burden imposed on schemes by the transfer requirement. In fact, the transfer value will reflect the benefit rights held in the scheme, so it will not impose any additional burden upon schemes. My noble friend also asked whether all invalidity pensioners will get the full advantage of the restoration of the 5 per cent. abatement, in view of the other changes in the Bill. I think that she is referring to Clause 9 which deals with the overlap of invalidity allowance and additional component.
It is true that where the amount of the overlap between invalidity allowance and additional component is equal to or higher than the amount of the 5 per cent. increase, a pensioner will not gain from the restoration. But I should make it clear that many beneficiaries will be unaffected, because they currently do not get both additions to invalidity pension, For example, over 50 per cent. of invalidity pensioners do not get the additional component at all, while others who have gone on to invalidity pension only in later

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life are not entitled to any invalidity allowance. It is estimated that about 375,000 beneficiaries, receiving both the invalidity allowance and the additional component, will be affected in November 1985 and for many of these the overlap will be small. I should also emphasise that the transitional provisions will ensure that no one's existing benefit is reduced.
My noble friend Lord Mottistone and the noble Lord, Lord Kilmarnock, expressed totally different reactions to the register of pension schemes, so I would repeat to them both that I emphasise we are open-minded about the pension scheme register. But I must also emphasise our determination to make the proposals for disclosure of reasonable information to scheme members work. My noble friend Lord Mottistone criticised the multiple cliff-edge effects created by the graduated structure of reduced national insurance contributions, and I have already answered a similar question from the noble Lord, Lord Banks. My noble friend asked about occupational pensions and the burdens which the legislation will impose for early leavers. On early leavers, we believe that we have the right balance. The Engineering Employers' Federation believes that we have gone too far, but many others believe that we have not gone far enough. That shows that you cannot please everyone at the same time.
The noble Lord, Lord Kilmarnock, asked me about SSP and the financial effects. The figures are very complicated and I think it would be best if I wrote to the noble Lord. In fact, I apologise to other noble Lords and to the noble Baroness, Lady Jeger. Coming last, I am afraid that I have already answered some of the points that she raised. But despite some of your Lordships' criticisms, I really feel that this is a Bill which contains good news for many people, particularly those who are at the lower end of the financial scale. It opens up doors for the young, it helps the very old and it simplifies procedures for those who are ill. These are all positive improvements and I commend the Bill to your Lordships.
Lord Kilmarnock: My Lords, before the noble Baroness sits down, she has given a very full answer for which we are very grateful. But will she write to me about the queries which I put to her on Clauses 9, 12 and 14?
Baroness Trumpington: Yes, my Lords.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Ports (Finance) Bill
8.5 p.m.
Lord Brabazon of Tara: My Lords, I beg to move that this Bill be now read a second time.
This is a short but important Bill which deals with three separate aspects of ports finance. I shall deal with them in turn starting with Clauses 1 and 2 which it may be convenient to consider together.
A major landmark in the history of British ports was the Rochdale committee of inquiry into the major
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ports in 1962, under the distinguished chairmanship of my noble friend Lord Rochdale. It was a long overdue examination of Britain's ports, which resulted in important changes in the structure, development and financing of the industry. But what neither the committee nor the Government of the day could foresee was that shortly afterwards our ports began to embark on a period of transformation unprecedented in history in its scale and rapidity.
The reasons for this are, I believe, well-known. The development of bigger ships which could not use old upriver enclosed docks; the effect on trade patterns of North Sea oil and joining the EC; better inland communications, making it less essential to ship goods to or from the seaport nearest to the manufacturing site; the container revolution, which not only transformed port handling methods but resulted in rationalisation of shipping services, with fewer port calls; and the tremendous growth in roll-on/roll-off traffic, both freight and passenger.
These changes have had their impact on the physical appearance of our ports and on the numbers and skills of the people who work in them. In particular, there has been a drastic reduction in labour. At the time of Rochdale, virtually all ports of significance were in the Dock Labour Scheme and between them employed some 70,000 registered dock workers. Today, a quarter or more of our non-oil trade is handled in non-scheme ports, and the number of registered dock workers in the traditional ports is just over 12,000. This enormous reduction has been achieved mainly by voluntary severances. That of course has put a heavy cost on the ports, particularly London and Liverpool which had traditionally had the lion's share of the labour intensive break-bulk cargo and were therefore especially hard-hit by the switch to containers.
The Government therefore decided to assist the industry in two ways. We recognised the exceptional problems that London and Liverpool faced in rationalising their facilities and organisation. To help them reduce manpower and continue in business while this reduction was being completed, we promoted the Ports (Financial Assistance) Act 1981, which empowered us to make available to the two ports up to £160 million by way of grants, loans and guarantees. That figure was subsequently raised to £360 million. Much of this money was intended for severance pay for registered dock workers.
Then in 1982 we decided to help the industry as a whole to meet the cost of severing registered dock workers. The employers of registered dock workers—port authorities and some private port employers—operate a national voluntary severance scheme, administered by the National Dock Labour Board. The NDLB makes severance payments from a fund that it administers for the employers and which is paid for ultimately by a levy on the employers, although it has been substantially helped by Government loans. In 1982, we agreed to a three-year moratorium on the servicing of those outstanding loans, provided that the employers paid to the NDLB a levy of £12 million annually to meet the cost of new severances.
It had been our, and everyone's, hope that these two measures—the special aid to London and Liverpool

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and the moratorium on servicing the debt in the national voluntary severance scheme—would have been sufficient. But I am afraid it has not. In three years, the number of registered dock workers has fallen by a further one-third (about 6,000) more than had been expected. The Port of London Authority and the Mersey Docks and Harbour Company are still not fully back on their own feet and the £360 million aid which Parliament agreed for them has been fully committed.
It is against this background of continuing and expensive rundown in manpower that we have brought forward Clauses 1 and 2. To take first Clause 1, it proposes an entirely new power to pay grants of up to £10 million to the National Dock Labour Board as a contribution towards the cost of severing registered dock workers. The clause includes provision for that amount to be increased in future years by order up to a maximum of £40 million, subject to affirmative resolution in another place.
The reason for this new power is that we are clear that the employers in the Dock Labour Scheme ports cannot both service and repay the outstanding debt in the national voluntary severance scheme and meet the full cost of future severance needs. Just how we propose to use this power I cannot at present say. The Secretaries of State for Employment and Transport are engaged in discussions with the National Association of Port Employers on appropriate arrangements for the future financing of RDW severances. There has been a succession of stop-gap measures. It is unsatisfactory to continue in that way. We are searching for a basis that will bring a greater measure of stability and equity into the arrangements. But in taking this new power we have recognised the likelihood that some special Government assistance will be necessary.
Clause 2 raises from £360 million to £500 million the ceiling on the amount of financial assistance that the Government may give to the PLA and the MDHC. That money is available, in the terms of the 1981 Act which the clause amends, for measures to reduce the manpower in their ports with a view to restoring their profitability and for carrying on their undertakings while such measures are being taken. As I have already mentioned, the existing £360 million has either been spent or is committed. Both the PLA and the MDHC have carried through massive, indeed traumatic, changes in the past few years, rationalising and concentrating their activities downriver and building up their containerised and bulk cargo traffics as their traditional break-bulk activities continue to decline. Despite the Government assistance that they have received, however, neither is yet in a position to carry on entirely unaided. So we are seeking power to continue that aid until the job is done and both ports are restored to health and independence. We shall commit only such extra money as is absolutely necessary. We hope it will be far short of the extra £140 million for which Clause 2 provides, but we have thought it only prudent to allow for various contingencies over the next few years. Not to increase the £360 million ceiling would jeopardise the restoration of the PLA and MDHC to viability and risk nullifying the heavy investment of public money that has been made in both ports.
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I turn now to the second part of the Bill. Clauses 3 to 5 are useful reforming provisions to remove a range of unnecessary ministerial controls, mostly relating to borrowing by trust ports. These controls have grown up in a rather haphazard fashion in trust ports' local legislation going back over many decades. They take no regular pattern as between one port and another. The Government have concluded that they are no longer necessary.
The British Ports Association and those ports which are affected have welcomed the reforms. In practice, the powers of many ports are already framed so that they can borrow all they need within the basic limit specified in their local enactments without needing the Minister's consent to borrow under certain circumstances or sometimes indeed at all. The reform will put all trust ports on a similar footing, as well as removing a number of other obscure provisions relating to minor matters, such as rates of interest, loan repayment periods and so on which currently require a Minister's consent.
Placing responsibility for all these matters fully and universally on the ports themselves reflects the Government's general policy that the industry should manage its own affairs. It also follows naturally from the Government's decision, confirmed in the last public expenditure White Paper, to transfer trust ports' capital investment expenditure to the private sector from 1st April 1985. This decision, in turn, reflects the fact that most ports, including the trust ports, now obtain capital for new projects from the private sector.
I turn finally to the third part of the Bill. Clause 6 repeals Section 9 of the Harbours Act 1964 and directly consequential legislation. Under Section 9, and the control of harbour development orders that were made under it, no scheme of harbour development costing more than £3 million could go ahead without the approval of the Secretary of State for Transport. This was part of the philosophy on ports that stemmed from the Rochdale Committee's report that I mentioned earlier.
In April 1984 my right honourable friend the Secretary of State announced his intention to revoke that control as being no longer appropriate in a commercial and competitive industry. Immediate effect was given to that decision in the Control of Harbour Development (Revocation) Order 1984 made in May of last year. That order was fully debated in another place on 19th June last year. Clause 6 of this Bill completes the process by repealing the relevant primary legislation.
Repealing Section 9 is an integral element of our view that in a competitive industry the Government should not attempt to lay down where port development should and should not take place. It should be left to the ports themselves and those who use them to decide where new facilities are needed. Initiative should be rewarded, not stifled. If ports can provide the capital themselves or find commercial sponsors willing to put it up, there is no reason why they should not be free to take the risk and back their judgment. That way lies the greatest efficiency and the best prospects for our industry, our trade, and for jobs. I commend this Bill to your Lordships' House.
Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)
8.15 p.m.
Lord Carmichael of Kelvingrove: My Lords this is a Bill on which we shall not wish to divide the House. The Bill is helpful in the first part at least as it gives us an opportunity to examine the position of our ports and the Government's policy—more the present Secretary of State's policy—towards the ports. Perhaps we can ask for some guidance on the future policy of the Government in an area which everyone agrees is of major concern to any trading nation; but to a nation such as our own, an island nation, it is absolutely vital because of the importance of trade and ports combined.
It appears to me that while we undoubtedly have an over-capacity of port facilities the Government are still happy—in fact they are anxious—to encourage yet more facilities, provided they are privately owned and privately financed. The abolition of the registered dock worker is one of the ways the Government see as being necessary to—as I am sure the Secretary of State will say—free the ports industry. As long as one had registered dockers and a demand for work at certain ports it was more difficult to privatise or expand the private ports.
In another place when the Bill was going through, the reason for the problems of the registered dock labour force was discussed fairly forcefully. One Member with great experience of the docks gave some descriptions of the casual system that pertained in the docks before the Dock Labour Scheme. I myself saw it frequently on the Clyde in Glasgow, particularly over at Govan where the men met every morning and gang bosses threw "checks" into the air for them to grab. If they were lucky enough they got a job; if they were not lucky enough they did not. There were always favourites who fairly regularly got jobs, but many went twice a day to try to get a job but could not get one because they were not favourites or were not lucky enough to catch one of the checks that were thrown in the air.
This memory takes a long time to die in a dockland area and a tight community. It is a nightmare of many dockland areas. This is why people are very anxious that there should be control and understanding and a regular system in dock work. This is one of the reasons why there is always a worry about non-scheme ports. It is a lovely way to run a dock system. You totally ignore the wishes of the people and the lives of the people. If trade is good even on a day-to-day basis you blow a whistle and you get more workers in to help unload the ship. If trade is bad you do not send for anyone. That is a very economic system in the short term but of course it causes all sorts of problems in dock areas. Many of those problems are still with us because of the attitude of the old shipowners and the stevedore companies.
Obviously we welcome the fact that those who are no longer going to be employed will be given reasonable redundancy payments. We regret, however, that the two once great ports which we are particularly dealing with in the Bill—one in London and the other in Liverpool—have fallen into such a state that the London registered dock labour force has fallen to a figure of 4,000 from a total of 25,000 only 20 years ago. In Liverpool over a longer period the
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registered dock labour force has fallen from 15,000 to 2,000.
I congratulate the noble Lord the Minister on his introduction of this Bill. It was a much more reasonable and gentle explanation than that given by his right honourable friend the Secretary of State in another place when introducing the same Bill. I accept of course the arguments which the Minister put: that there are new methods of working ships and of working cargo which require fewer people. But it is doubted by a great many people in different areas of shipping—and I have spoken to many people in shipping over the years—whether there are sufficient skilled people within the dock industry to allow for potential growth in traffic at both London and Liverpool if the economic situation should improve—which we all hope it will.
What concerns me and a growing number of electors is the general simplistic view which the Government seem to take towards competition. The Minister himself—unusually for him—began to explore this avenue towards the end of his speech. For example, it was said in another place—and the Minister himself suggested this without naming the places—that although the expansion of Felixstowe may be financed privately, the infrastructure will soon be found to be inadequate and a cry will go up for more roads, better access and other action which will be a charge on the public purse. This is undoubtedly the case with the motorway programme. One of the priorities for the motorway programme was that the ports had to be served. The ports concerned were London, Liverpool, Hull, and Greenock in Scotland. Those were the places which the motorways had to serve; this was because the ports were there and they were a lifeline. If we kill off Liverpool and, to some extent, London, we shall soon find that we need to have a better infrastructure serving Felixstowe and—if we ever get the private money and the go-ahead—into Falmouth. It will be a massive job constructing a road system to serve those places.
I am trying to say that, taken as a whole, Great Britain Limited (or perhaps it should be Great Britain plc) cannot solve its problems by isolated, one-off bouts of competitiveness. An apparently simple solution in one area of industry can have repercussions in other areas which any Government will be forced to deal with—often at a greater cost than the benefits given by the first apparent solution.
I should like to give as an example the river that I know best; that is, the Clyde. This Bill does not deal specifically with that river except that the repercussions of the repeal of Section 9 would obviously affect the Clyde, which is one of the great ports of the world and the greatest shipbuilding river of the world. I have had meetings with colleagues, with the Scottish Chamber of Commerce, with the Scottish CBI, with trade unions and with local authorities—and I can assure the Minister that across the whole spectrum of Scottish industrial life there is great concern about what is happening to the ports of Clyde and Leith—and, to some extent, the port of Grangemouth. This is not the occasion, but perhaps we will have an opportunity some time to discuss the effects of the grid system and how it affects Scotland and some of the northern ports. It is certainly something that is causing great concern and considerable trouble.

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One of the most disturbing aspects concerns the Clyde, which used to have something like 23 shipyards. I accept the fact that one can only bring a 27,000-tonne vessel up the Clyde and that no one will be going around the world with a 27,000-tonne vessel. Therefore it does have limitations. The Clyde as a whole is a good example of the fact that one can solve certain problems in order to make economies but one can then bring down the whole house of cards.
In the Scottish industrial press, the example is given of the problems concerning Ravenscraig steel plant. This is dependent upon supplies of iron ore and coal from Hunterston ore terminal. If Ravenscraig were taken away for some reason or another, it would affect the very large granary which is right opposite my house and which has a capacity of something like 100,000 tonnes. I believe it was suggested by the Member for Shettleston in another place that the possibility is that this granary might be used as a store for EC surplus grain. But if anything went wrong and that granary were to go, there would then be little need for the river to be dredged, which costs the Clyde Port Authority about £1½ million a year.
If the river were not dredged, there would be a saving. But if the river were not dredged, then one would find that Govan Shipbuilders, who are beginning to do rather well and become competitive, and also the Yarrow warship yard, would need to take on the job of dredging. Obviously they would need to have the river dredged or else they would go out of business. If they had to dredge the river, then the cost to those two yards together would be something in the region of £1½million per year.
I appreciate that all that is being rather parochial, but the point I am trying to make applies, I am sure, to the whole ports policy of the Government, if only I knew more about some of the other ports. I know a little about the Clyde but would not say that I am by any means an expert. Still, I know enough to say that there is fear felt not only by people like myself but also by people in Scottish shipping and industry generally. The Government's philosophy seems to be that one should make savings on individual items without considering the problems as a whole. We are all praying that the Government will ultimately change their mind and get away from the narrow accounting view which they seem to take on topics such as this. I only hope that there will be a sea change—if that is the right phrase to use in context such as this—for the sake of the future of Britain's ports.
A little planning must be accepted as a necessity in an industry as important as that with which this small Bill deals. When we reach the Committee stage, I hope that the Minister will give thought to some of the points I have made and to some of the points which his right honourable friend the Secretary of State did not deal with in Committee in another place.
8.28 p.m.
Lord Brabazon of Tara: My Lords, I shall try to answer some of the points which the noble Lord, Lord Carmichael, has raised. First, this Bill is certainly not trying to return to the bad old days of registered dock workers. It is a question of a changing world. I believe that the noble Lord recognises that that is so. One
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cannot make ships go up the Clyde, especially if they are too big to do so.
The pattern of trade has changed completely. Shipping now goes along the south coast, up the east coast, and off to Rotterdam. It might drop off a few containers on the way and pick up a few others on the way back. That is not part of a simplistic view which the Government hold in respect of their ports policy. The fact is that if we want, as Great Britain plc, to compete, then we have to provide facilities to which the ships will go. We must not hinder our exporters by adding to their costs by making ships go somewhere else.
I think that is all I can say on this Bill. It is an expensive Bill. We are providing a lot of extra money. As to the repeal of Section 9, in Clause 6 of the Bill, which the noble Lord mentioned, I can perhaps dispel any misapprehension that there may be in respect of the Secretary of State's control of major port investments under the Harbours Act. The repeal will not mean the abandonment of any planning control over port developments. It will not be possible for anyone who wishes to build and run a port to do so where he chooses. He will still have to obtain statutory powers by a Private Bill to carry out works in tidal waters. He may still need development planning permission for landside activities. He will still need the Secretary of State's consent under the Coast Protection Act to any work that he may carry on at or adjacent to the coastline. So other interests are still being adequately protected and there are still adequate opportunities for the local authority, the Government and Parliament to consider new proposals.
I hope I have managed if not to satisfy the noble Lord, at least to answer some of his questions. This is a short, simple and essential Bill and I ask y our Lordships to approve it.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Prohibition of Female Circumcision Bill
8.32 p.m.
Baroness Masham of Ilton: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Masham of Eton.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD RENTON in the Chair.]
Clause 1 agreed to.
Clause 2 [Saving for necessary surgical operations]:
The Deputy Chairman of Committees (Lord Renton): I have to point out that if either the first or the second amendment is agreed to, I shall not be able to call the third or the fourth amendments.
Lord Kennet Lord Kennet moved Amendment No. 1:
Page 2, line 3, leave out paragraph (a) and insert—

("(a) is necessary for the physical health of the person on whom it is performed; or

(aa) is a minor cosmetic operation and is performed by a registered medical practitioner, or").

The noble Lord said: This Bill has been so often before us that I shall be very brief in introducing this amendment. There is only one substantial point which still troubles the House, and that is the matter of "custom and ritual". The Government have put the words in the Bill as a roundabout way of ensuring that the Royal College of Gynaecologists has the freedom that it needs to carry on practising in its traditional manner. This is in the Bill and most of the amendments now before us have the effect of taking it out of the Bill.
It is a narrow, departmental point; it is a DHSS point. The Bill as drafted by the Government undoubtedly prohibits what we all want to prohibit, but it does so in a way which I believe may cause the Bill to fail of its purpose. If the words stand I believe it will cause the people concerned to gather round to protect the custom and ritual which is attacked by the wording in the Bill. I believe that when the day comes and the first person is accused in court of an offence under the Bill and when the press takes note of it, as it will, the people concerned may feel even more wounded and afraid than they do now by the existence of these words. It would, therefore, be wise, if we can possibly find a way to do so, to get rid of the words at this stage.
I hope that the noble Baroness, Lady Trumpington, can give us some news about this, although I do not expect that she will be able to do so. Unfortunately the Government show all the signs of having dug in. Over the past months—nearly a year—the Government have refused to attend meetings for consultations with interested parties. They have refused to meet the friends of the earlier Bill for consultations on the details. They have ridden roughshod over the representations of the Commission for Racial Equality, their own statutory advisory body. I must say that I am surprised the Home Office, and Home Office Ministers, have gone along with this form of wording. The old Colonial Office, if we had been in another country, would not have tolerated this approach for a moment. It would have been wiser than to lay down a formula like this. Are we to do worse in this day and age than would have been done by the Colonial Office before the Second World War?
I read out at Second Reading the protests from the organisations of black women in London who will be concerned by this Bill. I read out the protests by the Commission for Racial Equality. Have the Government, since Second Reading, been able to find time to see representatives of the communities who will be hurt by this wording? Has the sponsor of the Bill been able to find time to see representatives of those communities? If not, I do not believe that the Committee should let this wording go through.
Five of the seven amendments before the Committee aim to remove this wording. With the leave of the Committee, I shall say something about all of these amendments because three of them are alternative ways of making it possible. For myself I recommend to the Committee, and will happily agree
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to, any of those three which would have the effect of making it possible safely to remove the offending words—whichever amendment does that best. The amendments are Amendments Nos. 1, 3 and 4. They all take different routes to enable Amendment No. 5 to be accepted. Amendment No. 5 is the amendment which proposes to leave out the offending subsection.
Amendment No. 3: Page 2, line 3, leave out ("physical or mental").
Amendment No. 4: Page 2, line 3, leave out ("or mental").
Amendment No. 5: Page 2, line 14, leave out subsection (2).
Amendment No. 1, which I commend to the Committee, removes mental health as a reason for doing these operations altogether and leaves only physical health and minor cosmetic operations as permissible reasons. Not so long ago the noble Baroness, Lady Trumpington, answered a Question for Written Answer which touched on this very subject. She said in the Written Answer that the Royal College of Obstetricians and Gynaecologists,
"point out that there are some surgical operations that are necessary for the physical and mental health of women which have nothing whatsoever to do with circumcision performed for traditional or cultural reasons. The college would be opposed to any statutory limitations on these legitimate operations".—[Official Report, 23/5/85; col. 475.]
In a letter which she recently wrote to the Government Chief Whip, which she was courteous enough to circulate to those who had spoken in earlier debates, the noble Baroness said that,
"examples of these operations would include cases in which a woman became anxious and depressed because her external genitalia, although functionally normal, are of unusually large size or unusual in shape. The purpose of surgery in that case would be to change the size or shape to an acceptable appearance which no longer caused the woman distress".
I submit that that is a definition of a cosmetic operation—to change the size or shape to an acceptable appearance. It is for that reason that we propose in the amendment in the name of my noble friend Lady Seear and myself that minor cosmetic operations should be permitted without any reference to health at all, whether physical or mental. Such operations to the external genitalia of women should be permitted just as freely as they are permitted to the external genitalia of men, or, come to that, to noses or chins.
That formula may still ban something that the Royal College wants the freedom to do, and I want at this point to ask a precise question. If the Government hold that it bans something that the Royal College wants to do, what is that thing? Will the noble Baroness please tell the Committee what it is that the formula bans if it bans something that it should not? If, on the other hand, the word "cosmetic" is found to be too vague—and I agree that it is not very precise—I should like a rather precise answer from the Government. "Cosmetic" is vague, we agree. Are not "health", "custom" and "ritual" equally vague, and is not the word "required" equally vague? Many of the words in the Bill are vague and often many words in good law are vague, too. If one word is more vague than others, I agree that we should try to do better, but if it is about equal with the others in vagueness, there can be no objection.
Exactly what case is it that the Government fear would be let through? I have asked already what case they fear would be banned which should not be

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banned. If they hold that there is a loophole, what case is it that would be let through which should not be let through? On Second Reading the noble Baroness informed the House of her strong conviction that certain things would be let through and the wording would not do. It is not enough for the Government simply to inform Parliament of their strong conviction about something. They have to tell us why it will not do. What injustice or cruelty would result from the adoption of those words? We are the deciders here and we must not be stampeded by any outside opinion, even that of a highly qualified Government department.
It may be that in the amendment that my noble friend and I have put down we have inadvertently fallen into confusion, and I should like to raise this at this point. I am not quite sure that I understand the wishes of the Government and the sponsors about what sorts of operation shall be permitted to be performed by persons holding what qualifications. In this matter—and I am sure that I speak for all of us—we should be happy to be guided by the Government. It may be that if something has gone wrong in the wording on that score, we should have an opportunity to put it right at a later stage.
With the leave of the Committee, I now turn briefly to the amendments which are coming up. Amendment No. 2, from the noble Lord, Lord Coleraine, is open to the objection that it does not remove the worrying words. "Custom and ritual" are still there as large as life at the end of the amended text.
Amendment No. 2: Page 2, line 3, leave out paragraph (a) and insert—
("(a) is performed by a registered medical practitioner, and—

(i) is necessary for the physical health of the person on whom it is performed; or

(ii) in the case of an operation performed on a person over the age of sixteen, is either a minor operation of a cosmetic nature or an operation necessary for the rectification of substantial physical abnormality of that person;

and is not an operation required, whether by the person on whom it is performed or by any other person, as a matter of custom or ritual;").
Amendment No. 3, from the noble Lord, Lord Hatch, appears to me to open a wide loophole in that by leaving the word "health" unqualified it will be quite open for people to plead mental health without any further ado. Amendment No. 4 from the noble Lord, Lord Hatch, seems to me admirable, and if the Government and other noble Lords were able to accept it, I should be quite happy to withdraw my amendment in favour of it. Taken together with Amendment No. 5, it would restore the present Bill to the original shape of the Bill that I twice introduced into the House over the past two years. Amendment No. 5 is the main point of this whole discussion, and is the one to leave out the offending subsection.
Amendment No. 6 seems to me to be another ingenious way to achieve the effect that we desire and has, I believe, much to commend it.
Amendment No. 6: Page 2, line 16, leave out from ("any") to the end of line 18 and insert ("non-medical factors").
Amendment No. 7, in the name of the noble Lord, Lord McNair, I must say I do not fully understand and I await his explanation of the purpose that he desires to achieve by it.
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Amendment No. 7: Page 2, line 18, leave out from ("required") to end of line and insert ("for traditional or cultural reasons").
Perhaps I may take the opportunity to make one more general point. I believe that, although there is no amendment down today providing for the possible delay in coming into force of the Bill, there will have to be one on Report. Unless the Government are able to say here and now that they have already voted the money and the help to those voluntary organisations already working in the field in educating the women and men concerned in the effect of the Bill and the merits and demerits of the practice, it would be quite wrong for the Bill to come into effect before a great deal of education had been carried out. That can be ensured by an amendment at a later stage, though I regret to say that on Second Reading the noble Baroness, Lady Trumpington, set her face against it. I beg to move Amendment No. 1.
8.45 p.m.
Lord Hatch of Lusby: It may be for the convenience of the Committee, and I hope it will be of some assistance to the noble Baroness who is to reply and who I know has had a long day, if I follow the example of the noble Lord, Lord Kennet, and add my remarks about the various amendments in his name, my name and our joint names. I make it plain that there is no intention in any of the amendments to allow female circumcision to continue by a side door. On Second Reading there seemed to be some impression that that was the intention of those of us who objected to Clause 2(2). That has never been the case. Those of us who have been trying to remove that subsection are just as fervent in our desire to abolish female circumcision in this country as are those who sponsored the Bill. That is surely self-evident, as it was the noble Lord. Lord Kennet, who twice took the initiative to introduce a Bill to abolish female circumcision.
Once the phrase "custom or ritual" was introduced into the Bill it brought in another dimension. As I say, the removal of that phrase was never intended, and is not intended in any way, to allow the continuation of female circumcision. But once mental health was associated with the phrase "custom or ritual" a new situation occurred, and side by side in the Bill were, on the one hand, operations of what might be called a cosmetic nature and, on the other, female circumcision for the purposes of custom or ritual. I believe that that is a fatal flaw in the Bill, particularly when it is seen by the public outside. For that reason I have tabled a number of alternative amendments which I hope will assist the Committee and the Government to find another means, if they so wish, to preserve the cosmetic form of operation, which I believe the Association of Obstetricians is anxious to preserve, without at the same time including the phrase which has been defined as racist.
Indeed, the Committee will remember that during the Second Reading debate, the noble Lady, Lady Kinloss, pointed out that the nurses were opposed to mental health being a reason for the operation. They believed that if there is mental stress, it should be dealt with by counselling and psychiatry rather than by surgery, in complete opposition to what the noble Baroness had to say on that occasion. I would stress again, both to the Government and to the noble

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Baroness, Lady Masham, who has played such a wide and deep part in all our deliberations, the danger of destroying the salutary effects of the Bill by the introduction of unnecessary racialist overtones.
On Second Reading, the noble Baroness, Lady Trumpington, assured the House that the Government were of the opinion that there was nothing racialist in the phrase "custom and ritual". But this House has stated and has voted that this phrase is racialist and obnoxious, and has rejected it. Moreover, the Government's own statutory body, the CRE, has also stated that this phrase is racialist and that therefore the Bill is racialist. The assertion, publicly made by the CRE, was never answered by the noble Baroness in her winding up speech on Second Reading. Moreover, as the noble Lord, Lord Kennet, has pointed out, the London Black Women's Health Action Project has equally stated that if this Bill is passed in its present form it will be considered racialist. As the noble Lord, Lord Kennet, has pointed out, this is bound to consolidate opposition to the Bill among those communities in which female circumcision is a tradition, and a cultural tradition, and may very well, as we have been warned, drive the operation underground into the back streets in the same way that abortions used to be performed.
I would ask the noble Baroness, Lady Trumpington, whether she is again going to risk, or whether the Government are going to risk, a Bill from this Parliament being tested before the European Court of Human Rights. We have seen only this week a judgment against the Government's immigration policy. Will this Bill now have to be defended? Are we again, as a country, to be dragged in front of the European Court because of the inclusion of a totally unnecessary but highly discriminatory phrase?
Finally, may I say to the noble Baroness, Lady Trumpington, that when she got rather angry with me on Second Reading, all that I was pointing out to her was that when this very clause was debated and voted on in this House the votes that the Government collected were votes from people who had not taken part in the debate and who had never heard the debate. Is that the Government's conception of a free vote? When a free vote is held on capital punishment, members of the Government vote on different sides. I would ask the noble Baroness this question. Is the noble Baroness, Lady Cox, who I believe voted against this clause during the passage of the Bill introduced by the noble Lord, Lord Kennet, to be allowed to vote as her conscience dictated then? Will she be allowed to vote, if a Division is held, against what is now being put forward as a Government case? Why a Government case? Is this not a free vote which all of us should be able to cast according to our consciences and according to our assessment of the situation?
I have one last word for the noble Baroness, Lady Masham. The noble Baroness knows that I value very highly the enthusiasm with which she has sponsored this Bill and the part that she played in the two Bills introduced by the noble Lord, Lord Kennet. I was a little sad that in her winding up speech on Second Reading she seemed to indicate that it was the men, the males, in this House who were concerned about the racial discriminatory feature of the Bill. There was
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also a suggestion during that debate that this is a new issue. No, it is not. It is now some 40 years since I argued personally with Jomo Kenyatta about this issue on the basis of his book Facing Mount Kenya; it is well over 30 years since I participated in a discussion with a team from the World Health Organisation set up to examine the very question of female circumcision; and it is over 20 years ago that I myself was deported from one African country for writing about female circumcision.
I may say that the male Members of your Lordships' House have as much fervour to outlaw this barbarous practice in this country as have the females. Indeed, I would go further. I imagine that I am the only Member of your Lordships' House who has actually seen this operation take place. It used to take place 50 yards below my garden at a university in West Africa. I saw it and heard it. I heard the screams every year. I was deported from that West African country for writing about female circumcision. Three years before that, I had been declared a prohibited immigrant of South Africa on the grounds that I was advocating abolition of racial discrimination. I consider that both those issues are equally important.
When it comes to this Bill, I am just as anxious that racial discrimination shall not have any place in it as I am that female circumcision should be outlawed from this country. I beg the noble Baroness, Lady Masham, and the noble Baroness, Lady Trumpington, not to ruin what all of us want to see done in this Bill: that is, to abolish female circumcision and to assist and support those brave men and women in this country and in other countries who, in their own communities, are leading the battle against this abhorrence. If, however, this racialist phrase is included, I am afraid that it will damage the effect that all of us want to see. You are going to shut people's minds. You are going to weaken the leadership now being given by those brave men and women because they will be told by their own people, as they are being told by the Government's statutory body, that this is a racialist Bill.
All I am saying to the Government tonight in supporting the noble Lord, Lord Kennet, on Amendment No. 1 and including with it my Amendments Nos. 3 and 4, and also in supporting the joint Amendment No. 5, is, "Please tell us that between now and Report stage you will talk with doctors, with the legal advisers to the Government and with the CRE, and find a form of words that does not in any way hint at racial discrimination."
9 p.m.
Baroness Seear: In supporting this amendment, very briefly I want to make three points. As all the previous speakers have said, we are at one in wishing to get rid of this obnoxious operation. There is no question whatever about that. We fully recognise that the Government are as anxious that this operation should cease as we are on these Benches.
However, we take exception to the term "mental health", and this arose last time when the previous Bill was before this House. We take exception to the introduction of "mental health" as it is an exceedingly vague term. What is more, given the kind of pressures that can be put upon young women by a family who

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wish to see operations of this sort carried out, the condition, which could be considered one of mental ill-health, could well be induced in a girl as a result of these pressures. This, combined with the vagueness of the definition of "mental health", in my view is an extremely good reason for excluding those terms.
Finally, I can well appreciate that many people in your Lordships' Committee must wonder why so much anxiety is aroused by the term "custom and ritual" practice. It may be that in rational common sense there is no need to be concerned about those words, and the Government's intention in including them is clear and is entirely respectable. However, the fact remains that the appearance of those words has aroused great anxiety and distress in responsible quarters concerned with relations between ethnic groups. When a body as responsible as the statutory body, the Commission for Racial Equality, writes to say that it very much hopes that these words will be removed, it surely is important when dealing with a matter as sensitive as this, a matter which must arouse very considerable feelings of anxiety and anger in various groups among the ethnic minorities, that we should fall over backwards to ensure that the legislation includes no phraseology to which they can take exception. If for no other reason than the representations made by the CRE, I beg the Government to find some other form of words to bring about the ends which we all wish to see achieved.
Lord Coleraine: I have considerable sympathy with Amendment No. 1 which is in the name of the noble Lord, Lord Kennet, and some of the arguments with which he has presented it. His amendment seeks to obviate the need to introduce the mental health aspect as a cover for the trimming operations which some women may require. On the other hand, I find it very difficult to go much further than this for three reasons. The noble Lord has already referred to the first—the fact that his amendment at present provides that operations required in connection with physical health may be carried out without the assistance of a registered medical practitioner. Secondly, it seems to me that his amendment makes no provision for the case where there may be something substantially wrong with a woman—such as a gross physical abnormality—which cannot be dealt with by a minor cosmetic operation, however widely you interpret those words, but is a matter which is causing distress and yet it is not a matter of physical health. I believe that that falls through the net provided by the noble Lord's amendment. However, the more serious reservation—
Lord Kennet: If the noble Lord will give way, I think that the noble Lord will agree that the Bill itself makes no mention of abnormality. If at a later stage the noble Lord himself were to seek to carry that into the Bill, I should certainly support him.
Lord Coleraine: I am with the noble Lord on that and I am trying to help him by drawing attention to what he and I would agree is something that ought to be included if it is possible. However, the third and substantial reason why I cannot support him is his antipathy to the use of the words "custom and ritual", and I shall return to that.
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Amendment No. 2, standing in my name, is an alternative amendment in form to the noble Lord's amendment and it cannot be called if his amendment is accepted. Therefore, I think it will be convenient if I speak to Amendment No. 2. However, I view it as a probing amendment and I do not have any fixed intention of moving it formally if and when I have the opportunity to do so.
I propose that only operations required for physical health may be performed on persons under the age of 16. I fully accept that there will be girls of 14, 12 or 10 who will be concerned at the shape or appearance of their external genitalia and no doubt they will be teased and feel badly about it. Nevertheless, if they are to be operated upon for depression, it appears to me—and I stress that I can only speak as a layman—that in some way they ought to be encouraged to wait until they are of moderately mature age before undergoing a serious operation of this nature.
It might he that the enforced wait would see a change of mind. At the same time, it might be that if a girl thinks that in a few years she will be able to have the operation, that will make the distress which she is possibly suffering while she waits for the operation, because she is too young, more tolerable.
I was not present during the debate on the Second Reading of this Bill, but I have read the report very thoroughly and I respect the reasons why the noble Baroness, Lady Masham, now sponsors the Bill, mental health clause and all, and how she came to find that her wish to eradicate female circumcision overrode any other problems. The noble Lord, Lord Hatch, has referred to the mental health amendment tabled during the Committee stage of the previous Bill last year, and I believe that he has referred to it as an anti-racial amendment. He has also referred to the Members of your Lordships' Committee who voted one way and those who voted the other way. As one of the Conservatives who voted against the mental health amendment, may I say at once that it seemed to me last year, and it seems to me now, that the objections to the mental health clause put forward by the Commission for Racial Equality and some of your Lordships, in subsequent repetition in other places, have been so exaggerated as mischievously to endanger the principle behind the Bill.
It is of course a fair question whether we should be seen to be legislating in an apparently uncaring manner, as when we appear to be providing that a female who asked to have one of these operations and is in a severe depression which would be relieved by the operation, cannot have the operation because of what has caused her depression. But having said that, the Bill is intended to outlaw a group of practices which are endemic apparently only among a very small number of ethnic minority groups, and which the great majority of those minority groups or communities deplore.
The Bill is not branded as racialist on this account, but if you brand the use of the words "custom and ritual" as racialist then it seems to me that you are branding the Bill itself. I see this phrase now as central to what we are trying to do, and the words are words which should not be dodged or fudged. The use of

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these words in some way in this Bill is essential to make clear the exact nature of the practice that we are condemning.
Lady Kinloss: May I ask the noble Lord, Lord Kennet, why in his Amendment No. 1, paragraph (a), he leaves out the words,
"and is performed by a registered medical practitioner"?
Surely if an operation is to be performed it should be by a registered medical practictioner.
Lord Kennet: In drafting this amendment my wish on this point was only to please the sponsor of the Bill and the Government. If I have failed to do so they will no doubt tell me in what way, and I shall be only too happy to join with other noble Lords in putting it right.
Lord McNair: All the amendments, except my own No. 7, have one thing in common: that is, they all seek to exclude mental health altogether as a justification for the legitimate operations which we want to leave lawful. On the whole, two reasons have been given for this desire to exclude mental health. The first is that by including it we build a loophole into the Bill through which the wrong people may creep out. The answer to that is that if the Royal College of Obstetricians and Gynaecologists tell us clearly that for them mental health is necessary as a criterion, we have to take their opinion seriously. They are the people who are in touch with the patients, they know better than any of us, and so far as I am concerned if they feel that mental health is an essential criterion then we must provide for it. In that case we must of course block the loophole which otherwise mental health builds into the Bill.
The second reason—which I do not think we have heard tonight but which we did hear at Second Reading—for excluding mental health is that if you are mentally ill the only proper treatment for you is psychotherapy and not surgery. This is terribly out of date. I do not believe that any good doctor today draws this sharp distinction between the mental and physical health of his patient.
Surely the trend, growing with every passing year, is to recognise that nearly all conditions are psychosomatic—some more psycho; some more somatic; but nearly all a bit of both. If sometimes treatment for apparently physical ills can be psychotherapeutic, then I am prepared to believe that some apparently mental ills can sometimes be helped by surgery. Cosmetic surgery, by definition, is a recognition of this fact, is it not? I know it can become a racket, but I cannot believe that this House would dare, or even wish, to prohibit cosmetic surgery ipso facto. Therefore I feel that we have to provide for mental health in this Bill.
It is difficult to keep all these amendments separate, but I shall try to talk about Amendment No. 1. I am
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sure that it would fairly often be impossible to claim that an operation of the type that we wish to permit was necessary for the physical health of a patient. Therefore the surgeon, if he got into trouble, would have to rely on paragraph (aa) and claim that the operation was a "minor cosmetic operation". I ask the Committee to note that it must be both minor and cosmetic; they are not alternatives.
Lord Kennet: Has the noble Lord noticed that the words "necessary for the physical … health" are in the Bill as drafted by the sponsor?
Lord McNair: Yes. As I said, the surgeon will probably be relying on claiming that it is of a minor cosmetic nature. Minor it almost certainly will be, and the practices we are seeking to render illegal are minor surgery. I do not think there is any doubt about that.
What about the word "cosmetic"? What would the courts make of that word? One can throw dictionary definitions around, but none of them is binding or authoritative. But Chambers dictionary defines "cosmetic" as an adjective as,
"purporting to improve beauty, especially that of the complexion. Correcting defects of the face etc. or supplying deficiencies".
I wish among our small number we had a lawyer present, for I wonder what the courts would make of this word "cosmetic". It is so subjective. I would think that a cosmetic operation is one which would make a person think that he looked better and that it is in the eye of the patient rather than being capable of objective definition. Perhaps the surgeon who is in court because he thought he had performed what he thought was a perfectly legitimate operation, will get away with it on the definition of "cosmetic"; but perhaps not. This is where as a laymen, both in medical and legal matters, I hope that we shall have some guidance from Government experts.
What will be the effect if we had in court instead one of the people we are trying to stop? He has performed this female circumcision, he has been caught and has been accused of an offence under this Act (as it may be). He could not claim that it was necessary for the physical health of the patient so he, too, would have to rely on paragraph (aa). If he is not a registered medical practitioner, I take it we could get him for that any way. If he is a registered medical practitioner, he could safely claim that what he did was a minor operation. It was a minor operation. All he would have to claim to get away with it would be that it was "cosmetic". What worries me is that if this word "cosmetic" adequately protects legitimate operations which we wish to allow to continue, is there not a danger that it will also afford a loophole to the people we wish to put out of business? On balance, I feel that I cannot support this amendment; but I shall wait to hear what is said by the noble Baronesses, Lady Trumpington and Lady Masham.
9.15 p.m.
Lord Richardson: We have been talking about the meaning of words. As a doctor, I wish to take up a moment of your Lordships' time in talking about the meaning of words to doctors who will have to deal with these problems. The noble Baroness, Lady Seear, said that "mental health" was a vague term. I assure her it is not a vague term to doctors. They understand it and they use it constantly, although it covers an enormous spectrum from the frankly insane to the sadly anxious. "Cosmetic" means nothing in terms of surgery except for face-lifts and putting straight noses and matters such as that. It is a very ill-defined term to the minds of doctors, and, as the noble Lord has just said, it would be a very vague term in the courts.
I am on firmer ground over "minor" and "major" operations. These terms are not to my knowledge used by surgeons, and have not been for years. What may appear to be a short or small operation can go wrong. The anaesthetic alone can go wrong; so can the surgery. Difficult, prolonged procedures may carry very little mortality and, because they are undertaken by the most highly skilled, carry little morbidity and little chance of things going wrong.
I feel extremely strongly that the words "mental health" must be included in this Bill. If one does not do that one will exclude from treatment a number of patients—I do not wish to overstress that this will be a large number, but it will be a significant number of patients—who could be relieved by surgical procedures. It is naïve and ignorant in the extreme to say that all mental disease can only be treated psychologically. It is not true. Alteration of circumstances, alteration of surgical situations, can indeed play a major part in the relief of psychological symptoms and mental disease. If this term "mental health" is excluded you are going to debar in your legislation a significant number of women of all faiths, of all beliefs and of all colours and of all ethos—nothing racial—from the operation that could help them. To try to disguise that fact by using vague terms such as "cosmetic" and "minor" to my mind is merely partially to diminish the risk of people going without procedures that should be done for their health, including physical and mental.
The argument that any procedure should be delayed until after 16 is not one that I think would find many doctors in sympathy with it. Children are intensely sensitive; they are intensely inquisitive; they love to be normal and the same as everybody else in all their appearances. When it comes to appearances of their genitals they may well discover an abnormality in a circumstance of which their parents would strongly disapprove, and you have a splendid ground in which to plant all sorts of lifelong psychological troubles that can blight a life; whereas calm understanding and, in that instance, minimal surgery could relieve them.
Therefore I feel that if we exclude "mental health" from this Bill we are bowing to a fear of words that I fully understand, at the risk of doing real harm; at the risk of creating a Bill that would obstruct and prevent the proper treatment and management of women in this country. Therefore I hope greatly that your Lordships will reject any amendment that excludes the mental side of health that is so predominant in such a
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number of illnesses and in fact is increasingly so.
Lord Hatch of Lusby: May I ask the noble Lord before he finishes to give the Committee the benefit of his very wide knowledge of the central issue of mental health as it is included in this Bill? Does he recognise that girls who have been brought up in a society in which female circumcision is the practice and the ritual, and indeed in some cases the religion, may very well suffer from mental depression if they are deprived of this operation? We are all agreed that they should be deprived of this operation. Does he not see the difficulty of saying that this form of mental depression must go without an operation, whereas the forms that he has been describing shall be allowed an operation? Does he not see that to many people this appears to be racial discrimination?
Lord Richardson: I certainly see the point which the noble Lord, Lord Hatch, has raised—that women of a certain ethos and belief could become mentally ill if they are not allowed to conform with their beliefs, and that it could lead to tremendous conflict. That situation is bound to arise. I cannot do more than say it might well be that expert opinions, most carefully considered in their giving, could lead to special requests for this operation to be done. I cannot see that there could not be administrative arrangements in order to allow it. It would have to be done by ensuring that impartial opinion of the highest level is obtained so that those who are willing to do these operations for money are not enabled to do so because of the very weight of opinion it would have to support.
As the noble Lord has said, this problem is bound to arise. However, I feel very strongly indeed that if this Bill is to be so phrased as to impair the ability of doctors in their management of patients—and I am not speaking for the Royal College of Obstetricians and Gynaecologists; I am speaking from my own contacts, and I have talked to a lot of doctors in my life—it must be very much questioned. I say that because, as I tried to make clear, I am not talking solely about the white girls of this country; I am talking about all the young female citizens of this country as well as, of course, the others who have to have serious operations on that part of their body.
I accept what the noble Lord has said—that there could be great mental trauma for some women who have been brought up in certain beliefs. I think that that is undoubted; but I feel as strongly as I can that this Bill should not create a situation that impairs proper medical practice as I would see it, as my profession would see it, and as I believe the majority of people would see it, for those who are living in this country, whatever their race.
The Lord Bishop of Gloucester: I wonder whether the Committee will be indulgent to a bishop who finds himself a little lost in the forest of marshalled amendments at this point. I want to make two points, which I hope are not inappropriate at this moment. It goes without saying that, like all other speakers, I am totally against this practice, and hope that we shall legislate against it to assist its inevitable demise, which surely must happen in any case; but we wish to hasten

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it. It seems to me a thousand pities that, so far at least, the wit and wisdom of both politicians and draftsmen have not been able to find a form of words around which we can gather, since we are all so united over the principle which we all seek.
If it is true that the phrase "custom or ritual" is to be seen as racialist by a significant number of people, it seems an aggravation to our dilemma that those who are going to find it perhaps almost more painful than anybody else are precisely those who will in the end be the most effective agents for achieving what we desire. Surely it is not prosecution we want; we want to prevent this practice happening at all. Those who will teach, exhort and persuade most effectively to that end will surely be those who are already members of these ethnic communities and who, having themselves been enlightened, will seek to spread this truth to others. If they are saddled with the additional task of apparently being the advocates of a racialist piece of legislation, it seems to me we are adding to their already considerable burdens. I would wish with all my heart that we could avoid that particular phrase if that is indeed the problem.
9.30 p.m.
Secondly, I have a private quarrel, if I may say so, about the word "ritual" itself in that phrase. It seems to me that the word "ritual" will imply to most people who read it something religious. I have no doubt of course that it can have a secular meaning, and without the benefit of lawyers perhaps I speak out of turn. But certainly in common parlance I believe most people will think that we shall be talking about a religious practice. As I understand it, those people involved in female circumcision and these other operations may have inherited a kind of unspoken tradition that this is something to do with their religious culture. It has, and can find, no backing responsibly in the teachings of, I dare to say, any known religion: certainly not Christianity, certainly not, I understand, Islam and certainly not Judaism. That being so, is it really the right word to use in this context? I wonder whether, even at this late hour, it is possible for the noble Baroness, Lady Trumpington, to make one more effort to get together with other interested people outside this Chamber to see whether some solution cannot be found which would achieve our aim without this provocation.
Lord Rea: Since the Second Reading debate on this Bill, I have been in touch with a number of people and authorities who are directly concerned with this legislation. My remarks, like the remarks of most of the speakers so far, will be directed generally to all the amendments which are on the Marshalled List. I have a lot of sympathy with nearly all of them, although I was not quite able to follow the reasoning of the noble Lord, Lord Coleraine, about different treatments for girls of different ages.
Among the people I have been in touch with are members of the Commission for Racial Equality and I have also spoken with the Government's own legal adviser, who has been advising on the drafting of this Bill. I accept completely that the contentious Clause
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2(2) has been accepted in good faith by the Government to close off a possible loophole which, it has been pointed out to me, might be used by unscrupulous operators. But as regards the use of the words we have been hearing so much about this evening, "custom" and "ritual", whether in Clause 2, as in the Bill, or in Clause 1 at the very beginning of the Bill, as part of the definition of what is prohibited—and that was suggested by the noble Lord, Lord Hunter, two years ago during the Committee stage of an earlier Bill—both ways of inserting the words would be unacceptable to the Commission for Racial Equality and I think we have heard enough about why they feel that these two words are offensive.
I asked them whether they felt the words "traditional or cultural", as in the amendment of the noble Lord, Lord McNair, would be more acceptable to them. I learned that they would not be: the principle of outlawing a tradition or custom as such, even one which is so obnoxious as this one, is one which, if at all possible, should not be embodied in a piece of legislation. This is really why so much trouble was taken by the noble Lord, Lord Kennet, to define this offensive operation when the Bill was first drafted, without using words which might cause offence.
Incidentally, as has been pointed out by other people, the words "ritual" or "custom" are in no way, to my mind, more accurate than the word "cosmetic", which is something that the noble Lord, Lord Kennet, has pointed out already. I feel very much that the Department of Health and the Commission for Racial Equality should get together on this and try to agree a formula which would satisfy both. For me, it seems to be almost impossible, or very difficult, to be a go-between. I think that direct across-the-table discussion between the two bodies most directly concerned would be most valuable and might lead to this solution which seems to elude us. There is still, after all, some time for the Government to introduce the appropriate amendment which would please us all.
Baroness Trumpington: I can well understand the purpose behind this amendment and admire the ingenuity of its drafting. Yet I have to say that it is not acceptable to the Government. If the amendment were carried, then the Bill would interfere with what is now quite ethical and legitimate surgery. The medical advice available to me is that there are some operations that can be judged to be clinically necessary for a patient's mental health that are neither minor nor cosmetic, even by generous interpretations of those terms. It would be quite unacceptable for this Bill to interfere with the patient's right to have that type of operation, even if it is judged to be clinically necessary for her.
In trying to avoid elsewhere in this Bill using the words "custom" or "ritual" we should not in any way interfere with the most sensitive predicament which has nothing whatsoever to do with female circumcision. We must ensure that the scope of the offence created by this Bill is limited to female circumcision and only that. If it is suggested that the Government, by their obstinacy, are preventing the passage of the Bill, it can, with equal or greater justice, be said that the resistance of the noble Lords, Lord

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Hatch and Lord Kennet, to the Bill as currently drafted, on the best legal advice, is now preventing the Bill from proceeding to statute. Their resistance is irrational. If the use of the words "custom" or "ritual" is considered racialist, then it must follow that the intention of the Bill itself is racialist, as my noble friend Lord Coleraine has pointed out, since it is a customary or ritualistic practice that the Bill seeks to prohibit. It is absurd to describe the words as racialist, and we do not accept this.
Incidentally, in answer to the right reverend Prelate the Bishop of Gloucester, female circumcision has nothing to do with religion. The definition of "ritual" goes much wider than its religious concept, according to the Oxford English Dictionary, which states:
"Pertaining or relating to, connected with, rites".
I shall leave the matter there for the moment.
The other drawback to this approach is that surgical procedures do not fall neatly into categories of "minor" and "not minor". There is no clear dividing line that determines what is or what is not minor.
As I have said, before I gave the quotation, there are operations which would involve surgery that is clearly not minor by any definition.
And there are also other legitimate procedures that might well be caught by this amendment. It would raise doubts for doctors and patients about whether or not a given procedure were against the law. There is a quite unnecessary and unacceptable effect. A Bill whose prime purpose is to clarify the law should not of itself raise difficult legal issues in an area in which there is no present difficulty. We should not be jeopardising patients in that way. The amendment in its whole approach, far from helping to clarify the law, would make it more obscure. The noble Lord, Lord McNair, is certainly correct in what he says in this context. The word "cosmetic" is one to which the courts would be reluctant to give effect.
It is awfully boring to repeat things, but I must repeat to the various noble Lords who have spoken the quotation from my letter to the noble Lord, Lord Kennet, which I gave at Second Reading. I said:
"If you introduce the concept of mental health then it is necessary to have a saving clause such as that now in Clause 2(2). Otherwise there is a loophole that would impede successful prosecution. There is no sensible definition of 'cosmetic', 'minor' or 'abnormality' that would prevent difficult questions of law. There are probably forms of quite legitimate surgery that are neither 'cosmetic' nor 'minor'. All of this serves to raise doubts and legal questions about what ought to be straightforward clarification of the law." [Official Report, 15/5/85; col. 1242.]
If I may skip to the penultimate paragraph on that page, I said:
"the prohibition is not in any sense linked to the fact that the practice is a custom or a ritual. It is the practice itself that is being made an offence".
Quite honestly, the noble Lord, Lord Richardson, has answered, with great authority and medical knowledge, the various questions that have been raised far better than I could. However, I have been directly challenged and I must reply to the various challenges. I think that I can speak on behalf of my noble friend Lady Cox when I say that she is fully behind the Bill as
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it stands. The noble Lord, Lord Kennet, suggests that the DHSS has refused to attend meetings to discuss alternative approaches to the Bill. This ground has been well covered in many hours of previous discussion. The Bill as it stands now would work well and would meet all our criteria, and it meets those of the medical profession. Alas!, I must say to the right reverend Prelate that we need no further discussions. We need an effective Bill—this Bill.
The noble Lord, Lord Kennet, asked whether the words "health", "custom" and "ritual" are not also vague. The short answer is that they are sufficiently precise to allow for effective legislation. The terms "cosmetic" and "minor" are not. I said in answer to an earlier question of both the noble Lords, Lord Kennet and Lord Hatch, that we were looking at the applications of those organisations which had approached us for help in the field of education. The noble Lords are premature in asking whether that help will be forthcoming. It would be quite inappropriate for me to give instant decisions on questions such as this at this moment.
What would the amendment of the noble Lord, Lord Kennet, allow? What operations would the amendment ban—female circumcision by doctors, operations justified medically which are neither cosmetic nor minor? Some sex change operations would, for instance, be involved. The noble Lord, Lord Kennet, asked whether this Bill would ban something that the Royal College of Physicians wants to do. No. The word "cosmetic" is vague. Are not the words "custom", "ritual" or "required" equally vague? No. I repeat that the word "cosmetic" could not include those sex change operations.
The noble Lord, Lord Hatch, said that if the Bill passed as it is it would surely end up in the European Court of Human Rights. We would find that it went there only if it discriminated in practice against certain races. They cannot find against us because the phraseology has no practical effect. Quite simply, the Government cannot accept the first amendment.
Baroness Masham of Ilton: As the noble Baroness, Lady Trumpington, has said, this amendment does nothing to clarify the law. If the amendment is carried, the Bill will interfere with legitimate surgery and will leave the legal position in some doubt, as has been stated by the noble Lord, Lord Richardson.
I should like to remind the Committee that this Bill has been through all its stages in another place. It has had legal drafting. If the Bill is wrecked tonight, it will lose the Government's goodwill towards this very serious problem of female circumcision and so may be the grants which are so badly needed to help educate people will also be lost. I have been told by a campaigner who is campaigning not only in Britain but throughout many Commonwealth countries on the prohibition of female circumcision that behind every woman there is a man. Many women who allow female circumcision on their girls do it because they are fearful, they are obedient and they submit to what nearly everyone in Britain feels is the most horrific and cruel operation which has no medical benefit to the person who is operated on.

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9.45 p.m.
Female circumcision is an assault on the person who is circumcised. People have said to me that they cannot understand why we have been so long in prohibiting this practice. We all know that it has been very difficult to come to a satisfactory position. I should like to ask the noble Lord, Lord Hatch, whether the girls whose screams he heard at the end of his garden had been asked. When we legislate for children, as the noble Baroness, Lady David, well knows, the wishes of the children are paramount. I do not think that these children are asked whether or not they want to be circumcised. If they were asked, I am certain what the answer would be.
I should like to say to the right reverend Prelate that I have sympathy when he says that he is not happy about the word "ritual". I would ask him to wait until Amendment No. 7 is moved because that is where this comes in. I would ask your Lordships not to accept this amendment because it might well wreck the whole Bill.
Baroness Jeger: Perhaps I may intervene briefly. I should like to begin by apologising to the Committee. On Second Reading I made a terrible mistake and I grossly misled your Lordships. At column 1244 of the Second Reading debate on 15th May the noble Baroness, Lady Masham, said:
"As a lay person I cannot argue with the Royal College of Obstetricians and Gynaecologists".
Hansard records that I said—and therefore I must have said it—
"My Lords, why not? They are only men".
I was very embarrassed afterwards in case I had made a mistake. That is why I want to put the record straight. I have checked on this statement and I have to inform your Lordships, asking your forgiveness, that the Council of the Royal College of Obstetricians and Gynaecologists is composed of 31 men and one woman. I shall be apologising to the lady concerned that I overlooked her presence.
We have been discussing this matter for a long time and we have to face up to the fact that this is a Bill to outlaw female circumcision on almost any grounds. I stand by that. Therefore I only wish that we could come to agreement on this without having the difficulties which have arisen, purely I feel for verbal reasons. My hesitation consists of these points. We are saying, and rightly saying, to doctors and other people—and I agree with the noble Baroness, Lady Masham—that you cannot plead in aid as a defence that you did the operation for ritual or customary reasons. My problem is that this creates a red light. No doctor will go into court and plead that defence because we have put into the Bill that such is not an acceptable defence. The doctor will read on a little further and then say, "I did it for her mental health". I am very worried that this will leave the way open for these operations to be carried out—operations which are in effect female circumcisions—and not the kind of operations of which the noble Lord, Lord Richardson, has spoken, or sex change operations which I would have thought were part of normal surgery.
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In the same way doctors can operate on a little boy with big ears, and they do not need any legislation to say that they may do so. Operations to correct what, in a sort of shorthand, I may call abnormalities are surely acceptable at the present time. I have no knowledge of their not being possible. I therefore wish that we could achieve some meeting of minds on this point.
I was very offended, as I often am, by the Minister in another place, who stated:
"While I am sure that their Lordships will wish to look at the Bill, I hope that they do not embark on amateur draftsmanship of their own and get the Bill back into complications that might run the risk of frustrating its purpose".—[Official Report, Commons, 19/4/85; col. 585.]
No one wants to frustrate the Bill. We are all amateur draftsmen. Members in another place, including the Minister, are amateur draftsmen. It is our duty to try to see to it that the wording of a Bill, as it passes through this revising Chamber, is made as acceptable as possible.
It is all very well for us to say that we understand what is meant and that there is no difficulty, but we cannot ignore the fact that some of the people most involved are worried about this point. Although the noble Baroness the Minister might say that there has been enough talk already and that there is nothing left to talk about, I very much support my noble friend who wishes that between now and Report stage we can find out whether it is possible to meet all our anxieties. By that I mean not so much our anxieties, but the anxieties of the women and men most concerned.
I want to ask the noble Baroness the Minister, if she can give me an answer, whether there is in the Government's mind an intention to set up any notification procedure. How will we know what the Bill is achieving and whether or not it is effective? How will we know how many circumcisions have been carried out each year under Clause 2(2) or in other ways, because it seems to me that unless there is such notification, policing and following up—
Baroness Trumpington: It is not my Bill.
Baroness Jeger: I apologise. The noble Baroness has been speaking so much today that I cannot think there is any Bill before your Lordships which is not hers.
Baroness Trumpington: I agree.
Baroness Jeger: We feel the same. It really is Ladies' Day at the Lords. I shall direct my question instead to the noble Baroness, Lady Masham, and ask her whether she has in mind any notification process of the kind which there has to be in the case of abortions and so on, so that we will be able to see how the Bill is working out. Meanwhile, I hope that the noble Baroness will not feel that she has to tell the Committee that between now and Report stage there is no hope of a meeting of minds over this particular difficulty.
Baroness Masham of Ilton: I shall try to answer the noble Baroness, Lady Jeger. I know that there are campaigners among the organisations—the Black

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Women's Association, for one—who are trying to get a survey on how many circumcisions are carried out. This is, of course, very difficult and funds are needed to do it. They are asking the Government for those funds and Ministers in another place have made sympathetic noises. Your Lordships may remember that at Second Reading I tried to press the noble Baroness, Lady Trumpington, on that very point. Again, she made encouraging noises. Perhaps she is going to make some now.
Baroness Trumpington: No; I was going to say that it is very difficult for the Government when, at Second Reading, two organisations are said to be asking for help and now three organisations are asking. That is one of the reasons why it would be premature to say how help could be given, if it is given.
Baroness Masham of Ilton: In trying to answer the noble Baroness—
Baroness Jeger: Perhaps I did not make my question clear. I was not asking about help to these organisations, which I hope will be forthcoming, but about whether there is to be a legal obligation, as there is with the termination of pregnancy, for these operations to be registered and recorded, so that we know what is happening; that is, through the legal process and not through any voluntary organisation.
Baroness Masham of Ilton: That is the whole point of having this legislation. It is to clarify the position, because there are some people who now say that it is an assault and is illegal to perform a circumcision, but nobody has taken anyone to court over it. That is the difficulty. The whole point of this Bill is that when it becomes an Act it will clearly be illegal for anyone to perform a circumcision. These cases may then come to light.
The other point I wanted to make to the noble Baroness, Lady Jeger, is that I also picked up what was said by a Minister in another place about the legislation of the House of Lords. I showed that passage to the noble Lord, Lord Denham, the Chief Whip, who took the same view as we did.
Baroness Gardner of Parkes: I have not spoken against these amendments, though I oppose them, because I feel we have said so much at the previous stage of the Bill and on earlier occasions. It seems to me judging from the last few remarks that we are getting slightly confused. I understood that the noble Baroness, Lady Jeger, was asking whether, when circumcision is illegal, there will be any way of notifying what legal operations of a similar nature had been carried out for medical purposes. I thought that was the question the noble Baroness, Lady Jeger, was asking. Obviously, if the Bill goes through, no one will be notifying anything done illegally. That would be more than we could ever expect. It is an interesting point.
I strongly support the Bill and I am convinced that the only way in which it can be effective is to retain the
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words "custom or ritual", and unless some other formula can be produced I would prefer to see the Bill with those words than to lose the Bill.
Lord Kennet: The time has come to decide about Amendment No. 1, although we have been discussing all the amendments. Perhaps I may say, first, to the noble Lord, Lord Richardson, who urged the Committee to reject any amendment that excludes mental health as a ground on which operations may be performed, that Amendment No. 1 does not exclude mental health. Some of the later amendments do.
The noble Lord, Lord Coleraine, said that if you brand the words "custom or ritual", you brand the Bill itself. No, I think not. We wish to ban the operations, not because they are someone's custom or ritual, but because they are cruel and harmful to health. It is quite possible to brand certain words in a Bill as offensive without branding the purpose of the Bill as offensive. Many noble Lords have said that they agree with the Bill and, of course, we all do.
I come to what I think we would all agree is the main point, if I could have the attention of the noble Baroness for a moment. She said, not in her opening remarks but just now, that the amendment would interfere with legitimate surgery and prevent certain operations which are neither minor nor cosmetic and which ought to be done. I was contemplating challenging her, "What operations are they?". They are operations which are not for the physical health of the patient; they are not minor and they are not cosmetic because all those are clearly permitted under the amendment. I was baffled until a moment later she let the cat out of the bag. They are of course sex change operations.
We have to remember at this point that we are talking only of female to male sex change operations, since all that the Bill bans in Clause 1 are operations to the female genitalia. This is a new one. I believe that this is the first mention that we have had in the endless discussions on the Bill of female to male sex change operations as a factor which we ought to take into account, and we have had it from the Government Front Bench.
Many noble Lords—the right reverend Prelate the Bishop of Gloucester, the noble Lord, Lord Rea, and the noble Baroness, Lady Jeger—have asked whether it might be possible for the Government to envisage having conversations in private between now and the next stage of the Bill. Many noble Lords who have spoken know that there has not been enough consultation by the Government with the communities concerned, with the Commission for Racial Equality or with the friends of the amendments in this House. Can the noble Baroness give the Committee any hope that between this stage and the next there will be discussions on the new subject that she introduced of female to male sex change operations between the Government and representatives of the ethnic communities, the Government and the Commission for Racial Equality and the Government and the friends of the amendments in this House? I hope that we shall hear that the Government are prepared to do that before the Report stage.
Baroness Trumpington: Once again I have been challenged. We are discussing this particular amendment. I have no intention of giving reassurances to the noble Lord.
Baroness Masham of Ilton: May I try to answer the noble Lord, Lord Kennet, on one issue, although it would be better answered by the noble Lord, Lord Richardson. An operation may set out to be a minor one but could turn into a major one if something went wrong. That is the difficulty.
Lord Kennet: Accidents can happen to anybody at any time, but the intention of the surgeon of course would be to carry out a minor operation, and I think that the courts would consider the intention.
The noble Baroness has shown complete intransigence about this, if I may say so. She has refused to have any discussions with anybody between now and the next stage of the Bill, which all noble Lords will know is a most unusual proceeding. I regret that she has placed me in a rather difficult position. I believe that Amendment No. 1 is faulty. I gave one reason for thinking that in my opening remarks and asked the noble Baroness to help me discover whether that was true. She has not done so. She did not mention it. I am ready to admit that the word "cosmetic" is a little vague, though I think that it is probably not much more vague than the others, but let that pass.
However, since there is no hope of any movement from the Government on this issue which troubles so many people, and since I believe that I am right in thinking that the amendment, if it were carried, could itself be amended at a later stage, I feel that there is no alternative but to ask the Committee to divide on the amendment.
10.4 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 9; Not-Contents, 29.

DIVISION NO. 1

CONTENTS

David, B.

Kennet, L. [Teller.]

Gloucester, Bp.

Kilbracken, L.

Hatch of Lusby, L.

Rea, L.

Jeger, B.

Seear, B. [Teller]

Kagan, L.

NOT-CONTENTS

Ampthill, L.

Lucas of Chilworth, L.

Brabazon of Tara, L.

McNair, L.

Caithness, E.

Masham of Ilton, B. [Teller.]

Coleraine, L.

Monson, L.

Cox, B.

Mottistone, L.

Craigavon, V.

Ponsonby of Shulbrede, L.

Darcy (de Knayth), B.

Renton, L.

Elliot of Harwood, B.

Renwick, L.

Elton, L.

Richardson, L. [Teller.]

Faithfull, B.

Skelmersdale, L.

Fortescue, E.

Swinton, E.

Gardner of Parkes, B.

Trumpington, B.

Hunter of Newington, L.

Vickers, B.

Kinloss, Ly.

Winstanley, L.

Long, V.

Resolved in the negative, and amendment disagreed to accordingly.
10.12 p.m.
[Amendments Nos. 2, 3, 4 and 5 not moved.]
Lord Hatch of Lusby Lord Hatch of Lusby moved Amendment No. 6:
[Printed 3/6/85; col. 573.]
The noble Lord said: I want to say just a few words about this amendment because I deliberately did not include it in the comments that I made on Amendment No. 1. May I take this opportunity, first, to answer the noble Baroness, Lady Masham, when she asked me the direct question: were the children consulted? No, of course, they were not. However, perhaps I may make a point to the Committee. This operation was performed in a women's secret society, so please do not put all the emphasis on male domination. Although there is of course a degree of male domination in the whole syndrome of female circumcision, there is also a very strong female tradition; and it is a female secret society that carries out this operation, certainly in all the communities that I know where it is performed.
The other point which I want to answer has been made both by the noble Baroness, Lady Masham, and by the noble Baroness, Lady Trumpington. They accused those of us who have been tabling amendments of endangering the Bill, of possibly killing the Bill. However, we could have had this Bill 12 months ago and it was the Government who killed the Bill on that occasion. This is very close to blackmail. The Government are saying that we can only have a female circumcision Bill if we have it on their terms—and I ask the Committee to note not on the terms of a free vote, but on the Government's terms.
I would beg the noble Baroness, Lady Masham, to note this—and between now and Report stage take it into her own hands, if the Government will not help her—and to consider what has been said in Committee and to see whether she can find some bridge to those who fear that the Bill itself may be smeared and may have its effect deteriorated because of this clause, and bring us back at Report stage to a formula which can unite the House. I am sure there are lots of us who would help if asked. I would remind those who mentioned the debate in the other place that the hope was expressed at Third Reading stage that this House might improve the Bill. Perhaps we can do that before Report stage.
We still have not had any answer from the Government as to the judgment of their own statutory body, the Commission for Racial Equality. Nobody from the Government side has attempted to answer the assertion which that commission made that this Bill had a racial aspect to it. This amendment is again an attempt to get away from the danger of that racial flavour.
I should like to ask the noble Lord, Lord Richardson, a question on this aspect. I shall read how Clause 2 (2) would read if the amendment were passed:
"In determining for the purposes of this section whether an operation is necessary for the mental health of a person, no account shall he taken of the effect on that person of non-medical factors."
I should like to ask the noble Lord, Lord Richardson, to tell the Committee whether the operations which he described would come under the category of being

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decided upon for non-medical factors, or if this amendment were passed whether it would still in his opinion inhibit the legitimate operations which he believes that doctors should still be allowed to perform.
While I am on this point, I would draw the attention of the Committee to an important and dangerous implication in the speech of the noble Baroness, Lady Trumpington. The noble Baroness, as I understood it, agreed with the analysis of the noble Lord, Lord Richardson. I hope that he will correct me if I am wrong, but I understood the noble Lord, Lord Richardson, to say to me, when I asked him the question, that if necessary he would be in favour of there being exemptions, exceptions, to the prohibition of female circumcision. Not of the cosmetic operations, or any other operations, but exemptions to the illegality of female circumcision if this were warranted by the mental depression of a girl, or young woman, who was deprived of that operation through this Bill. I was astonished to hear the noble Baroness, Lady Trumpington, agree with this. Are the Government therefore saying that they are prepared to see exemptions from the operation of female circumcision if the mental health of girls who are deprived of that operation is such that the doctor will ask for exemption? Is that what the Government are saying? That is what it sounded to me that the Government are saying. If that is right, this is driving a coach and horses through the Bill.
I come back to Amendment No. 6. All I am asking of the noble Baroness, Lady Masham, is that between now and Report stage she will consider this alternative phraseology, the use of the term "non-medical factors". I should be grateful if the noble Lord, Lord Richardson, would tell us whether that would satisfy the medical profession, but I ask the noble Baroness, Lady Masham, to discuss this between now and Report stage with the authorities concerned to see whether this, something similar or something based on this could not be brought back to us at Report stage to do away with this wasteful quarrel that we are having which may affect the influence of the Bill when it leaves Parliament. I beg to move.
Lord Richardson: I shall answer the question put to me by the noble Lord, Lord Hatch. The answer is that the words proposed would not constitute any barrier to the proper practice of medicine. Those words are such that they should be carefully considered as to whether they provide a clear enough substitute for "custom and ritual". That is what the noble Lord, Lord Hatch, is asking should be done.
Baroness Masham of Ilton: I asked the legal adviser from the DHSS about this amendment, as I did about all the amendments. I was told that "non-medical factors" was too vague and gave rise, or could give rise, to a loophole.
Lord Hatch of Lusby: Can the noble Baroness tell us what loophole? The noble Lord, Lord Richardson, has said that it is not a medical loophole. What is the loophole? Will the noble Baroness find out?
Baroness Masham of Ilton: Maybe the noble Baroness, Lady Trumpington, can say which loopholes; but it was loopholes.
Lord Ponsonby of Shulbrede: It is your Bill, not the Government's.
Baroness Masham of Ilton: One does not know which loopholes until the loopholes happen.
Lord Kennet: While news of the nature of the loophole is being brought to the noble Baroness may I urge the Committee not automatically to continue deferring to the unjustified opinions—I use the word "unjustified" in the strict sense—which are not accompanied by detailed justification of the legal adviser to a Government department. This is the strangest basis for legislation that I have ever heard. Somebody has a bright idea—in this case my noble friend Lord Hatch—and the sponsor of the Bill goes—who does she go to?: to the legal adviser to the Government department. But has it not been clear for months that the view of the department is now set in concrete and nothing—not the Bench of Bishops, not the good-hearted ingenuity of doctors or anybody else—can shake it? Let us make up our own minds for once. I think that the "non-medical factors", in view of what the noble Lord, Lord Richardson, has said about it, is a good plan. Let us ask the Government if they will soften for a moment and consider the possibility that somebody else might have an idea.
Lord Coleraine: I should like to suggest that the sort of non-medical factor that the noble Lord, Lord Hatch, would exclude from the consideration of the doctors is something as simple as abnormality; because if someone is becoming depressed from mere abnormality, that is surely a non-medical factor. Is that the sort of factor that he wishes to stand in the way of the operation?
Lord Richardson: If there is an abnormality which is a significant abnormality in the assessment of a case, it should be dealt with medically.
Baroness Trumpington: Once again I have been challenged. The last time I spoke I said that the noble Lord, Lord Richardson, with great authority and medical knowledge, answered various questions far better than I. That is the only mention I made of the noble Lord, Lord Richardson, and I was most interested to hear his remarks.
I can well understand the purpose of this amendment, to avoid the need to use the term "custom or ritual", but I have to say that it does not work and it would be unacceptable to the Government. If this amendment were carried, we would be introducing a loophole that would allow the practice of female circumcision as such. The term "non-medical factors" is insufficiently explicit to prevent that loophole.
Certainly, female circumcision is non-medical, since it has nothing whatsoever to do with a patient's health. In the same way someone's custom or ritual is a non-medical factor; yet this amendment, by not being explicit, would still allow a doctor to make the

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claim that he has carried out a female circumcision and that if he had not done so, there would have been psychological distress. It is doubtful whether there could ever be a successful prosecution if that defence is available.
I understand the feelings that have been expressed about the words "custom or ritual". I believe the fears about them to be misplaced. However, over the years we have examined many different formulations and it must be clear now that the Bill in its present form is the only one that has yet appeared that meets all our criteria. This amendment would allow female circumcision to be performed. That goes against all our intent. I must ask noble Lords to reject this amendment.
Baroness Masham of Ilton: I sent to the noble Lord, Lord Hatch, the letter which I received from the president of the Royal College of Obstetricians and Gynaecologists, and they say quite clearly that they want to have the words "custom or ritual". They say:
"the words 'custom or ritual' are necessary. Other forms of words may result in the banning of perfectly legitimate surgical procedures and this would not be acceptable to the College. Indeed, a former Bill appeared to ban 19 legitimate surgical procedures and my predecessor, Sir Rustam Feroze, made this point to the sponsor".
That was in another place. Also the Medical Women's Federation have clearly stated that they are happy with the Bill as it now stands.
Lord Hatch of Lusby: Yes; but last time not just on this side but on all sides there were quoted other authorities to the opposite effect. May I ask the noble Baroness, in view of the advice that we have been given by the noble Lord, Lord Richardson, tonight, whether she will take the words "non-medical factors" back to the College of Obstetricians and Gynaecologists? Will she quote the noble Lord, Lord Richardson, and ask whether this phraseology or something similar would not be acceptable to them? I ask that because we have had it on the authority of the noble Lord, Lord Richardson, that this phrase would not prevent the legitimate operations which they and he are anxious shall be preserved.
Lord Kennet: We enter here the realm which is verging on inadvertent misleading of the Committee. The letter that has been quoted from Sir Rustam Feroze, the former president of the College of Obstetricians and Gynaecologists, was to the sponsor of an earlier Bill. That sponsor was me. I received the letter from Sir Rustam Feroze; I remember it quite well. The letter as quoted stated that the earlier Bill would have made impossible 19 well-known types of surgical procedure. This was a mistake by Sir Rustam Feroze. He was basing his view of the Bill not on its text but on a press report of what it might be likely to contain. I pointed out this mistake to him, and I very much regret that this should surface again this evening. The letter was wrong. Moreover, I think the letter bore no relevance whatever to the amendment before the Committee.
10.30 p.m.
Baroness Masham of Ilton: I can certainly take it back to the Royal College of Obstetricians and
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Gynaecologists, but I have the letter here and the noble Lord, Lord Hatch, has the letter here. I do not think they are going to change their mind. I cannot argue with the noble Lord, Lord Richardson, who is an eminent doctor.
Lord Hatch of Lusby: In view of the statement just made by the noble Lord, Lord Kennet, and in view of the fact that the Royal College of Obstetricians and Gynaecologists was not aware of this amendment because it had not been tabled at that time, I really find it difficult to accept that a college of that distinction would say that there are three words in the English language, "custom or ritual", which are the only words that can be used in this Bill as protection. I should like to accept the assurance of the noble Baroness that between now and Report stage she will question them, quoting the judgment of the noble Lord, Lord Richardson, on this particular amendment. As she has given me that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McNair Lord McNair moved Amendment No. 7:
[Printed 3/6/85; col. 574.]
The noble Lord said: I think I can be quick about this one. First, I have to plead guilty to plagiarism. The words in my amendment are not mine, as I expect all noble Lords have spotted. I lifted them direct from the letter from Mr McNaughton which was read out by the noble Baroness, Lady Masham, at Second Reading, in col. 1244.
I think there are two arguments in favour of this amendment. The first—and, to me, it is the less important argument—is that I hope, just as the noble Lord, Lord Hatch, hoped in the case of the last amendment, that these words may be found less offensive in those circles where they might be found offensive. I must admit I am not all that impressed by this talk of seething discontent, especially among the victims we are seeking to protect. I doubt whether they are worried about the wording of our Bill. The children aged eight are those that I am chiefly thinking about. But if there is this discontent, then I hope that these words will mitigate it and be found less offensive than the notorious words "required as a matter of custom or ritual".
The second and I think more important reason why I would commend this amendment to your Lordships' Committee is that these words are, in fact, more accurate. They say more nearly what I think we are trying to say, especially in that they get rid of the word "ritual". The noble Baroness, Lady Trumpington, threw the Concise Oxford Dictionary at my neighbour, the right reverend Prelate the Bishop of Gloucester. I should like to come to his aid with another authority, Roget's Thesaurus, which is sometimes helpful on these occasions when one is looking for the right word. If you look in the 1966 Penguin edition of Roget under what he calls Head No. 988, you will find that every single word associated with "ritual" has some religious or quasi-religious connotation. Female circumcision has none; so I think the word "ritual" should be avoided if possible.
I am suggesting, or at least Mr. McNaughton has suggested, "for traditional or cultural reasons". However, I am open to suggestions. It may be that the word "cultural" is a little too vague or too wide. Possibly
"for reasons of custom or tradition"
would be better. I do not know, and I wait to hear what others have to say before I decide what my future course of action ought to be. I beg to move.
Baroness Masham of Ilion: If the right reverend Prelate is not going to speak—because I thought he wanted this opportunity but it may be that he has already said what he wanted to say about it—I should like to say that "cultural" would not be acceptable because it is too wide. I personally have sympathy for the word "traditional"; and because I know the noble Lord, Lord McNair, wants to do the very best for this Bill and in no way does he want to damage it, perhaps (although I cannot promise anything, and I believe the noble Baroness, Lady Trumpington, would say the same) this aspect could be taken back and looked at.
Lord McNair: In view of that, I think the simplest reply for me to give is that I shall ask leave to withdraw the Amendment and then bring it back at Report stage. I hope by that time we shall have had further conversations. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.
House adjourned at twenty-two minutes before eleven o'clock.