Lords Sitting of 26 March 1987

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.

Arms Control Meetings and NATO
Lord Molloy: 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 will try to ensure that a representative of NATO attends meetings between the Foreign Secretaries of the USA and the USSR on arms control.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, no.
Lord Molloy: My Lords, I am bound to say that from a Conservative Government, and on the greatest issue facing mankind, that is a short, abrupt and not particularly helpful Answer. Is not the noble Baroness aware, in so far as it was a British Government who created NATO, that only last week Mr. Gorbachev said that he would welcome discussions not only between his country and USA but with representatives of NATO and the Warsaw Pact? As Great Britain is the senior member of the European side of the NATO arrangement, would it not be right for our Government to see that Britain has a voice as well on this, the greatest issue of our day?
Baroness Young: My Lords, the fact is that a bilateral meeting is a bilateral meeting; and the meeting is between representatives of the USA and the USSR. The North Atlantic Treaty Organisation provides the means by which the United States and its allies can hold regular consultations on arms control and other matters.
Lord Molloy: My Lords, is the noble Baroness aware that there is nothing bilateral about the possibility of a nuclear war?
Baroness Young: My Lords, this is too important a matter to make jokes about. I am not making jokes; I am setting out the position as it is.
Lord Jenkins of Putney: My Lords, does not the noble Baroness agree that the Question is about arms control? Is she aware that there has been no arms control but only talk about arms control? Does not the noble Baroness recall that the noble and gallant Lord, Lord Bramall, reminded us yesterday that there are 45,000 nuclear weapons situated throughout the world doing a job which could be done by 45? Will the noble Baroness consider arms reduction instead of arms control?
Baroness Young: My Lords, if the noble Lord had listened to my two speeches yesterday afternoon in the
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important debate introduced by my noble friend Lord Home, he would know that I said that for the first-time we are actually talking about reductions in arms.
Lord Cledwyn of Penrhos: My Lords, the Soviet Defence Ministry spokesman is reported as saying that if agreement on medium and short range weapons is achieved,
"independent defence capabilities will have to join in as well."
Can the noble Baroness say what the reaction of Her Majesty's Government is to that?
Baroness Young: My Lords, it is a little difficult to comment on a report which I have not seen for myself, but we have welcomed the statement of Mr. Gorbachev in introducing again the idea of the zero option and made the point that he was not including the independent nuclear deterrent of Great Britain and France.
Lord Mellish: My Lords, is it not a fact that it can only be good for the governments of America and of Russia to be talking, even if only about arms control? The less we say, so that they can get on with reaching an agreement, the better.
Baroness Young: My Lords, I agree with the noble Lord.
Lord Gladwyn: My Lords, does not the noble Baroness agree that a representative of NATO presumably could only be the noble Lord, Lord Carrington? Would it not put the noble Lord, Lord Carrington, in an impossible position if he attended these meetings in the absence of any complete unanimity on arms control by any representative of NATO?
Baroness Young: My Lords, I would not wish in any sense to speak for my noble friend Lord Carrington. Suffice it to say that the consultations that take place do so within NATO. The discussions on arms control take place between representatives of the United States and the Soviet Union.
Lord Chalfont: My Lords, does not the noble Baroness agree that NATO, as a military defence alliance, is a most inappropriate body to be represented at arms control and disarmament discussions? Does not she further agree that if it were represented there would also be representation from the Warsaw Pact? As the Warsaw Pact would be representing the Russian point of view, would not this be somewhat unbalanced?
Baroness Young: My Lords, the noble Lord makes two very good points.
Lord Molloy: My Lords, does not the noble Baroness agree that we must not keep to the strategies which have produced nothing over the past 20 years? With the new attitude of the Soviet Union, there is now a possibility of a breakthrough. Does she not agree that Britain, with its great experience, can encourage that and make a worthwhile contribution to discussions on defence, as I indicated in my Question?
Baroness Young: My Lords, as I made quite plain in yesterday afternoon's debate, we now have a new situation in which we are actually talking about a possible reduction in armaments. Our contribution is through the influence which we bring to bear on the Americans, who are party to these negotiations. We shall make our influence felt wherever it is possible to do that.
Lord Nugent of Guildford: My Lords, as my right honourable friend the Prime Minister is about to go to Moscow to talk to Mr. Gorbachev, is not that the best possible answer that the noble Lord, Lord Molloy, could have to his Question?
Baroness Young: Yes, my Lords. My noble friend makes a good point.

Health Education Council
3.15 p.m.
Lord Ennals: 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 how they justify the abolition of the Health Education Council and the Joint Advisory Committee on Nutrition Education (JACNE).
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, the situation is that the Health Education Council is being reconstituted as a special health authority. We have felt for some time that health promotion ought to be an integral part of the National Health Service, and that the main agency for health education in this country should be a body within the service with a clear statutory basis. The change recognises that. The Joint Advisory Committee on Nutrition Education, like all the other advisory committees and groups that the Health Education Council set up, will automatically cease to exist when the council comes to an end on 31st March.
Lord Ennals: My Lords, I am grateful to the Minister for that reply. Is she aware that almost 20 years ago I was involved in the appointment of the noble Baroness, Lady Birk, as the first chairman of the independent Health Education Council, which was free to comment on government policy concerning health education? Can the Minister say why this independence is now being destroyed and the Health Education Council replaced by a body which is "directly accountable to the Secretary of State"? Why did the Government intervene—if they did intervene—on Thursday to stop the publication of a major report by Sir Douglas Black, who is one of our most distinguished physicians? Does the noble Baroness agree that this interference is quite intolerable?
Baroness Trumpington: My Lords, perhaps I may first answer the second part of the noble Lord's question. The Government did not stop publication. If your Lordships are agreeable, I do not wish to go into
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that because I understand that there is a Question on the subject from the noble Lord, Lord Stallard, tabled for next Monday. With regard to the first part of the question, your Lordships will be aware that the problem of AIDS has given a new dimension to the role of health education. My right honourable friend feels that the time is right to recognise that change by establishing a central body on a statutory basis as an integral part of the NHS. Perhaps it would not be very gallant of me if I did not pay tribute to the work that has been done in the past by the noble Baroness, Lady Birk.
Lord Kilmarnock: My Lords, does the Minister agree that the justification sought by the noble Lord, Lord Ennals, is to give the new authority more money and special responsibility for AIDS prevention and education? While we on these Benches support that aim, can we have an assurance from the noble Baroness that this will not inhibit its independence and ability to make recommendations in other spheres, as has been the case heretofore?
Baroness Trumpington: My Lords, the role of the HEC has always been essentially to assist Ministers in promoting health education in line with government policies and priorities. One of the ways in which it does that is by offering its advice and views on government policies that bear on health. We do not see the reconstitution of the council as making a fundamental difference to those relationships.
Lord Orr-Ewing: My Lords, can my noble friend say whether it is unusual for a public body of that kind to draw up a report and then call a press conference before it has even been considered or read by members of the council? Is that not rather unique?
Baroness Trumpington: My Lords, my noble friend's question falls, alas, rather wide of the Question on the Order Paper. He will have an opportunity to put it again when the Question tabled by the noble Lord, Lord Stallard, is debated on Monday.
Baroness Birk: My Lords, perhaps I may first thank the Minister for her kind remarks. Is she aware that, although I was appointed by a Labour Secretary of State, my term as chairman was extended by a Conservative Secretary of State and that both of them recognised the great advantage of being advised by an independent body, even if sometimes it was uncomfortable for them? Such a body can run campaigns of considerable impact, such as the "Pregnant Man" poster of 18 years ago, which understandably a government department would not be able to do. The same applies to the AIDS campaigns today. Can the Minister tell me whether the new authority will have the freedom to commission and publish research on controversial subjects irrespective of whether they are, in Sir Brian Bailey's words, "political dynamite"? Will it also be able to initiate controversial publicity campaigns without feeling a heavy departmental hand on its shoulder?
Baroness Trumpington: My Lords, the new authority will be expected to provide advice to my right honourable friend on matters that are within its

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remit for health education, and doubtless that advice will sometimes be critical. The chairman of the new body will be actively participating in regular meetings that regional chairmen have with Ministers and will be in a position to influence the formulation of health services policies.
Lord Ennals: My Lords, I am reassured by something that I understood the Minister to have said, but did she actually mean that the new authority will be independent and able to speak its mind regardless of the views of the Secretary of State? Is my understanding correct that the term "directly accountable to the Secretary of State" gives it the freedom to have a mind and a voice of its own?
Baroness Trumpington: My Lords, I can only repeat what I have just said, which is that the new authority will be expected to provide advice to my right honourable friend on matters within its remit.

Merseyside Restart Programme Report
3.19 p.m.
Lord Hatch of Lusby: 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 have studied the survey of the Merseyside Trade Union Unemployed Centre and what conclusions they have drawn from it.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, we have seen a report from this organisation about the Restart programme in Merseyside. It gives a totally misleading impression of the aims and effects of the Restart programme.
Lord Hatch of Lusby: My Lords, if the noble Lord has seen the report, does he recall the allegation in it that on Merseyside 10 times as many people have had benefits stopped as were found work during the first half of the scheme which ends this month? I believe that this is a wild exaggeration—
Noble Lords: Question!
Lord Hatch of Lusby: —but can the noble Lord tell us whether it is the case that more people on this Merseyside scheme have had benefits stopped than have been placed in full-time employment under an employer?
Lord Young of Graffham: My Lords, I am rather surprised that the noble Lord should bring to the attention of your Lordships' House a report of this nature which among other things alleges that a few weeks ago when I introduced a six-month Restart programme, I introduced a work-for-benefit scheme. The report contains figures which are misleading; the total impression is misleading. If the noble Lord wishes to ask me how many people go into employment as a result of Restart, he may put down a Question. Restart, as a programme, has now been accepted even by noble Lords opposite, or at least by
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their party. It is doing a great deal to reverse the direction of long-term unemployment, and I, for one, regret that the noble Lord should bring documents of this nature to your Lordships' House.
Lord Hatch of Lusby: My Lords, will the noble Lord answer my question? Is it the case that more people on Merseyside have had benefits stopped during the first half of the scheme ending this month than have been placed in full-time employment under an employer?
Lord Young of Graffham: My Lords, perhaps I may remind all in your Lordships' House that no one in this country has his benefit stopped unless his circumstances are such that he is not entitled to claim benefit in the first place. There are many cases where people are claiming the wrong benefits and are entitled to sickness or disability benefits. Those people are steered on to the right sort of benefits. Restart is not an employment programme. It is a programme which acts as a gateway to the many programmes and help provided by my department. We never publish employment figures out of Restart. I am quite content to look at the national figures for the long-term unemployed and let those decide.
Lord McCarthy: My Lords, will the noble Lord try to answer the question? Is it a fact that more people were taken off the register than were given jobs; not unlawfully or wrongfully taken off the register, but taken off the register in Merseyside? Can he answer that? Does he also want to say that a positive answer will he given to the letter he received earlier this week from the general secretary of the Trades Union Congress asking for an objective, independent study into Restart and other employment creation programmes?
Lord Young of Graffham: My Lords, the noble Lord strays very widely from the point. Perhaps I may say that 1,249 people have been disallowed for failure to attend within Merseyside out of the 74,598 people who were interviewed up to 12th February. Those who go into jobs are not included in the statistics for this programme. I am quite happy to look at the figures for employment as a whole.
I have received two letters from the general secretary of the Trades Union Congress. If I may paraphrase the first letter slightly, it says that young people should receive benefit if they decide that they do not want to go on to YTS. The other asks a series of questions about the Government's statistical service. I am looking carefully at that letter. I shall reply to the general secretary of the Trades Union Congress as soon as I have studied the contents. It is an allegation about the Government's statisticalservice. It is not directed at myself or any other Minister.
Lord Stallard: My Lords, is the noble Lord aware that this survey is also reported as saying that the Restart scheme is a way to fiddle the jobless figures? Does he accept that the sentiment has been expressed not only about the Restart scheme but about the other 19 changes that have taken place under the present Government in the method of compiling the statistics? Is he aware that because of the widespread view about these changes, which all resulted in a reduction in the

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numbers, his replies to any questions on employment have been rendered almost totally incredible?
Lord Young of Graffham: My Lords, I am aware that it has caused a certain amount of dismay to noble Lords opposite that for the past seven months the unemployment figures have been going down, as has unemployment. I am also aware of the 19 changes which it is alleged have occurred, although even with the greatest work the unemployment unit counts it as 16. Some of the changes, as I reminded all in your Lordships' House during the debate on it, included items such as the strike in the Newcastle office in 1980 when statisticians reduced unemployment by 20,000. When the strike ended they made an adjustment and put that number back. There have been three major changes in the unemployment count, and not one has taken place since the figures changed direction last July. Unemployment is going down in this country. It will continue to go down despite the great dismay and disappointment of those opposite.
Lord Hatch of Lusby: My Lords, the report says that £94 million is to he spent on the Restart programme nationally this year. Is that figure correct? If it is correct and if it is divided by the number of people who have been placed in full-time employment, how much is it costing to create a real job for each worker placed in full-time employment?
Lord Young of Graffham: My Lords, I do not know how many times I have to repeat to the noble Lord, Lord Hatch of Lusby, that this is not an employment programme. You may as well divide the cost of Restart by the number of people who eat chocolate sundaes, because that has no relevance to it at all. I shall just remind noble Lords of two simple facts. Only since we started the Restart programme has long-term unemployment started to go down. Only since we started the Restart programme have we discovered that one in four of the long-term unemployed is illiterate. Only since we started the Restart programme have we been in the position to say that we have now met and helped all of the long-term unemployed in this country. I stand very proud of the Government's programme of work which is now the envy of other countries with high unemployment. We have seen the results so far. We shall continue to see the results as this Government will continue with Restart.
Lord McCarthy: My Lords, is it not unfair to say that noble Lords on this side—
Noble Lords: Order!
Baroness Seear: My Lords, does the Secretary of State agree that the main criticism of Restart is not that it is now doing the job it is but that it was not begun a very long time ago? Is it not extraordinary that the long-term unemployed were left without this kind of contact for so many months?
Lord Young of Graffham: My Lords, I am grateful to be criticised on that score, considering how I was criticised on the day I stood in your Lordships' House to introduce the programme. At least the House
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should give us credit for conceiving the idea of Restart and introducing it. Long-term unemployment is 61 per cent. of the total unemployed in Belgium. It is high in every other country in Europe. The idea has not been thought of there, and those countries are now watching what we are doing and copying it.
Lord McCarthy: My Lords, is it not the case that the answer to the last question of the noble Lord, Lord Hatch, is £ I 8,000 a job?
Lord Young of Graffham: My Lords, it is absolutely true to say that that is the figure mentioned in this pamphlet. It is totally untrue to say that that is the cost per job as a result of Restart. Restart is not an employment programme and perhaps I may explain why. We interview people. We put people into job clubs. We never count the two-thirds of people who go into employment from job clubs. We put people on training programmes. We never count the people who go into employment on training programmes. We put 70,000, 80,000, 90,000 people a year on to the community programme. We never count those who go into jobs out of that programme.
Why do we do this? Because Restart is about remotivating people who have lost their enthusiasm from being out of work. It is about getting them into schemes. It would be an unprofitable road down which to travel to try to say that Restart has a cost per job. It clearly does not. It was not designed for that, and I am quite happy to be judged by all the other programmes of my department.

Pensioners: Growth of Income
3.29
Lord Gridley: 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 how much pensioners' total average net income has grown since 1979.
Baroness Trumpington: MyLords, pensioners' total average net income grew in real terms by almost 18 per cent. between 1979 and 1985, the latest date for which figures are available.
Lord Gridley: My Lords, while I thank my noble friend for that Answer, may I ask her how the growth in pensions compares with the incomes enjoyed by the population as whole?
Baroness Trumpington: My Lords, between 1979 and 1985 pensioners' total average net incomes grew more than twice as fast as the incomes of the population as a whole and about four and a half times as fast as they did during the period 1974 to 1979. At 1985 prices pensioners' incomes were £83·10 a week in 1985, an increase of £12·50 over the 1979 figure. These figures are averages for pensioner tax units which may be single pensioners or married couples. The average net income of pensioner couples in 1985 was £115·30.
Lord Renton: My Lords, can my noble friend say whether the figures that she has been giving take account of the very considerable increase in occupational pensions which people who have retired have received in recent years?
Baroness Trumpington: My Lords, in answer to my noble friend, the figures show that pensioners generally do not have just the basic pension. Seventy per cent. have income from savings; over half have occupational pensions; 6·5 million have graduated pensions. However, for those who have only the basic pension, or little more, help is available through supplementary benefit and the housing benefit. The overall picture is one of steady improvement in pensioners' incomes at all levels.
Baroness Jeger: My Lords, can the Minister say whether in calculating the net income the Government are relating the figures to the retail price index or to the pensioners' index? Is it not a fact that the retail price index does not include housing? Since 1983 over half a million pensioners have lost housing benefit. Under the new regulations, from next month over 2½ million pensioners will lose housing benefit, in addition to being forced to pay 20 per cent. of rates out of supplementary benefit. In view of these facts there is no room for complacency about these figures.
Baroness Trumpington: My Lords, we are never complacent. The figures that I quoted come from the family expenditure survey, a well respected survey on household incomes.
Lord Banks: My Lords, will the noble Baroness say how the Government intend to ensure that state pensions do not decline in the future as a percentage of national average earnings, in view of the Government's own assumption that earnings will rise faster than prices?
Baroness Trumpington: My Lords, as the figures show, pensions will continue to be protected against inflation. The changes made to SERPS will not affect anyone retiring this century. The modification of the scheme was necessary if future generations were not to face a SERPS cost of some £28 billion extra by the year 2033. The changes introduced in the 1986 Social Security Act will make it easier for people to build up occupational or personal pensions in line with the Government's policy of extending flexibility and improving individual choice in pension provision.
Lord Renton: My Lords, in addition to the improvements which my noble friend has already mentioned, is it not a fact that pensioners will benefit further from the reduction in the standard rate of tax and in the improvement in the allowances?
Baroness Trumpington: My Lords, in answer to my noble friend Lord Renton, pensioners will benefit from the general improvement of the economy. Those pensioners who pay tax—only about a third of elderly households—benefit from the reduced basic rate of tax, like anyone else. However, two measures in the Budget were aimed specifically at helping pensioners: the increase in the age allowance and the introduction
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of a new, higher rate of age allowance for people aged 80 or over.
Lord Hatch of Lusby: My Lords, can the noble Baroness tell the House what difference there would have been in the present pension if this Government had not delinked that pension from the average wage in the country? What would the difference in the figures that she has given have been if the criteria of 1979 had continued to be followed instead of being abandoned by this Government?
Baroness Trumpington: My Lords, if the noble Lord is referring to paying pensions of half average earnings for a married couple and a third for single people, the cost of increases in basic pensions to half average earnings for a married couple and a third for a single pensioner would be very high—£13.5 billion extra. Even increases to £86 and £57, as the national pensioners' convention demands, would cost £9 billion. But in fact when pensioners' total incomes are taken into account these targets are already passed. It is quite misleading to think of the basic pension as the only source of a pensioner's income when in fact it accounts for only about half of it.

Abolition of Domestic Rates Etc. (Scotland) Bill
3.35 p.m.
The Minister of State, Scottish Office (Lord Glenarthur): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Abolition of Domestic Rates Etc. (Scotland) Bill has been committed that they consider the Bill in the following order—

Clauses 1 and 2,

Schedule 1,

Clauses 3 to 21,

Schedule 2,

Clause 22,

Schedule 3,

Clause 23,

Schedule 4,

Clauses 24 and 25,

Schedule 5,

Clauses 26 to 31,

Schedule 6,

Clause 32.—(Lord Glenurthur.)

Lord Ross of Marnock: My Lords, while not disagreeing with the Motion of the noble Lord, I should like to ask him whether he will help the House. On avidly reading this Bill noble Lords will be aware that there is rather eccentric numbering of the lines of two pages. Will he give some guidance to the House so that our proceedings will be a little more comprehensible than they might otherwise be?
Lord Glenarthur: My Lords, I am aware of that point. I do not think that the Bill can be reprinted before the Committee stage. Nevertheless, when it comes to the consideration of the amendments I shall

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ensure that there is no doubt about which particular line on which particular page the appropriate amendments belong to.
Lord Ross of Marnock: My Lords, it is very difficult for people who are trying to put down amendments on this Bill. It is not good enough to say that it cannot be done before the Committee stage. It cannot be done at all. If the Minister consults the Public Bill Office—as I did—he will discover that the computer cannot cope with this kind of thing.
Lord Glenarthur: My Lords, I do not think that I can deal with this from this Box but I shall certainly look into the point that the noble Lord makes to see whether there is any way that the matter can be dealt with. I shall do my best to achieve that immediately.
On Question, Motion agreed to.

Housing (Scotland) Bill [H.L.]
3.38 p.m.
The Earl of Dundee: My Lords, I beg to move, on behalf of my noble and learned friend the Lord Advocate, that this Bill be now read a second time.
This is a consolidation measure which incorporates amendments to give effect to recommendations of the Scottish Law Commission. It consolidates certain enactments relating to housing in Scotland, and, apart from the amendments which are intended to remove certain minor anomalies in existing law, the Bill makes no change in the existing law. If your Lordships approve, the Bill will be referred to the Joint Committee on Consolidation Bills which will consider it and make its report to the House in due course. I beg to move.
Moved, That the Bill be now read a second time.—(The Earl of Dundee.)
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Animals (Scotland) Bill [H.L.]
3.39 p.m.
The Earl of Selkirk: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(The Earl of Selkirk.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
[References are to [Bill 73] as first printed for the Commons.]
1 Clause 1, page 1, line 16, leave out 'A' and insert:

'In this section'.

2Page 1. line 17, leave out 'in paragraph (b) of subsection (1) above'.
3Page 2. line 3, leave out 'both in that paragraph and in the definition of "species" contained in paragraph (a) above,'.
4Clause 2, page 3, line 10, leave out '(i)'.
5Page 3, line 15, leave out '(as the case may be)'.
6Page 3. line 17, at end insert '(as in the case may be)'.
7Clause 4, page 4, line 23, leave out 'implied' and insert 'impliedly'.
8Page 4, line 25, after 'owner', insert 'or occupier'.
9Page 5, line 4, leave out 'animal' and insert 'animals'.
10 Clause 5, page 5, line 16, leave out first 'other'.
11 Page 5, line 19, leave out 'the' and insert 'an'.
12 Page 5, line 21, leave out 'the' and insert 'its'.
13 In the Schedule, page 7, line 11, column 3, at end insert 'except as it has effect for the purposes of section 74 of that Act.'.
The Earl of Selkirk: My Lords, the 13 amendments to the Animals (Scotland) Bill are all drafting amendments. One, I regret to say, is a grammatical amendment. They have the approval of the Scottish Law Commission. If it is the will of the House I shall move all 13 amendments in one Motion. I have, however, one typographical amendment in Amendment No. 2. The reference should be "in paragraph (b)" and not "in paragraph (6)" as appears on the Marshalled List. With that alteration, I beg to move Amendments Nos. 1 to 13 en bloc if that is the will of the House.
Moved, That this House do agree with the Commons in the said amendments.—(The Earl of Selkirk.)
Lord Ferrier: My Lords, I am not quite clear about Amendment No. 4. Does not that amendment contain a typographical error: "leave out (i)"? It then carries on with (ii).
The Earl of Selkirk: My Lords, if it is merely a typographical error, it will be corrected in the ordinary course. I regret to say that if there is such an error I have not noticed it.
On Question, Motion agreed to.

International Headquarters and Defence Organisations (Designation and Privileges) (Amendment) Order 1987
3.43 p.m.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, I beg to move, That the draft International Headquarters and Defence Organisations (Designation and Privileges) (Amendment) Order 1987, a draft of which was laid before this House on 12th March, be approved.
It may also be convenient if I were to speak at the same time to the Visiting Forces and International Headquarters (Application of Law) (Amendment) Order 1987 because these two draft orders are complementary.
Headquarters United Kingdom Air was first established as a NATO major subordinate command in 1975 and since then has been manned by personnel from Headquarters Royal Air Force Strike Command. It has now been decided to bring this Headquarters into line with other major subordinate commands by establishing a small international staff to integrate the command more closely with NATO, which has agreed to provide funding for the measure. We are also taking the opportunity to designate the Commander Submarines Eastern Atlantic as an international headquarters following the granting of international

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status by the NATO Defence Planning Council in 1982.
The International Headquarters and Defence Organisations (Designation and Privileges) Order 1965 designated the headquarters for the three major NATO headquarters and three subordinate NATO commanders, and also the NATO Channel Committee at Northwood, and conferred on them such capacities, immunities and privileges as are needed to achieve their efficient organisation and operation. The effect of the first draft order is to add Headquarters United Kingdom Air and the Commander Submarines Eastern Atlantic to the list of subordinate headquarters covered by the 1965 order.
The second draft order similarly amends the Visiting Forces and International Headquarters (Application of Law) Order 1965. This order was made under Section 8 of the Visiting Forces Act 1952 which provides for the application to visiting forces of law relating to home forces. My Lords, I beg to move.
Moved, That the draft order laid before the House on 12th March be approved.—[15th Report from the Joint Committee.]—[Lord Trefgarne.]
Lord Graham of Edmonton: My Lords, all that we on this side of the House wish to say is that it seems to be a very sensible arrangement.
On Question, Motion agreed to.

Visiting Forces and International Headquarters (Application of Law) (Amendment) Order 1987
Lord Trefgarne: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 12th March be approved. [151h Report from the Joint Committee.]—(Lord Trefgarne.)
On Question, Motion agreed to.

Plugs and Sockets Etc. (Safety) Regulations 1987
3.46 p.m.
Lord Trefgarne: My Lords, on behalf of my noble friend Lord Lucas of Chilworth, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the draft regulations laid before the House on 25th February be approved. [13th Report from the Joint Committee.]—(Lord Trefgarne.)
Lord Williams of Elvel: My Lords, I am sorry that the noble Lord, Lord Lucas of Chilworth, is not here to move his Motion. Nevertheless, on behalf of the Opposition perhaps I may speak to the regulations and hope that he will be present in the Chamber to answer the points that I raise.
The regulations are made under the Consumer Safety Act and refer to plugs and sockets. They contain a number of measures which, although they have been through the normal processes of consultation as
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indicated by the regulations, raise one or two problems for your Lordships to consider.
As I understand the matter, the Consumer Protection Bill, which recently passed through your Lordships' House and is going to another place, will replace the Act under which these regulations are made. My first question to the noble Lord is whether the regulations will be continued if the Consumer Protection Bill is enacted, as we hope it will be, or whether a new series of regulations will be issued under Part II of the Consumer Protection Bill, as it now stands, dealing with the general safety requirement which we debated on a number of occasions in your Lordships' House.
Secondly, I should like to ask the noble Lord how far the Government and the European Community have proceeded with standardisation of plugs and sockets and electrical fittings generally throughout the Community. As many noble Lords will know, it is extremely irritating to go from one country in the Community to another and to have to carry what is known and described in the regulations as a "travel adaptor". In other words, it would make sense that at some reasonably early stage the European Community should decide on standard fittings which would be applicable throughout the Community. That would avoid the difficulty, particularly for business travellers, of arriving in Brussels, Paris or Frankfurt and finding that the electric razor does not fit into the socket provided in the hotel.
My third question, which embraces a number of questions, concerns the text of the regulations before your Lordships. First, regulation 5(1), referring to standard plugs, reads:
"Subject to the following provisions of this regulation, a standard plug shall be a kind approved by a specified person.".
The specified person is defined in Schedule 2 of the regulations and includes the Secretary of State. In other words, if the regulation is agreed to, the Secretary of State can approve a standard plug which is different from the kind described in previous regulations and in these regulations. Will the noble Lord confirm that here we are dealing with some kind of enabling provision which will allow the Secretary of State to decide at some time that the standard plug should be changed? That is what I understand the regulation to mean.
Turning to regulation 3(3) referring to electrical devices to which the regulations apply, it reads:
"In the case of a plug or socket inside or forming an integral part of electrical equipment and required to conform to a British Standard referred to in Schedule 3 to these Regulations, the Regulations only apply to the extent that it is practicable to do so".
I should be grateful if the noble Lord will offer some comment to your Lordships on the meaning of the expression,
"that it is practicable to do so".
Can anyone who decides that he will not conform to this regulation plead impracticability and what are the criteria which will be adopted to make that judgment?
Turning to Regulation 9 dealing with information requirements, paragraph (6) states:
"It shall not be a sufficient compliance with this regulation to give information in a language other than English".

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Is it not also proper that information should be given not only in English, but in languages which may be necessary for those citizens of the United Kingdom who are not wholly familiar with English and indeed the parliamentary English—if I may put it like that—in which the regulations are couched?
I speak not only for the Welsh language, but also for languages used by ethnic minorities to whom these regulations will be of very great importance. It seems to me important to have it clear and explicit in the regulations somewhere that information shall be given in language and languages that are understood by all citizens. It would be a great mistake if instructions are given in English when, for example, the Pakistani community would only understand instructions in Urdu. That is a serious point and I hope that the noble Lord will answer it.
Schedule 1 paragraph 4 introduces us to a new expression, that is the "Europlug". "Europlug" itself is a pretty odd expression. Those of us who are accustomed to speaking in plain English have some difficulty in understanding exactly whether or not the "Europlug" will appear in future in the Oxford English Dictionary. Nevertheless, a "Europlug" is exempt from these regulations because it is an excepted electrical device, provided that it:
"is marked with or accompanied by a warning that it is not suitable for use in a UK mains socket".
Again I come hack to the question of language, and whether the instruction which will be provided alongside the "Europlug" will be clearly comprehensible to all citizens of the United Kingdom.
Paragraph 6 of Schedule 1 refers to a "travel adaptor". Those of your Lordships who travel abroad will be familiar with the kind of adaptor that we all have to carry in order to make sure that the appliances that we have in our luggage can be plugged into any socket almost anywhere in the world. I am a little concerned that a travel adaptor should be exempt from the present regulation. I find it odd that in the United Kingdom travel adaptors can be sold whether or not they are dangerous or potentially dangerous. I believe that that is a gap that needs at least to be explained, if not to he filled.
Those are the comments I have on the draft regulations. I hope that the noble Lord will be able to satisfy me on the points that I have raised, in which case we shall raise no objection to the regulations being approved by your Lordships.
Lord Graham of Edmonton: My Lords, I point out to the Minister that there have been many occasions on which I have expressed disappointment at a lack of consultation on matters proceeding through the House. On this occasion, I sought the views of M. K. Electric because it is the largest employer of labour in Edmonton and is very heavily involved and affected by these regulations. I was told that there had been a long period of consultation, not only with the company directly, but also with the various trade associations. The Minister is obviously looking forward very much to satisfying my noble friend. I can assure him that those at the sharp end who are directly affected by the regulations have certainly given me to understand that
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they are satisfied that their interests—the interests of the consumer and the industry—are fully protected and taken into account in the regulations. The Minister should note that and be grateful.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, I am grateful to the noble Lord. Lord Williams, for his reception of the regulations that my noble friend invited the House to approve.
I shall answer some of the questions that he has addressed. The products that are covered by the regulations are currently subject to the provisions of the Electrical Equipment (Safety) Regulations 1975 and the Electrical Equipment (Safety) (Amendment) Regulations 1976. However, because of the generality of the provisions contained within these regulations and the nature of many of the defects in the products, effective enforcement has proved to be both time consuming and expensive in relation to the cost of the products themselves. Consequently very many more defective products are reaching the hands of users than ought to be the case. We have decided therefore to introduce these new regulations which will he specific to plugs, sockets, fuses and adaptors which are in common domestic use. Our Community obligations which deal with the safety of electrical products under the low voltage directive does not include these products within its scope. It is therefore possible to present draft regulations which provide a precise and effective method of ensuring that only safe products are supplied to consumers.
The noble Lord's first question related to the Consumer Safety Bill which will shortly be before another place. These regulations will automatically be reiterated in the new Act and suppliers complying with the provisions of this legislation will have a legal defence to the provisions of the Act in respect of the general duty to supply safe goods as well as to the particular regulations.
Then the noble Lord asked me to comment on the relativity of standardisation in the Community. All I can say to the noble Lord is that international standards have made some progress, but there is no international consensus on the implementation of any changes in a number of countries throughout the world. The problem is not so much the standardisation of the plug, but more the sockets into which they fit—
Lord Williams of Elvel: My Lords, I am sorry to interrupt the noble Lord. My question related particularly to the European Community and whether there was any possibility of standardisation within the Community. I was not asking about the world-wide situation.
Lord Lucas of Chilworth: My Lords, I expanded this point so that the noble Lord, or perhaps another speaker, would not come back and ask me what would happen in the rest of the world. What I was saying about the international standardisation applies also to the Community. I said that the problem here was not the plug but the various sockets. Those would all have to be changed and that would require households throughout not only the Community but the whole

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world to change all their sockets. This is not at all practicable at this stage.
I do not take these points necessarily in the order in which the noble Lord put them to me, but he asked about Article 3 of the regulations, in particular paragraph (3). That was the case of a plug or socket forming an integral part of electrical equipment. He asked me what I meant by "practicable to do so". "Practicable" has its ordinary natural meaning, which is that if a plug or socket is incorporated within the appliance itself, as distinct from being attached to it externally, then there might very well be problems in conforming to the British standard. But there are of course the other regulations to which I have referred with regard to electrical equipment, under which the safety of the equipment as a whole would be caught.
The noble Lord also asked me about the Secretary of State approving something which is not necessarily covered by a British standard. He asked whether this was an enabling provision and in what situation I would see this happening. The situation in which I see this happening to give one example, is with what we commonly call a 13-amp power plug. Noble Lords will know that normally the back is taken off and the three wires to be connected are stripped of their covering, cut to the various lengths, one to fit in the earth which is at the top of the plug and is longer than that which fits normally on the left-hand side, which is the negative side, and the right-hand side which goes into the fuse side, the positive side. These are all different lengths.
It may well be that a manufacturer may devise a plug which requires the wires to be put into a standard block terminal so that all the wires are of the same length. There may be no British standard for that. For the British Standards Institute to issue a standard might take two or three years of testing, and then this appliance which I am describing may be approved. Rather than delay, it is thought that it is better to give approval, if appropriate, where there is no obvious danger and where the general principle conforms to an already tested piece of equipment. This is an instance of that kind where approval may be given by one of the people who are specified in the schedule.
The noble Lord also addressed himself to the information requirements, in particular Article 9, paragraph (6), where he thought that it was necessary to provide that all the languages, or certainly most of those spoken in the United Kingdom, might be included in the information to be given. Some consideration was given to this and frankly it was not thought necessary because if one then accepted this, one might end up with some 17 or 18. As noble Lords will probably recognise, normally equipment of this nature, particularly that which has an international connection or even a European connection, carries information basically in four languages: English, German, French and invariably Spanish. It is not thought necessary.
I take note of what the noble Lord says and will give some further thought to that, as indeed I shall to his comments on Schedule 1 in relation to the Europlug. Again, he asked whether I was totally satisfied that the instructions would be comprehensible to a United
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Kingdom citizen. I think that from our consultations with manufacturers and importers—and this is important—I can be satisfied that such information and instructions will be comprehensible. Already since our discussions with importers it has been noticed that changes have been made, both in the manufacture and also in the instructions where these items come from overseas; and they come from Eastern bloc countries, from China as well as from a number of other countries.
The noble Lord then addressed himself to paragraph 6 of Schedule 1 and the question of travel adaptors. Travel adaptors embodying technical requirements which are the concern of the countries in which they are connected do not necessarily meet the same requirements for safety but they may nevertheless be adequately safe when used in that country. For that reason they have been exempted.
That takes me to the intervention of the noble Lord, Lord Graham of Edmonton, for which I thank him. I confirm that consultations have covered a wide range—the complete range—of interested parties from the Health and Safety Executive and the Consumers' Association. The Department of Trade and Industry's Standing Advisory Committee on electrical products, which includes trade unions among its members, has been fully consulted. In fact, it was they who felt that regulations of this nature should be brought forward.
I understand the interest the noble Lord has in his named supplier or manufacturer. It may be of interest for noble Lords to know that some 30 million plugs are sold annually in this country and it is increasingly evident that the design, the quality and the pricing of English-made products of this nature are taking a larger share of the market.
I think I have addressed myself to all points which both noble Lords have made, and I commend the regulations to the House.
On Question, Motion agreed to.

Statistics of Trade Act 1947 (Amendment of Schedule) Order 1987
4.7 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to move, That an humble Address be presented to Her Majesty praying that the order be made in the form of the draft laid before the House on 16th March.
The noble Lord said: My Lords, I beg to move the order standing in my name on the Order Paper, which is the Statistics of Trade Act 1947 (Amendment of Schedule) Order 1987. We are proposing this amendment to the schedule to this Act of 1947 to allow the department's statistics division to conduct its annual and less frequent overseas transactions inquiries entirely on a statutory basis. At present these inquiries covering foreign direct investment are conducted on a part-statutory and part-voluntary basis.
The proposal—that is, the order before your Lordships this afternoon—comes at a time when there has been increased attention in economic circles to the value of the United Kingdom's invisible earnings. The proposed amendment to the Act is intended to improve the quality of the information on interest,

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dividends and profits, which are of course an important element of invisible transactions in the balance of payments accounts, by bringing them within the scope of the Act.
We have consulted the CBI. They accept, as I am sure your Lordships accept, the need for accurate estimates of invisibles in the balance of payments and they support the proposed amendment. It should not increase the form-filling burden; indeed, by enabling samples to be refined it should reduce the number of forms sent out. I do not believe that this measure is controversial and I ask your Lordships to give it your support.
Moved, That an humble Address be presented to Her Majesty praying that the order be made in the form of the draft laid before the House on 16th March.—(Lord Lucas of Chilworth.)
Lord Williams of Elvel: My Lords, I am most grateful to the noble Lord for introducing this draft order. It is, on the face of it, a fairly harmless looking order, but it raises a number of problems both of a general and of a particular nature. May I put the two general problems first. Your Lordships will be aware that the balance of payments statistics have caused, if I may put it at its lowest, a good deal of trouble in the last few months. Those of your Lordships who attended Question Time the other day when the noble Lord, Lord Diamond, raised the point of the revision of the 1986 outturn will be aware of what I mean.
It is on the question of invisibles, to which the noble Lord quite rightly returned, that the problem is greatest. I remember well in your Lordships' House responding to a Statement made in another place that the noble Lord was kind enough to repeat in our House when the Government—since these are government statistics—announced rather unexpectedly that the monthly surplus on invisible transactions in the balance of payments account was now valued at £900 million. This announcement was made in November.
Some of us from this side of the House were perhaps unwise enough to express a certain scepticism about that figure. Indeed, I am glad that the noble Lord, Lord Boyd-Carpenter, is in his place because he expressed the thought that I showed gloom at good news. I did not reply to the noble Lord on that occasion, but I have to remind him that the estimate of £900 million has now come down to £600 million. Indeed, in today's announced figures, it is £600 million. That is a drop of £300 million per annum; so the news was perhaps not quite so good as the noble Lord might have thought at the time.
Lord Boyd-Carpenter: My Lords, would the noble Lord allow me? Does that mean that his gloom is proportionately modified?
Lord Williams of Elvel: My Lords, it means that my scepticism was fully justified.
The second general point is the position of the Central Statistical Office. The noble Lord, Lord Brabazon, at Question Time said, and I quote from col. 117 of the Official Report of 24th March:
"estimates of the current account are the responsibility of the Central Statistical Office".
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The implication was that in some way the Central Statistical Office was not a government institution; that it was independent; that it had its own rules: and that it was not part of the government machine.
I hope that the noble Lord, when he responds, will reaffirm that the Central Statistical Office is an organ of government, and that the Government take responsibility for the statistics that the CSO produces. Clearly, the CSO has got itself into rather a muddle on the estimate of the monthly invisible earnings surplus.
If I may turn to the particular problems in this order, we are all in favour of the Central Statistical Office and the Department of Trade and Industry being given the proper tools to provide proper estimates—for that, indeed, is what they are—of monthly balance of payment figures on current account. We would certainly not wish to oppose the order, particularly since we have referred on a number of occasions to the integrity of government statistics not only on the balance of payments but on unemployment and other matters. The integrity of government statistics needs to be restored.
Nevertheless, while giving a general welcome to the draft order that the noble Minister is proposing, I have to note certain points in particular. The first is that under Section I of the Statistics of Trade Act 1947 there is no mention of the balance of payments. Section 1 reads that this Act is,
"For the purpose of obtaining the information necessary for the appreciation of economic trends and the provision of a statistical service for industry and for the discharge by government departments of their functions".
I have no particular quarrels over whether the balance of payments is part of an economic trend or not, but I think it would be appropriate in an amendment to the schedule as drafted to refer specifically to the wording of the Act rather than to introduce a new concept which was not in the Act itself. That is however rather a technical point. I have some real problems about the interpretation of the new schedule that is in front of us.
The new schedule refers to an undertaking which may be related to a body situated outside the United Kingdom. In our discussion of the Banking Bill the other day we had an exchange between government Ministers and the Opposition on the meaning of the word "related". I should be grateful if the noble Lord could explain exactly what is meant by the word "related". Is it equivalent to "associated" in the terms of the Companies Act? Is the expression "related" here equivalent to "related" in the Companies Act, or is something else meant?
Secondly, the schedule refers to "the nature and extent of the relationship". What does "the nature and extent of the relationship" mean? What are undertakings required to do if they are asked to report in respect of inquiries from government departments as to "the nature and extent" of a relationship? What are they meant to reply?
Thirdly, there is the question of the financial interest mentioned in the third sentence of the new schedule. Again, "financial interest" can take a number of forms, and I am quite uncertain about what exactly the Government have in mind when they refer to "financial interest". Do they mean shareholding? Do

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they mean holdings in convertible stock? Do they mean holdings in privileged shares? Founders shares? What sort of things have they in mind? And about non-financial interests where there may be agreements between two independent companies which have a financial impact, and indeed may have an impact, such as licensing, on invisible earnings?
My fourth point refers to the fifth sentence in the schedule where the additional matters specify,
"particulars in respect of issued share capital, minority shareholders' interests, loans, reserves and provisions as recorded in the accounts of the undertaking".
I emphasise the word "loans" because, of course, loans are a moving target. A parent company, or another company, can give a loan, or retract a loan, and other people can give loans, and it may be that at the date of the accounts there may be some loan figure outstanding. But it is unclear how companies are expected to respond to a request for particulars in respect of such loans.
The next sentence in the proposed schedule refers to,
"net gains or losses of the undertaking attributable to changes in exchange rates, being gains or losses arising out of the relationship".
We are all familiar with the thought that gains and losses can result from foreign exchange contracts when they mature. But there is a thriving market in foreign currency options. It is quite normal to hedge a foreign currency exposure, and a foreign asset exposure, by means of an option. That option may, or may not, be taken up. How is an option going to be treated, because under the schedule as we have it in front of us options are not mentioned? Apparently it is only concluded contracts that are liable to inquiry
My last question refers to the last sentence of the schedule, which includes the words:
"where the undertaking is not a company incorporated in the United Kingdom, its net value to the related body".
Again I emphasise the expression "its net value". What on earth is meant by the expression "net value"? Does it mean the attributable net assets of the foreign company? Does it mean the net value after paying capital gains tax that the undertaking might receive if it sold its investment? I have no idea what this expression can mean.
I hope very much that the noble Lord will be able to satisfy me on these points. They are important. As the noble Lord knows from our previous discussions on a variety of Bills that he and I have followed through your Lordships' House, I am very anxious to try to understand what the legislation proposed to your Lordships means. It is in that spirit that I ask my questions.
Lord Ezra: My Lords. I follow the points made by the noble Lord, Lord Williams, particularly in regard to the figures which are published from time to time on the invisible balance. We were all concerned last November when the Central Statistical Office, contrary to normal practice—having issued estimates month by month of the invisible figures which in due course, according to practice, were corrected when the firm figures were available—brought out some new estimates which considerably increased the previous
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estimates and then turned out to be wrong. This is what we are very concerned about.
My noble friend Lord Diamond raised this in a Question last week and we must press the Government to assure us that this business of introducing estimates upon estimates will no longer be followed. We are entirely in favour of trying to get more precise information and therefore we support the endeavour represented by this new schedule—supported also, as we understand it, by the CBI—that further information should be provided subject to the clarifications for which the noble Lord, Lord Williams, has asked.
What we are against, however, is a regular issue of estimates which apparently have no greater validity—indeed, in the case I have cited they have even less validity—than the original estimates. I hope we can have an assurance to that effect.
Lord Diamond: My Lords, I apologise to the Minister that I was at a meeting and therefore unable to be present at the very start of these discussions. This matter arose last week and the Government are now taking the stance that if the CSO publishes figures, that is the end of the matter. The CSO has the responsibility and it exercises that responsibility in an absolutely proper manner to the best of its ability. We understand that. But the Government have the responsibility of accepting these figures and giving government authority to them. It is no use the Minister saying, "This is the case and the Government are doing very well relying on CSO figures" and then alternatively saying "No, we are awfully sorry the Government are not doing so well, but this is nothing to do with the Government; it is the CSO which puts up the figures".
The Government cannot claim credit and at the same time deny responsibility for the advice they get. They receive advice in all sorts of ways. One of the ways is by means of statistics from the CSO. It is perfectly clear that on the occasion we are referring to the Government were criticised—"criticised" is not too high a word—by almost universal informed opinion for taking an optimistic view when the normal practice is to take a cautious. if not a pessimistic, view, and altering estimates, as my noble friend Lord Ezra has said, upwards when it was clear to most people thinking about it that an alteration was due but it was due downwards, as has now been demonstrated to be the case.
It is possible for those who prepare statistics to make errors. It is just possible, and the Government have the commonsense responsibility for saying "No, that trend could not possibly work. There must be a mistake somewhere in those figures". This happens to everybody who has a responsibility for finally signing a report about statistics. It is the Government's responsibility to do the same.
I obviously make no charge against the CSO except to repeat my appreciation for its co-operation and enormous help during the five years in which it was supplying the figures to the Royal Commission of which I happen to be chairman. I make no criticism against it whatsoever. I say to the Government that they have a clear responsibility for using their common sense and deciding which figures make a reasonable trend and which do not, and which therefore should be accepted. They have a

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responsibility for not altering the figures in a most irresponsibly optimistic way when the normal procedure is to be cautious about it and when they had no really good reason for being so wildly optimistic.
Lord Lucas of Chilworth: My Lords, a number of points have been raised on this order. Some of them are not totally relevant to the order, but I shall do my best to respond.
I want first to turn to what seems to be uppermost in the minds of noble Lords who have spoken; that is, the quality of the invisible figures, the published estimates and projections which are based on the best information that can be assembled on each occasion. It has been said on a number of occasions that estimates of invisibles are based on a variety of sources, including quarterly, annual and less frequent surveys. The latest figures are simply projections of those.
I say both to the noble Lord, Lord Diamond, and to the noble Lord, Lord Ezra—I think this is something of a repetition of what I have said before—that these figures are very difficult to estimate. The net figure is a balance between very large gross flows in and out of the United Kingdom. Statisticians do their very best with the information they have. I assure noble Lords that there is no question of the figures being doctored or massaged. I recall the statement to which the noble Lord, Lord Williams, referred—a statement that I made. I was bitterly criticised for the statistical office moving the figures upwards.
The noble Lord, Lord Williams, and the noble Lord, Lord Ezra, will recall that during the passage of the Consumer Protection Bill we discussed the difference between estimates and quotes and firm figures. These are estimates built with the best possible information available. We were heavily criticised for moving the figures upwards. In the light of events subsequent to that adjustment, we adjusted the figures downwards. My God, which does the noble Lord want us to do? We are criticised for putting them up, and we are criticised for readjusting them down. This is precisely what statistical information on estimates is about.
Lord Ezra: My Lords, it is not whether the figures had been moved up or down that we are concerned about. The normal practice with invisible figures is to put in estimates and to leave those estimates in the figures until the real figures are known. The Government seem to have departed from that practice last year in replacing estimates with further estimates which in turn turned out to be wrong. That is what we are criticising.
4.30 p.m.
Lord Lucas of Chilworth: My Lords, I accept the criticism, I deny the charge. The statistical office is, as is the Civil Service, politically impartial. The noble Lord, Lord Diamond, said that he did not want to question the integrity of professional statisticians. Indeed, I do not believe that the noble Lord, Lord Ezra, or the noble Lord, Lord Williams of Elvel, wish to criticise the integrity of professional statisticians. The estimates are readjusted—upwards or downwards—as evidence comes to light. There is no question of any influence whatsoever being brought by government departments.
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I find this line of question just a little unnecessary. Frankly, I find it a little offensive that, after so many years, we should question the integrity of the CSO. Because the CSO is quite independent and because it has not been totally satisfied with the way that the figures are gathered, it has been consulting for some years on a better way of gathering the information. A planned improvement in the quality of all items in the balance of payments is becoming more and more important as the value of our overseas assets increases. I believe that the improvements made to the service, which will be further enhanced if your Lordships approve the order, will add to the total picture of figures.
Having dealt with the CSO, may I answer a number of the points raised by the noble Lord, Lord Williams of Elvel? Many of the companies that already provide us voluntarily with information find little difficulty in providing precisely the data for which the order asks. The amendment is aimed simply at obtaining information from all those to whom inquiries are addressed. It is grossly unfair that volunteers should provide information that is available to the free-riders, if I may put it that way—the non-contributors, who may well benefit from them. As I said in opening, the statutory nature that we now seek will refine and reduce the number of inquiries that we have to make.
I turn briefly to some of the detailed points in the schedule raised by the noble Lord. I think that he perhaps knows most of the answers because he took part in consideration of the Banking Bill. The noble Lord knows that the relationship was dealt with there. The requirement under the Companies Act 1925—that is, 20 per cent. interest—was the relationship. That applies to subsidiaries, branches and, indeed, associates.
Lord Williams of Elvel: The Companies Act 1985?
Lord Lucas of Chilworth: Yes, the Companies Act 1985. As to the true nature and extent, what is relevant is whether the subsidiary branch or associate has a relationship in the shareholding, one with the other.
With regard to the particulars, as I said, we have asked these questions previously and companies have not found difficulty in understanding what we mean. The noble Lord asked me about the financial interest. The financial interest is really the assets. In response to his other question, I say that options do have values and at some time they can be taken up or not. There is a value because options are bought and options are sold.
The noble Lord addressed the question of exchange rate gains and losses. The intention is that only those gains and losses arising from the relationship that have a bearing on the balance of payments are required. Finally, the noble Lord asked what we meant by net values in the last paragraph of the schedule. I do not wish to be trite with the noble Lord, but it is assets, net of all liabilities.
Lord Williams of Elvel: If the noble Lord says that net value means assets, why does he not say net asset value?
Lord Lucas of Chilworth: I should think because those who were consulted about this, the companies and so on, felt that this was the best way of expressing what was meant.
Lord Williams of Elvel: I am grateful to the noble Lord, but I do not think that he has answered my question fully, if I may say so. I wonder whether he has understood all the questions that I have put. Nevertheless, I understand that, in his view, companies are able to answer these questions, however imperfect they may be. I understand the Government's view that, if they wish to write this into legislation, even if we do not understand it, that is really their business. I understand that he wishes to introduce what, in trade union terms, is called a closed shop so that everybody should be involved in the same procedure and those who have opted out of it may be caught.
I am bound to say that I am still unhappy with the schedule as drafted. I hear what the noble Lord says; that there has been wide consultation. I am unhappy with the drafting. Nevertheless, in the interests of improving government statistics, I shall not oppose it.
Lord Lucas of Chilworth: My Lords, if your Lordships will permit me, I must confess that I had not anticipated that noble Lords would read into the schedule a number of matters which most certainly are not included. It may well be that I have not been able to provide noble Lords with all the answers that they wanted, and perhaps not even with answers that are totally satisfactory to them. Nevertheless, they are the answers. I will, of course, look carefully at the points raised. If I find that my responses are inadequate or do not fully cover the points raised, your Lordships may be assured that I will write to interested noble Lords and ensure that a copy is placed in the Library.
Lord Diamond: My Lords, will the noble Lord be good enough to take on board that nobody is criticising the Government for reducing their estimates and taking a prudent view on figures of which they have no detailed knowledge? The criticism arises only on increases in estimates for which there is no justification.
Lord Lucas of Chilworth: My Lords, I take on board the point that the noble Lord, Lord Diamond, makes. If he reads Hansard very carefully, he will see that that is exactly what has happened this afternoon. With that less than pleasant remark, which I certainly did not wish to make, I beg to move.
On Question, Motion agreed to, and it was ordered that the Address be presented to Her Majesty by the Lords with White Staves.

Supplementary Benefit (Resources) Amendment Regulations 1987
4.38 p.m.
Lord Hesketh Lord Hesketh rose to move, That the draft regulations laid before the House on 16th March be approved. [15th Report from the Joint Committee.]
The noble Lord said: My Lords, it may be convenient if I speak also to the Motion that the draft Supplementary Benefit (Requirements and Resources) Amendment and Uprating Regulations 1987, which were laid before this House on 16th March, be approved.
The first set of regulations deals principally with supplementary benefit for people in residential care and nursing homes, while the second contains a number of unconnected items. I propose to deal with the regulations in that order. I turn first to the regulations, which deal in the main with supplementary benefit paid to people in residential care homes and nursing homes. I would remind noble Lords that payments for all supplementary benefit claimants in homes or in lodgings are subject to national limits introduced in 1985. The most important feature of these regulations is to raise certain of these limits so that higher charges can be met.
We have recently completed a review of the limits based on a sample survey of local charges and studies conducted by a number of research bodies. We have also taken account of representations from a wide range of individuals and organisations including Members of both Houses.
On the basis of this information we are satisfied that the limits allow reasonable charges to be met in most types of establishment. The evidence supported an increase, however, in four specific areas. The regulations, therefore, provide for the limit to rise in residential care homes for elderly people by £5 to £130 a week. These homes form by far the majority of residential care homes and I am sure your Lordships will welcome this increase which means that elderly people will have £20 a week more than they had two years ago to meet their fees.
Noble Lords will recall that in July last year we introduced a special limit of £140 for very dependent or blind elderly people. This change was welcomed at the time and has indeed proved very successful in helping those most in need. The regulations increase this limit by £5 to £145.
In studying the evidence of the review, we were particularly impressed by the strong case made on behalf of younger physically handicapped people. Your Lordships will need no reminding that this group often needs special care which is expensive to provide. These representations are confirmed by our other evidence which indicated that average costs are very close to the current limit, so it is to be raised by £10 to £190. Extra help will also be given to people in nursing homes. The basic limit, which applies to most elderly people, will be raised by £5 to £175, representing an increase of no less than one-quarter over the 1985 level.
I now come to some other changes affecting people in homes. Residential care and nursing homes have always provided a variety of services for their residents as part of their caring role. It has always been the Government's assumption that charges should cover the full range of personal services and amenities, and the national limits have been set against this background. However, following legal advice, it now seems that residents in homes may be entitled to claim

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additional weekly amounts for items such as heating and laundry which should, in our view, be provided and charged for by homes as part of their normal service. This loophole has resulted in the unsatisfactory situation where some home-owners are charging separately for such services and the law allows such additional charges to be met over and above the limits. The resultant increases in benefit generally find their way to the home-owner and not the claimant.
This was never intended and in order to restore the policy intention the regulation removes entitlement to additional amounts for people in homes for heating, extra baths, laundry, domestic assistance, attendance and special diets. However, a further amendment will still allow these separate charges to be included as part of the homes' charge and met in full as long as the total charge falls within the appropriate limit. Claimants already receiving the additional amounts will have their total entitlement protected at the point of change.
I should like to make it clear that this change will not affect the payment of extra amounts for heating in respect of the normal home of a claimant who is only temporarily in a residential care or nursing home, nor will it affect ordinary lodgers or hostel dwellers. Apart from these main changes the regulations contain some minor technical amendments. These clarify the treatment of residential accommodation provided by a local authority—normally known as part III accommodation—and incorporate a measure of flexibility in response to the variety of such accommodation now available.
When making changes in the past, we have protected the benefit of existing claimants at the point of transition. A further change in the regulations amends the rules on this transitional protection as they apply to people in homes. In July last year, we made a special provision for people in homes whose benefit was transitionally protected and they were allowed up to £10 extra towards increases in fees. However, the regulation as drafted does not relate the additional benefit to entitlement on a particular day and this will result in unintentional gains for some claimants followed by losses at future upratings. The amendment restores the policy intention by specifying that the extra benefit is in relation to entitlement on a particular day, which is for most claimants 28th July 1986.
Finally, we are correcting an error in regulations which means that at present the whole of the income from a mortgage protection insurance policy for mortgage interest payments is disregarded during the first 16 weeks of a claim. We always intended that only 50 per cent. should be disregarded, because only 50 per cent. of the mortgage interest payment is included in the supplementary benefit assessment.
I now turn to the amendments made in the second set of regulations affecting the treatment of resources for supplementary benefit purposes. The major change is to introduce special provision for the treatment of local authority custodianship allowances. Noble Lords may be aware that there is now a scheme whereby the courts can award the custody of a child to a caring family where there is still contact with the natural
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parent and so adoption is not appropriate. Local authorities can pay custodianship allowances to such families and may do so particularly where the child was previously boarded out with the family.
We do not of course treat boarded-out children as part of the assessment unit for supplementary benefit purposes and do not take account of the fostering fees. But a child taken into custodianship clearly should be seen as part of the family, just as an adopted child is. We intend therefore that supplementary benefit should be payable for such a child, as it is for an adopted child. And where there is an allowance from the local authority, we shall treat it in the same way as an adoption allowance; that is, disregard the amount of the allowance which is over and above the child's supplementary benefit requirements. Thus we shall ensure that we do not disadvantage a family by taking the balance of the allowance into account against their supplementary benefit entitlement.
Two further changes will affect people in education and training. The supplementary benefit regulations currently provide for students to be treated as possessing the full maintenance grant, whether or not they do, in fact, have an award. The vast majority of students cannot in any event obtain supplementary benefit except in the long vacation and so this provision does not change their position. Students who do not receive a maintenance grant may have a parental covenant for an equivalent amount to a grant disregarded in the same way as a grant during the summer if they claim benefit. For nearly all students, this works perfectly well.
But where a student is being supported by a working partner and the partner becomes unemployed, these rules have the unintended result that the couple's joint benefit entitlement is reduced or even wiped out entirely. We have no wish to penalise claimants in these circumstances and so the draft regulations provide instead that the only income a student should be assumed to receive is the assessed parental contribution to an award. In considering a covenant made to a non-grant-aided student, we shall disregard the appropriate standard rate of grant at the London, away from home other than in London, or "at home" rate.
The second change is to restore our policy on training allowances paid by the Manpower Services Commission which have always been taken into account in full in assessing supplementary benefit entitlement when a trainee claims benefit to top up his income. A commissioner's decision has recently held that adult dependency additions paid with training allowance carry a £4 disregard even though the allowance itself is to be taken into account in full. This is inequitable as between one trainee and another and we propose to restore the original intention. However, the few trainees already getting a disregard in these circumstances will not be affected.
Finally, there are two more provisions in these regulations. First, we are providing that statutory maternity pay, when it is introduced on 6th April, will be treated as an income that is taken fully into account for supplementary benefit purposes. Secondly, we are making certain that extra statutory payments, which are made from time to time by the Secretary of State to compensate for defects in regulations until the law

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can be changed to achieve the policy intention, will be treated for supplementary benefit purposes in exactly the same way as the benefit they replace. For instance, if the benefit being replaced would not have been taken into account against supplementary benefit entitlement, nor will the extra statutory payment.
I trust that noble Lords will recognise that the regulations now before them have a very largely beneficial effect. In the two instances where a disregard is to be wholly or partly removed, this is merely to restore the clearly expressed intention in each case. I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 16th March be approved. [15th Report from the Joint Committee.]—(Lord Hesketh.)
Baroness Jeger: My Lords, some of these regulations are largely technical; others raise more important points of principle. However, I can assure your Lordships that I shall absent myself from that temptation and deal only with one or two points on which I hope it may be possible to have an answer, if not today, then by correspondence later.
As regards nursing homes and other residential care homes, we welcome the increased allowance. Most of us who know good homes realise how expensive it is to look after elderly people and especially those in need of special care and attention. However, I do not feel that we can let this welcome news go by without mention of the fact that there are many homes which are not satisfactory. The Audit Commission in its report of last December expressed grave concern at the burgeoning of small and unsatisfactory backstreet homes which are being subsidised, in effect, from the supplementary benefit of people staying there. In such places they get less than value for money, whereas good homes are often more expensive than even the revised allowances to keep in a satisfactory state.
With the increase in bringing people out of hospital and into community care, it becomes easier for people to take in what one might almost call lodgers, claim a supplementary benefit and then not give them the attention they need. There is one particular loophole in control which occurs when a so-called home has fewer than four people. In that case, it does not have to be registered and it does not have to be inspected. Anyone interested in getting a fair income can collect three elderly, handicapped people, tuck them upstairs in the top back room, collect supplementary benefit and yet never be registered or inspected.
While we welcome these increases, I hope that the Government will also pay a bit more attention, to inspection. We recognise that there is a register and that homes are supposed to be inspected at least once or twice a year. However, I understand from local authorities with which I am in touch that they find it very difficult to provide staff to do such inspections as often as they would like. Therefore, I hope that the Government will try to assist local authorities in carrying out their inspection duties and perhaps look once again at the rule with regard to a maximum of three people being able to collect social security benefit without any inspection of accommodation.
Turning to the next set of regulations, we welcome most of them. I am especially glad about the changes
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with regard to students. I recognise the difficulties in that connection. However, one area in which I think there needs to be a little more generosity is where students do not receive from their parents the grant at which parents are assessed to contribute. That matter causes a great deal of hardship, especially in families where a student may be estranged from the parents. There are some cases where there can be exemptions. However, my student friends wish that there were many more exemptions. It is imaginary in many cases to consider that parents are handing over the assessed grant to students. Such students have no option but to seek other ways of getting by, which are not always very satisfactory.
The other point I wish to raise on the second group of regulations concerns children leaving school at Easter. We have discussed this matter before in your Lordships' House. There seems to me to be a very unsatisfactory situation here. I understand that if a child leaves school at Easter and takes exams in June or whenever they are given by coming back just for the purpose of examination, that child is not entitled to supplementary benefit until after the date of examination. There is therefore a gap of several weeks in support for that child.
On the other hand if the child decides not to be bothered with examinations and leaves at Easter, he or she can then get supplementary benefit straight away. That seems to me to be an encouragement for children from low income families to leave at Easter and have nothing to do with exams. I have read carefully the report of the Social Security Advisory Committee. It says at paragraph 18 of Cmnd. 106:
"The danger in the Government's proposal is that rather than encourage young people not to leave school it may encourage them not to enter for examinations at all".
The report then calculates that a child who enters for examinations would only get child benefit of about £135. However, if the same child left at Easter, turned his back on exams and had nothing to do with them, he would then collect £350 in supplementary benefit for the same period. That seems to me to be rather a big difference and to be a disincentive for children to stay on at school and take exams.
I appreciate that the whole question of education and support of 16 to 18 year-olds is not strictly one for the noble Lord who is dealing with this debate. However, as the question of supplementary benefit relating to school-leavers is involved in the orders, I very much hope that he will bring to the attention of his friends in other places the need to look at the whole question of educational support for the 16 to 18 year-olds, whether that support comes from supplementary benefit or from grants from education sources and therefore from the funds of other departments. I leave our anxieties with him and I look forward to hearing from him.
5 p.m.
Lord Banks: My Lords, I should like to thank the noble Lord for his explanation of these two sets of regulations. The noble Baroness, Lady Jeger, referred to Easter leavers. As I understand it, Easter leavers are not covered by either of these sets of regulations. However, they have been considered together in the report of the Social Security Advisory Committee and

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I believe that they are dealt with in negative orders. Therefore, perhaps I may say a brief word about them.
I should very much like to see the eligibility for supplementary benefit beginning immediately after the conclusion of the summer examination period. I am aware that there are difficulties so far as that is concerned. The most important difficulty is the argument that there may be many short-term claims from people who, after examinations, claim supplementary benefit and then in fact return to school in the autumn. I should have thought that it ought to be possible to devise a system whereby it was not possible to return in the autumn if you have once been on supplementary benefit. At any rate, I hope, with the Social Services Advisory Committee, that further thought can be given to the possibility of making the conclusion of the examination period the point at which eligibility starts.
As to the two sets of regulations, if I may take them in the order in which the noble Lord took them and deal first with the Supplementary Benefit (Resources) Amendment Regulations 1987, I wish to make the same point that has been made by the noble Baroness, Lady Jeger. I am not happy about Regulation 4 dealing with the parental contribution of students. As I understand it, the regulation says that they shall be deemed to be in receipt of the parental contribution for supplementary benefit purposes if one has been specified by the education authorities. However, as the noble Baroness said, they do not always get it. I wonder whether it is right in these circumstances to say that they shall be deemed to be in receipt of it automatically. Of course what is really required is an overhaul of the whole system of student grants.
Only one of the provisions in this set of regulations was singled out for comment by the Social Security Advisory Committee. That was the regulation dealing with custodianship, which is a recent concept. As the noble Lord explained, local authority payments to custodians are to be treated—disregarded, in fact—in the same way for supplementary benefit as similar payments in the case of adoption or fostering. I certainly welcome that.
I welcome the provision which has been made with regard to lump sums. However, I note that there is some complaint that this puts custodians who receive payments from liable relatives at a disadvantage compared with those who receive them from local authorities. What is the Government's view about that? Is there any parallel with adoption or fostering cases?
Turning to the Supplementary Benefit (Requirements and Resources) Amendment and Uprating Regulations 1987, I am concerned about Regulations 2(c) and 6. These are the two regulations which provide for the gradual reduction in transitional protection afforded to certain boarders—in the one case from July 1986 and in the other case from April 1987. As I understand it—the noble Lord will correct me if I am wrong—if someone is at present in receipt of an amount which is higher than the new maximum he will continue to receive that; but as in the course of time the maximum is increased there will be no corresponding increase in the transitional amount until the transitional amount level is reached. If the
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maximum is raised in step with inflation, then when the maximum reaches the protected level the real value of the excess originally protected will have been eroded. Thus the benefit will be reducing in value over the years.
In the case of Regulation 6 the extra costs for particular services—again, as the noble Lord explained—are to be included in the basic charge, subject to the maximum. Any current excess is protected but gradually eliminated. This will mean that, unless the real value of the maximum is increased to take account of the fact that these charges are to be included within the maximum, the claimants will suffer a charge which will not be met by supplementary benefit. Will not that place some of them in a very difficult situation?
Have the new rates been increased? I did not quite catch that from what the noble Lord said, though he may well have dealt with it in his opening remarks. Have the new maxima been increased more than just to take account of inflation in view of the fact that the maxima now have to cover these additional payments which they did not have to do previously? It would seem to be a matter for some concern.
It has been represented to me that the limit for people living in residential care or nursing homes still has no special regard for the needs of very physically frail and elderly people and those suffering from senile dementia. Am I correct in thinking that people who are physically disabled and below pensionable age have a maximum—I believe this is what the noble Lord said—of £190 if in residential care and £230 if in a nursing home, as opposed to £135 and £170 for those above pensionable age? When you take into account these cases of the physically disabled and people suffering from senile dementia, that does not seem to be right. I should be most grateful if the noble Lord could throw some light on that situation.
Lord Boyd-Carpenter: My Lords, these regulations are of some importance to some of the most harassed and unhappy sections of our population. It is right that your Lordships' House should spend a little time discussing them and exercising its rights under the affirmative procedure.
My noble friend began by saying that these regulations were, on balance and on the whole, beneficial. Can he help the House to appreciate the extent to which that is so by indicating the net financial effect of them when put into effect? In other words, by how much will they increase public expenditure overall? Can my noble friend give the House that information?
I very much agree with what was said by the noble Baroness opposite about some of these residential homes. It may be that she has a good point in referring to the fact that those that accommodate four or fewer people are not subject to inspection. The amounts of public money involved, even in the smaller homes, are substantial. The amount of human misery which if the homes are inadequate can arise in them is substantial. It seems to me a pity that the good reputation of many of these residential homes should be undermined by the existence in certain areas, of which all of us are aware, of those thoroughly below standard.

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I should be interested to hear from my noble friend what action the Government propose to take to ensure that local authorities carry out their duty to inspect properly those homes accommodating four people or more and whether consideration can be given to extending this sphere of responsibility to those below that figure.
There is another, but small, point which intrigued me. In the case of residential homes provision is made in these regulations for incorporating in the total payments made the cost at the moment charged, in a separate and supplementary way, in respect of certain extras. One of these extras is described as extra baths. Can my noble friend explain exactly what is meant by extra baths? Is there a quota of baths? Is a citizen entitled to X number of baths in a week and is an extra charge made if he or she has one or two more? It seems a curious expression as included in the regulations. It would be helpful to have a clear indication of when a number of baths becomes extra.
Finally, I was very impressed by the point made by the noble Baroness opposite about Easter leavers. If it is really the case that a financial incentive is being given to young people to leave school at Easter and return simply to take the exams without remaining at school, that would appear to be a case in which the social security system is working in a manner which is wholly adverse to the education system. That cannot be right. It may be that there is some misunderstanding. I should be glad to hear whether my noble friend accepts that that is, or can be, the position. If it is, perhaps he will tell the House what the Government propose to do about it.
Baroness Turner of Camden: My Lords, I should like to reinforce what the noble Lord, Lord Banks, said about elderly people. I remember that last year we had in your Lordships' House a debate for which I received a briefing from the National Council for Voluntary Organisations. I was very impressed by the information given to me in connection with the care of elderly people. At that time—six or seven months ago—the figure of £125 was clearly regarded as totally inadequate. Now we have an additional £5 to care for elderly people. I feel that there is a case for looking at this again because it is not adequate in the light of the kind of services that have to be provided in looking after people who are elderly and frail and who need special care, and so on.
I welcome the fact that the case of young disabled people has been given special attention and that extra money has been made available for them. That is very good. However, I think that something extra should be done so far as concerns the very elderly.
I should also like to ask the Government whether they intend to take seriously the recommendations of the committee in its report issued as Cmnd. No. 106 and the suggestion that the whole structure of state support for 16 to 18 year-olds needs to be reviewed and rationalised. Although it may not be totally apposite in connection with these regulations, I should like to think that we shall look at this issue in a radical way in line with the recommendations that have been made in the report.
Lord Hesketh: My Lords, we have had an interesting debate this afternoon and a very large number of points have been raised. I shall try to respond to as many of them as possible but if I do not cover any particular point I shall write to the noble Lord or the noble Baroness who made it.
I stress first of all that the provisions of the regulations which affect people in residential care and nursing homes represent extra help for thousands of elderly and disabled people. They reaffirm the Government's commitment to maintain reasonable and realistic limits and I hope that they will be welcomed from all sides.
If there was one thread that ran through the words of every Member of this House who has spoken in the debate, it was a concern that the Government should be doing something to maintain standards in homes of residential care. I can assure your Lordships that this matter is taken very seriously by the Government and I shall certainly draw to the attention of my honourable friend the Secretary of State the great concern that has been shown here this afternoon.
During the passage of the legislation, consideration was given to fixing a lower minimum but it was felt that the registration system was devised essentially for larger establishments. This measure of course has regard to the small homes that the noble Baroness, Lady Jeger, mentioned initially. It would not be suitable for the domestic style of care that the very small home can provide. It was also thought desirable that the authority's efforts should not be diverted from the larger groups of dependent people. A line had to be drawn somewhere and it was decided to leave it where it had previously been in practice.
A study in 1985 by the department's social services inspectorate showed that authorities were hard pressed in processing new registrations and inspecting existing homes that had to be registered. We are keeping a close eye on the situation of very small homes and will bear them in mind when we take stock of registration arrangements. It should be noted that any change in the minimum number for registration will require primary legislation and there is no early prospect of that.
I ought to say to the noble Baroness that a large number of homes start out very small and then wish to become bigger. If they wish to become bigger they have to see the adjudicating officer and in that way there is an incentive to ensure that in those cases they meet the standards that we all hope for and require.
The noble Baroness also brought up the point about children who leave school at Easter. That issue is not part of the regulations that we are debating. The relevant regulations were not opposed at the time that they were discussed in your Lordships' House. I should be happy to write to the noble Baroness on that point.
Lord Boyd-Carpenter: My Lords, will my noble friend allow me to intervene on that point? It may be that we are wrong in raising this matter on these regulations, but can he perhaps indicate whether the Government are concerned about it?
Lord Hesketh: My Lords, I thank my noble friend for his interjection. I shall come to the Government's

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proposals on that point when I reply to the question of the noble Lord, Lord Banks, who also brought up that matter.
The noble Baroness raised a point concerning parental contributions and grants. We feel that it would be quite wrong for benefits to compensate in any way for an unpaid parental contribution to a student award.
The noble Lord, Lord Banks, referred to the problem of student grants. The Secretary of State for Education and Science is conducting a thoroughgoing review of student support under the chairmanship of my honourable friend Mr. George Walden. The review team is examining all the options for student support and one of the principal aims is to devise a system which will enable students to he removed from dependence on benefits.
The noble Lord, Lord Banks, brought up the question of those who were physically handicapped and the higher limit applicable. We have always made it clear that a distinction must be made between the younger physically disabled, many of whom might be very young and perhaps have multiple handicaps, and those people who simply become frail with the passage of time. A special limit of £145 gives a substantially increased measure of help to the very dependent elderly.
The noble Lord also brought up the matter of custodianship allowances and the payments that should be disregarded from liable relatives. The underlying principle concerning liability of relatives, which has been accepted by successive governments, is that it is for parents to maintain their children where those parents make payments to a custodian of the child, whether direct or via a local authority. They will therefore be taken fully into account. We share the SSAC's view that social security arrangements should not undermine the purpose of custodianship provisions and we believe that the regulations achieve that end by treating local authority custodianship payments as generously as adoption allowances.
The noble Lord brought up the subject of transitional protection. The aim of transitional protection is to protect the claimant from hardship of cash loss in benefit.
My noble friend Lord Boyd-Carpenter raised a subject which I feel I should have investigated more closely; namely, baths. I do not have an answer for him but I shall write to him as I am as interested as he is in trying to get to the root of this matter. He also asked about the financial effect of these measures. The additional help for people in homes will cost an extra £7 million in a financial year.
The noble Baroness, Lady Turner, made a number of valuable points, one of which was that the limits for residential care homes were too low. Our review showed that the limits allowed reasonable charges to be met. The noble Baroness also brought up the point of Easter school-leavers—I am sorry I must apologise to her; in fact it was my noble friend Lord Boyd-Carpenter who raised that point a second time. The Government believe that until they have completed their education, children should be dependent upon their parents. We do not think that education is
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complete until examinations have been taken. Certainly we do not think that the benefit system should encourage children to leave school and claim unemployment benefit when they are still studying for their examinations.
The point was raised that the structure of state support for 16 to 18 year-olds needs reviewing. It is relevant to the question of Easter school-leavers, although not connected with the regulations, that we shall continue to monitor support for 16 to 18 year-olds when the new income support scheme comes into operation in April next year.
I hope that I have been able to answer some of the questions that have been raised this afternoon. I have indeed been very grateful for them. The regulations that are before your Lordships today contain varied measures. They are essentially beneficial and I trust that the House will approve them.
On Question, Motion agreed to.

Supplementary Benefit (Requirements and Resources) Amendment and Uprating Regulations 1987
Lord Hesketh: My Lords, I beg to move the second supplementary benefit Motion standing on the Order Paper.
Moved, That the draft regulations laid before the House on 16th March be approved. [15th Report. from the Joint Committee]—(Lord Ilesketh.)
On Question, Motion agreed to.

Broadcasting (Extension of Duration of IBA's Function) Order 1987
5.20 p.m.
Lord Beaverbrook Lord Beaverbrook rose to move, That the draft order laid before the House on 16th March be approved. [15th Report from the Joint Committee]
The noble Lord said: My Lords, I beg to move that the order be approved. I shall not detain your Lordships long on this matter, the essence of which has already been the subject of earlier discussion in your Lordships' House.
This order, which was considered by the Joint Committee on Statutory Instruments on 24th March, extends the life of the Independent Broadcasting Authority from its present expiry date of 31st December 1996 to 31st December 2005. The need for this extension results directly from the Broadcasting Bill to which this House gave a Third Reading on 2nd February. Your Lordships will recall that one purpose of that Bill was to extend the contract period for a direct broadcasting by satellite service from 12 to 15 years in order that adequate returns could be made by investors in this expensive and risky venture. During the Second Reading debate on the Bill I told your Lordships that if the Bill were approved I would return in due course to seek your Lordships' agreement to an order which provided a parallel extension to the life of the IBA.
We expect that the latest date on which a DBS service will start to be the autumn of 1990. In these circumstances the contract for providing the service will run until the autumn of the year 2005. At present the IBA will cease to exist on 3Ist December 1996 and the purpose of the present order is to extend its life until 31st December 2005 so that it has the power to enter into the necessary legal arrangements with the company that is to provide the satellite and the programmes for the DBS service. It is hoped that the IBA will be in a position to enter into these arangements next month so that an early start can be made on acquiring the satellite and beginning the necessary commercial transactions. This is why the order comes before the House today. I hope that your Lordships will give it your approval. I beg to move.
Moved, That the draft order laid before the House on 16th March be approved. [15th Report from the Joint Committee]—(Lord Beaverbrook.)
Baroness Birk: My Lords, I thank the Minister for explaining the order. I confess right away that, having examined it vertically, horizontally, upside down, backwards and forwards, I do not find it much of a vehicle for hanging a great many of the things that I should like to say about broadcasting and about the various pieces of information we have been given from time to time. As the Minister pointed out, the order extends by four years the IBA's statutory life. I should like to pose a question which I do not expect him to be able to answer today. With the problems attached to finding sufficient funds to get DBS off the ground, have they given themselves enough time? It is not that I am asking for an extension but I wonder whether DBS will become viable in the early 1990s as the Government seem optimistically to think.
We have had, and are in the process of having, a series of piecemeal proposals all to do with broadcasting, whether concerning the BBC or the IBA. We have had the report of the Peacock Committee. We have also had the Broadcasting Bill, which I understand will receive its Third Reading today in another place. We have had a Green Paper on radio, though so far there has been no further parliamentary discussion on it. I also wonder what will be the relationship between the present ITV system and DBS when it comes along. All these important problems will have to be grasped at some time or other. The extension to the ITV franchises to which we agreed when the Broadcasting Bill was before us (and no doubt it will go through the Commons as well) extends the franchises but still leaves a great many questions open. It is impossible to treat the proposals on DBS quite separately from ITV.
I gave notice to the Minister that I would ask him about my next point. During the discussions in Committee on the Broadcasting Bill I raised the question of a Green Paper on television. We have now had the Green Paper on radio but we have not had a formal declaration about a Green Paper on television. I pointed out—and I received considerable support and encouragement from the Minister—that one could not use the report of the Peacock Committee as a discussion document because it was too big and too rambling in the sense that it went beyond the BBC and
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into ITV, though the Committee was set up to report on the financial proposals for dealing with the BBC. I pointed out that a Green Paper was badly needed so that people could discuss different proposals and options put forward by the Government.
At the Committee stage the Minister said that this was a matter which merited deep consideration and that the Government would bear that approach in mind. At Third Reading I rather hoped that the Minister would come up with the answer that his right honourable friend had agreed that this very sensible suggestion should be taken up and put in hand. There are no party political shadows over it at all. I hope that when he comes to reply he will be able to say that quite firmly. It has been mentioned in the newspapers and I have been told by various people in broadcasting, in both the BBC and the independent companies, that there is to be a Green Paper. I hope that the Minister will be able to confirm that that is the case.
Otherwise there is not very much one can say. It will probably affect radio as well, though we have the Green Paper, which as I said has not yet been discussed. For the present my noble friends and I do not oppose the order. In the circumstances it is a necessity and so has our support.
Lord Aylestone: My Lords, I must admit that when I first read the order I was at a loss to understand why it had been introduced. However, having heard the explanation from the noble Lord, I think I now understand. Unless the order is approved we shall find that we have direct broadcasting by satellite in the early years of the next century without a parent body, an authority controlling DBS. Therefore the four years is essential. If that is the reason, it is an important one which I am sure the whole House will support.
I have always been a little apprehensive—and I do not think that the expression "getting off the ground" is the right one to use—whether the finances and the return will be available to those people who invest their money in the franchises to make DBS worth while. To some extent this applies also to cable. However, we are committed to cable and DBS and it is my hope that both will be successful. Therefore the order is necessary.
It is difficult to talk about the year 2005 in a new century, though perhaps it is not so difficult for me because I shall then be celebrating my 100th birthday. My interest in television at that stage may be rather more celestial than terrestrial. Nevertheless, I hope that I am still here to maintain my interest. While we have a captive Minister with us I should like to join the noble Baroness in impressing upon him the importance of having an early debate on the Green Paper on radio.
Both the BBC and the IBA are aware that many changes are coming, although they are not quite clear what they are likely to be. The Government may have had other thoughts since the Green Paper was presented to the House. I am asking the noble Lord to urge upon his department the importance of a debate in both Houses on the Green Paper so that the Government can be aware of the general views before stating their own on the subject of radio. It is a little unfair to raise the matter on this order. Nevertheless, I support the order.
Lord Beaverbrook: My Lords, I am grateful to the noble Baroness and to the noble Lord for their support on the order. I shall speak briefly to answer the points that they have put to me.
The noble Baroness asked me whether the DBS service is likely to start within the timescale that we have envisaged. She asked me whether there is enough time. We believe that it is sufficient but, if necessary, we would seek a further order. However, let us all hope that it will not be necessary. We shall have to jump that fence if ever we reach it.
The noble Baroness and the noble Lord mentioned the question of the viability of a DBS service. During the debates on broadcasting in December it was explained that DBS is a risky and expensive venture—risky because the technology is largely untested and because of the inherent difficulties of successfully launching a satellite into geostationary orbit. There are also commercial risks involved. Consumers will have to be persuaded to invest in additional aerials and reception equipment. They will have to be weaned from the four television channels which they know well and encouraged to watch the three additional channels that DBS will provide. These are considerable matters to which the operator of the DBS system will have to pay very great attention if its investment is to be a successful one. We are all fully aware of that, and the Government wish the contractor, whoever it may be, well in the enterprise.
The noble Baroness mentioned a possible Green Paper on the future of television in this country. The Government have listened to the views of the public and of Parliament and announced conclusions on some of the recommendations of Professor Peacock's report affecting the BBC. Many of the recommendations need further consideration and, in some cases, including subscription, they require technical studies. No decisions have yet been reached on them. What further consultation will be needed on these matters depends on the nature and scope of the conclusions that are finally reached. A Green Paper may well be the appropriate vehicle for consultation.
As the noble Baroness will know, I have drawn the attention of my right honourable friend to the suggestion that she made in this House. There is much to be said for it. My right honourable friend the Home Secretary has indeed mentioned the possibility himself. We have, of course, recently published a Green Paper on radio—
Baroness Birk: My Lords, will the noble Lord forgive my interrupting? Before he leaves the question of the Green Paper on television, I thank him for what he has said. I accept what he has put forward. One point puzzles me; I think that I heard it correctly. The noble Lord talked about there having been consultation. I do not quite know what he means. There has not been consultation. There has been a large report by the Peacock Committee. And so far, that is it!
The Secretary of State, it is true, has said that he wants to keep his options open but nothing has been gathered together or put before people for consultation. I do not know who these people are who have been consulted apart from the Peacock
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Committee, the inner circles and Members of both Houses of Parliament. Beyond that, there has not been a chance for people in the country generally, or in the professions, to get to grips with the subject or to have it put in a succinct way in order to understand what is in the Government's mind.
While I am sure that the noble Lord is doing his best, I am a little puzzled at the reluctance to do something which seems so obvious and sensible.
Lord Beaverbrook: My Lords, the consultation that is taking place is of a technical nature. It includes the possibility of technical matters, including subscription, as I have already said. If there are going to be considerable changes to the nature of our television broadcasting, there will have to be further consultation. As I have said, whether or not we have a Green Paper on television will depend upon the kind of changes that we decide may be appropriate. I may not have gone as far as the noble Baroness would like on this matter, but I can assure her that we are actively considering the position. I hope that in due course the method of consultation will be announced.
I have answered the points made by the noble Baroness and by the noble Lord, Lord Aylestone apart from the point about a Green Paper on radio. I shall bring that point immediately to the attention of my right honourable friend the Home Secretary. I hope that we shall be able to go forward from there. I commend the order to your Lordships.
On Question, Motion agreed to.

Codes of Recommendations for the Welfare of Livestock: Revised Code No. 4—Turkeys
5.38 p.m.
Lord Hesketh: My Lords, I beg to move that the draft codes of recommendations which were laid before the House on 9th March be approved. With your Lordships' permission it would be convenient to take all four codes together; that is, two entirely new codes, one for ducks and one for rabbits, and proposed alterations to the two existing codes for turkeys and for domestic fowls.
In addition to the material before us for debate, we have placed in the Library of the House for information, complete texts of all four codes with the introduction which Ministers propose to include in the versions which will be printed and distributed to farmers.
I am sure that most noble Lords are familiar with the welfare codes. They are made under the Agriculture (Miscellaneous Provisions) Act 1968 and their

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primary purpose is to promote good welfare by making an authoritative body of advice available to farmers and stockmen. But they are not just advisory codes. They have the important legal status that a breach can be cited in a prosecution under the 1968 Act as helping to establish the guilt of the accused. As the House will know, codes for the main species have been available for many years and form an important plank of this and previous governments' policy towards farm animal welfare. Members of the state veterinary service, among their other duties, make specific welfare visits to farms to check on compliance with the codes.
Of the four codes before the House today, those for ducks and rabbits are, as I have said, entirely new and will meet a need which has developed with the growth in the farming of these species. Domestic fowls and turkeys have, of course, been farmed since time immemorial but since the codes for these animals were issued back in 1971 more information has been gathered, both scientific and practical, about their needs and about ways in which they should be kept. In the revisions that we propose, it has been possible to make more specific recommendations than in the previous codes and, in all four codes, attention has been drawn to the behavioural needs of livestock. The other areas given greater emphasis are the need for technical and managerial skills where specialist buildings and complex mechanical and electrical equipment are used, and the importance of protection against fire and other emergencies. Above all, these codes, and the prefaces—which, although not part of the codes, have also been tabled for information—draw attention to the major importance of stockmanship in the welfare of farm animals.
I do not intend to dwell on the detail of the codes but I should make one or two points on the code for domestic fowls. Possibly the most important development since the last fowls code has been the adoption within the European Community of a directive on the welfare of laying hens kept in battery cages. We are at the moment looking at the views of the industry and other interested parties before putting draft regulations to implement the directive before the House. Those draft regulations should be laid in the next few months but we have taken care to ensure that nothing in the draft code will conflict with the provisions of the directive. It is for this reason that we have excluded from the code any recommendations on space allowances for battery hens. These will be covered by the regulations. I assure the House, however, that the printed version of the code when published will make a clear reference to the requirements of the forthcoming regulations.
Another aspect of the fowls code, and those for ducks and turkeys, that I should mention is the advice they contain on the disposal of unwanted day-old chicks. At the end of last year the Farm. Animal Welfare Council informed the Agriculture Ministers that the council considered the most humane method of disposal for these chicks was to use a source of 100 per cent. carbon dioxide. I am pleased to say that this is the method used by most of the industry already and the council's advice is really confirmation of the correct and current practice. We have, however, made it clear in the codes that this is the method that should
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be used whenever possible and we shall be backing this up by issuing an ADAS advisory leaflet giving detailed advice on how it should be done.
The Government intend, as in the past, to issue printed versions of all four codes to keepers of the relevant species identified through the agricultural census. Printing and disseminating the codes is neither a cheap nor a simple operation and it will be two or three months after parliamentary approval before we are ready to issue the full text. When they are issued, I strongly advise everyone involved with these species to read them carefully and to follow the recommendations contained in them. We believe that it is in the industry's own interest to be seen to embrace these codes with enthusiasm to show that farmers are just as concerned as everybody else about animal welfare.
Finally, let me say that the documents before the House reflect a great deal of work by the Farm Animal Welfare Council over several years. I must pay tribute to the careful consideration which the council has given to this task laid on it by Ministers. Its members give up much time to the council's work and both the Government and this House owe them a debt of gratitude. But I am not just presenting the work of an advisory body. The Government have sought the views of interested organisations on the many difficult issues covered by these codes and believe that the documents before your Lordships represent a balanced view, taking account of all the relevant information. I commend them to the House.
Moved, That the Code of Recommendations for the Welfare of Ducks laid before the House on 9th March [15th Report from the Joint Committee]; the Code of Recommendations for the Welfare of Rabbits laid before the House on 9th March [15th Report from the Joint Committee]; the Codes of Recommendations for the Welfare of Livestock: Revised Code No. 3—Domestic Fowls—laid before the House on 9th March [15th Report from the Joint Committee]; and the Codes of Recommendations for the Welfare of Livestock: Revised Code No. 4—Turkeys—laid before the House on 9th March [15th Report from the Joint Committee] be approved—(Lord liesketh.)
Lord John-Mackie: My Lords, I am indebted to the noble Lord for putting forward the four codes so quickly and succinctly. They are necessary. As we all know over the years animal production has changed immensely and the old-fashioned ways have disappeared. With batteries, deep litter, slats and goodness knows what, it is necessary to give guidance.
However, I sometimes feel that the guidance is a little tactless. A good stockman will open the code and read that food and water must always be available. He will say, "Is that what we have to read about? We all know that food and water must be available all the time", and he will get fed up with the rest of it. I once gave a code to a stockman and that was his attitude. It is a small point, but I think that it is important that stockmen should be aware that the code is something that they should read. The obvious matters should be kept in one part and the new guidance in another.
I am afraid that I am completely out of touch with ducks. Much has been said in the various codes about density, but all that I can say is that irrespective of the density one gives to a duck, it will make a mess of it

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anyway. There is no doubt that ducks require more space than other birds. I have never seen ducks on slats or wire floors. I do not like them and I hope that they are not inflicted on ducks.
As I understand it, farming of rabbits as domestic animals is increasing. I do not like to eat rabbit. When I was a young man in Aberdeenshire in the late 1920s, I had a housekeeper who gave me rabbit to eat three or four times a week. When I married, I made a stipulation that that would stop. Thank goodness that myxomatosis came along and the reason for not eating rabbit is now even stronger. I have never tasted rabbit since. However, it is necessary to introduce the code because of the expansion of rabbit husbandry.
The other two codes have been in existence for a long time but, as regards poultry, the production of free-range eggs has been gaining ground. It is necessary because I believe that many people had forgotten about free-range eggs over the last dozen or so years. During that time, battery cages have been an economical way of producing eggs: it is not a particularly nice way, although I had a battery many years ago. In 1927 I started a poultry unit of free-range hens. I was intrigued to learn that some of the suggestions being made by the animal welfare people are the same as were my plans at that time: rotating around a central house in four acres of land.
The land required per 100 hens is difficult to estimate. The point is made that we have a damp climate but the EC figures are rather too high. Our climate is different in various areas. In the part of Essex which I farm there is a rainfall of 21 to 22 inches, while it is double that in the West Country and even more in other places. It is not as easy to arrive at those figures, as one would have thought.
Today land is bought at up to £2,000 per acre and is rented at up to £50 an acre. I calculate that if one decreases the number it can make a difference of as much as 21 pence per bird. The profit on eggs is quite low—it is pennies per hen—and I believe that one must look at the economics of this matter very carefully.
I believe that the same points apply to turkeys as to hens. Glancing through the new codes, they are acceptable as far as I can see. Although my noble friend Lord Houghton may have a little more to say, I think that we should agree that the codes are necessary, especially the two new codes, and give them our blessing.
Lord Grimond: My Lords, I apologise for having missed the opening remarks of the noble Lord, Lord Hesketh. However, I am glad that he is casting his munificent eye over ducks. I cannot say that I am an expert on ducks, but I live on a farm where I am glad to say there is always a duck or two about.
I should like to point out that members of the party opposite are constantly accusing the Alliance of a lack of policy. That is a most extraordinary accusation, as policy runs out of their ears. I have tried to discover whether there is a distinctive Alliance policy on ducks: luckily there is not.
I welcome the codes if they benefit ducks. To make a pun, some of them seem to me to be in the
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category of teaching our grandmothers to suck eggs. Nevertheless, they contain some rather touching items. We are asked to recognise that ducks like the company of other birds, particularly of like kind. That is true up to a point, but I notice that ducks often take a strong aversion to other ducks and are not always kind to other birds. I am not sure that ducks in the farmyard—charming and delightful as they are—are always pleased with too much company from other birds. It is also said that we must look out and prevent vice in ducks which, odd though it may seem, has been known to occur. Ducks have a very beady eye and every now and again I have noticed that they vent their spleen, occasionally on each other and sometimes on other birds.
The recommendations show a certain knowledge of ducks and duck psychology, and for that I welcome them. There is one very obvious point, but perhaps as these codes are full of obvious points, it is worth mentioning. A lot of people who keep ducks more or less casually appear to think that they can feed themselves. Up to a point and in suitable circumstances they can do so but they are rather large and greedy birds and it is not always sufficient simply to turn them loose and let them get on with it. Perhaps if we are putting those obvious remarks into these kind of regulations we might remind duck keepers that ducks very often need food and in these days of agricultural surpluses it is not so very difficult to obtain a little grain to give the ducks.
Lord Somers: My Lords, I hoped that I would be in entire agreement with the codes, but I am afraid that I only received them last night and therefore I have only been able to study the one on poultry. However, I should like to make a few criticisms. For one thing these codes are all very well but, for all that the noble Lord says, they are unenforceable. Those farmers who have consideration for their stock will no doubt already be doing what the code suggests. Those who do not have consideration for their stock will not be able to be penalised. Therefore the codes are not a good method of ensuring good treatment.
As regards the code on poultry, I welcome the recommendations on the size of cages and that the bird should have room to move round, spread its wings and so on. I hope that that will be enforced because it is most important. However, I was disappointed that from the beginning the whole code took it for granted that the enclosed intensive method would be used. I hope that many farmers will not take that as being the normal method and that it will eventually be possible to phase it out because it is far from either humane or satisfactory for the consumer.
Then there is the question of light. The code recommends good light during a certain period of the day, but it does not say daylight. There should be daylight. Articificial light is totally unnatural to a bird in a cage. Therefore, by providing glass panels in the roof, it is perfectly easy and a good deal cheaper to provide daylight. I hope that that will be noted.
So far as I can remember, there is nothing else in that particular code that I wish to criticise. However, I am sorry that the whole idea has been concerned with the intensive method rather than natural farming which of course is not so productive financially to the

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farmer but produces much safer and more satisfactory products for the consumer.
Lord Houghton of Sowerby: My Lords, intensive animal husbandry is really no longer any part of farming; it is part of our industrial production. Living things are the raw material of the industry. Ducks, especially lame ones, always arouse considerable amusement. They are freely quoted as examples in our political life but are not very pretty to see in real life.
I concentrate on the domestic fowl because that species is by far the most numerous of the feathered world which has been turned into intensive production. Whenever I approach the subject of intensive animal husbandry, I cannot help but feel that man's relationship with the animal kingdom is mostly to capture, to confine, to imprison and to slaughter all species other than his own and at times quite a number of his own. That is the price that those species pay for the benefit of mankind.
I could never believe that God created man in his own image, nor do I believe that the Fall contained any divine inspiration for the ascendancy of man. This is something innate in human nature. It is part of the instinct and outlook on the world of the human species. This evening we are dealing with part of this activity turned into the use and service of man. The day may come when there is a more humane approach to this problem, but at the present time we shall deal with it by increasing by square centimetres the space that may be allowed to a fowl kept in almost semi-dark conditions.
The noble Lord who introduced the codes must know the criticisms that can be made against them. I am sure that from his brief he must have a pretty good idea of what I am about to say. First, this is the first main code dealing with the welfare of the domestic fowl for 15 years. Secondly, the code now before your Lordships' House was last updated by the Farm Animal Welfare Council five years ago.
Those two dates surely suggest that the Farm Animal Welfare Council could be excused if it resigned en bloc, impatient with the scant attention that its work receives from time to time. It took us four years after the report of the Farm Animal Welfare Council to get the codes agreed for the conditions of poultry at the time and point of slaughter. Now we have these wider regulations in prospect, so long after they have gone through the Farm Animal Welfare Council. Since that council last saw them five years ago they have been updated in only one respect. Of the several new systems that have been introduced only the free range system is included in the present draft code.
In the past five years new systems have begun and new techniques and new approaches to the manufacture of eggs and meat for human consumption have been introduced. I really think that when an order springs from the recommendations of the Farm Animal Welfare Council it ought at least to have an opportunity to have another close look at the order when five years have elapsed since the last occasion.
There is a further complication, which is the. EC directive to which the noble Lord referred. An EC
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directive has made its appearance in more recent times and this is referred to in the introduction which is to appear, when these orders are printed, over the signature of the Secretary of State. I shall now read from the introduction which is to be included in the eventual document:
"An important development since the publication of the previous Code has been the adoption of an EC Directive on the welfare of battery hens which will provide, for the first time, a statutory minimum space allowance of 450 square centimetres per bird. In view of this the present Code cannot make any recommendation on space allowances for battery hens. Nevertheless the Government believes that a European standard of about 600 square centimetres would be more appropriate in welfare terms and we will be seeking improvements when the review of the Directive, due in 1993, takes place".
My Lords, 1993! How many birds will live to see 1993 in more spacious conditions? I do not expect to live that long myself.
The importance of this directive is that although it contains some recommendations which have been included in the code, it also contains a number of recommendations which have not. But the EC directive must become statutory regulations. That is the important distinction between giving effect to an EC directive and giving effect to a code of guidance for conduct. I welcome anything that is statutory in the essential conditions of animal welfare. I think too much can be left to codes, especially as there is so little difficulty in escaping compliance with them on the part of those concerned, without any serious risk of trouble.
However, the important thing about the EC directive is that the uniform space allowance for the battery hen, which is to be 450 square centimetres per bird, is lower than the amount of space included in the codes in this country in the past.
I should like to refer noble Lords to an assurance given by the then Minister of Agriculture, Mr. Prior, in 1971. I shall now quote from Col. 1021 of 30th July 1971 in the Official Report of the House of Commons:
"Both before and after joining the Community, we should be free to do anything which did not go against the Community's directives or regulations. But certainly we are determined that our Codes shall he a starting point for us, and that nothing will be done to go back on them. I can give the honourable gentlemen an absolute assurance about that. I am rather proud of the fact that Britain is the first country to have Codes of practice in this respect. Certainly we shall want to move forward from them rather than the other way".
This EC directive for 450 square centimetres per bird is below what was recommended in the code of 1971. No wonder the Secretary of State says that next time round they will press for about 600 square centimetres, when at the present time between 500 and 600 is the standard requirement under British conditions. That is a very important weakness in the present situation and it is why you will find a blank in the code for the space to be allotted to birds in Britain, because while the European directive is, as it were, waiting to be attended to, as the noble Lord explained, no statement can be made in this code about the space to be allowed per bird for the future. We must await the implementation of the directive. But what it looks like is that the directive will say that 450 square centimetres is the statutory minimum.
However, what will it say about the desirable standard margin between the lower space allocation in the European directive and that provided for in our

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own code up to now? That is my criticism of these orders. It is unfortunate that they are being brought forward so long after the Farm Animal Welfare Council last reviewed them and before the Government are able to settle finally what they will do about the EC directive upon which they have to reach a conclusion, I understand, within the next three months. It is therefore a pity that we are dealing with this order tonight when a few months hence at least the Government's position on the EC directive will be clearer and it would have given time for the Farm Animal Welfare Council to have another look at the codes.
Finally, I am sorry to have taken a little time, but when one can speak on this important subject only once in five years I think one can trespass on the time of the House a little more than usual. The overriding question here is always the difference between codes of practice and statutory regulations. What we would like to see is more statutory regulations on the essential points. I am sure that has been the view of the Farm Animal Welfare Council, on which I shall make my concluding observations. The status and the scope of activity and responsibility of the Farm Animal Welfare Council should be uprated. I know that this was reviewed and the Farm Animal Welfare Council strengthened and made more effective since the present Government came in in 1979. It was one of the election pledges of 1979 and it was fulfilled. Yet what we have in the field of animal scientific procedures under the Act of 1986 is a procedures committee of a new standing, with new responsibilities which I feel sure should be extended to the Farm Animal Welfare Council.
The procedures committee under the laboratory animals Act of last year has the right of initiative, the right to have its recommendations published when put to the Minister, and if the Minister declines to accept them his reasons are to be published. There is to be more open consultation with government in that field. Although it is essential in that field I believe it to be essential in this one also. The public cannot rest content, it seems to me, unless the watchdogs who are appointed expressly to look at these things from an independent standpoint are given the fullest respect and their recommendations implemented so far as possible by the government of the day.
But we know what vested interests there are lurking around this subject. Of course there are vested interests lurking around the laboratories too. We have the pharmaceutical industry, the chemical industry and the profession of science. We have all the vested interests. Whatever you do with animals there are vested interests. The time comes when the public has to ask for those vested interests to be weighed against the public intention to have more humane treatment of the animals that we use for our service, our enjoyment and our recreation too.
I sincerely hope that we are going to get a change in the next Parliament in the standing and powers of the Farm Animal Welfare Council. It is amazing the amount of unpleasant work that that council does. Fancy parading all round the slaughterhouses of Britain to look at ritual slaughter as well as red-meat slaughter and poultry slaughter. Why should members
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of committees of this kind submit themselves to this grievous and heartrending experience for the sake of the public at large, when the Government treat it as just another incident in the life of their administrative responsibilities and let it ride for five years while they consult with others? It is shameful that there should he this kind of delay on nearly all the reports.
We have a number already in the pipeline. We know they are controversial and difficult, but they have to he dealt with at some time. I fully believe that the public mood will be behind any government who wish to humanise the treatment of animals notwithstanding economic interests and the consumer interests. We must not make the consumer king in a field of this kind. Other species have their rights on earth along with our own, and that is becoming more and more recognised. I think that is quite enough to be going on with, but I promise that there will be more to follow when the time comes.
Baroness Phillips: My Lords, I should like to underline what my noble friend Lord Houghton has said. Many years on the British Standards Institution taught me that the only useful standards were the mandatory ones. The voluntary ones would be carried out by people who were going to do the right thing anyway, and the people who were going to do the wrong thing had nothing to fear because it was voluntary. That is why I am disappointed that these are only codes of recommendation.
Like so many of your Lordships, travelling along the other day I saw the most appalling sight—I think en route to Nine Elms market—of these unfortunate creatures pushed together in a space in which they would have been quite incapable of moving their wings and their bodies at all. This immediately reveals as utter nonsense the space allowance that we read about here.
Incidentally, speaking as an ex-teacher of maths, when did we ever have square centimetres? It seems to be a contradiction of the imperial measure and the metric. But we must emphasise that at some stage these must go beyond codes of recommendation. They must be codes of practice which are mandatory, and they must be enforceable. Who enforces them? Who sees what happens to these unfortunate animals in transit?
I am bound to say that anybody who travels on the London Underground at times would like to see some kind of practice about space allowance there. There is no excuse at this stage, as my noble friend has said, for not having something that is at least enforceable. This is a step in the right direction, which we welcome, but I should like it on the record that we want to see codes of practice which carry with them some mandatory implications.
6.15 p.m.
Lord Hesketh: My Lords, with permission, I shall do my best to respond to the points made in the debate. As might be expected, the debate has thrown up a number of differing views on farm animal welfare. The Government in tabling the documents before the House have tried to reach a set of judgments balanced between the views of those who press for radical action to alter livestock farming practices and

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those who see no need for further rules about what happens on farms.
Many of the issues are complex, and in many areas neither scientific knowledge nor practical experience can give us final answers. But I firmly believe that the draft welfare codes now before us represent the best judgment we can make in the present state of knowledge.
The noble Lord, Lord John-Mackie, mentioned his deep distrust of ducks and his dislike of rabbits. It is possibly, I suppose, slightly disturbing for those who see rabbits as an alternative crop that already one consumer has said no. But I am grateful for the comments that the noble Lord, Lord John-Mackie, made, and I believe that he sees that the Government are trying to do the best in a difficult situation where there are contrasting interests.
The noble Lord, Lord Grimond, mentioned the Alliance policy towards ducks, or lack of it. I shall bring that to the attention of my right honourable friend the Chairman of the Conservative Party. I am sure that the prospects of the ducks in the Orkneys are well served by the great care, attention, and love that the noble Lord probably gives to them.
The noble Lord, Lord Somers, showed a concern for battery hens and their conditions. He showed a concern also for the codes themselves. I must remind the noble Lord of what I said at the start. They are not just advisory codes; they have the important legal status that a breach can be cited in a prosecution under the 1968 Act, and as such are a useful tool in ensuring the protection of livestock.
The noble Lord also mentioned the problem of light and asked particularly why could we not have daylight. Part of the problem is that bright sunlight can be harmful to birds, particularly if they cannot move away, and it is not practicable to provide a housed system where it is possible to provide for the mobility of the chickens.
Lord Somers: My Lords, that is really rather skirting the problem. It is perfectly easy to arrange for daylight which is shaded from the sun.
Lord Hesketh: My Lords, I take the noble Lord's point, and will pass it on to my honourable friend. With regard to the future of the battery cage, which I suspect is what the noble Lord is on about, at the moment there is no practical substitute for the battery system which has yet been developed or properly tested. Free-range and other semi-intensive systems certainly have a place in commercial egg production, but much more work needs to be done before we can even consider their exclusive adoption. The Government have gone to great lengths constantly to monitor and update what we are doing in this field.
I probably will disagree with the noble Lord, Lord Houghton. not only in his industrial view of farming but on the Christian approach to it as well. When he says that intensive agriculture, and particularly intensive livestock rearing, are just an industry I must say that I have met many farmers who have a real and true concern for and love of their stock. The success of any agricultural enterprise depends on a happy and a high state of welfare of the livestock.
Lord Somers: My Lords, if that were true, they would not keep them like that.
Lord Hesketh: My Lords, I fear that I shall have to agree to differ with the noble Lord.
The difficulty over the Common Market regulations was brought vividly to our attention by the noble Lord, Lord Houghton. The Government have made no secret of their view that it would have been better for a Community directive to have aimed at an eventual harmonised level of 600 square centimetres per bird—even if this is not an imperial measure. But 450 square centimetres was the best compromise available last year, and we shall return to the charge when the directive is reviewed in 1993.
The noble Lord made great issue that 1993 is a long time away and that 450 square centimetres was, in his opinion, not good enough. But on the basis of intensive poultry systems in Europe, for many European chickens this is a great improvement and something where the British influence is bearing for good in Europe.
The noble Lord. Lord Houghton, went on to discuss the Farm Animal Welfare Council and the fact that nothing has happened in the last five years. But that is not quite so because the Farm Animal Welfare Council completed its study on the free range aspects only last year. The code was held up to take account of the forthcoming European directive.
The noble Lord, Lord Houghton, also raised the point that we are putting the codes into practice tonight, three months ahead of the European directive. The point is that it will be for the benefit of animal welfare, so there is no reason to delay it. I can only say that it has been a most interesting debate. The only area where I would disagree finally with the noble Lord, Lord Houghton, is that when I was a very small boy I was always taught that speciesism was a dangerous medieval heresy, so I suspect we shall not be able to agree on the difficulties of this problem.
It has been a most useful debate. In conclusion, I acknowledge that these new or revised codes may not be perfect and may not contain all the advice that noble Lords might wish to see, but they are the result of careful thought and contain the best advice and guidance currently available to stock keepers. If followed by stock keepers I believe they will make a significant contribution to improving the welfare of our farm livestock and I ask the House to give them its approval.
On Question, Motions agreed to.

Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987
6.23 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara) rose to move, That the draft order laid before the House on 4th March be approved. [14th Report from the Joint Committee.]
The noble Lord said: My Lords, I hope it will be for the convenience of the House if I speak at the same

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time to the second order standing in my name, the Merchant Shipping Act 1979 (Commencement No. 11) Order 1987.
The purpose of these two orders is to bring about the changes in United Kingdom law necessary to reflect the coming into force of the 1974 convention relating to the carriage of passengers and their luggage by sea, known as the Athens Convention. The substance of this convention has been in force in the UK since 1978. These orders merely give effect in the UK to the entry into force of the convention in other states who are party to it.
Awareness of and interest in the Athens Convention have been raised by the tragic loss of the "Herald of Free Enterprise" at Zeebrugge. I hope the House will think it right if I briefly outline the background to the convention as it affects the limitation of liability in respect of claims arising from a maritime accident.
There have been six conventions this century bearing on limitation of liability to passengers. The present United Kingdom regime rests on two: the Athens Convention, and the 1976 Convention on Limitation of Liability for Maritime Claims. Under the Athens Convention and in respect of death or personal injury to a passenger, the limit is £38,173 per passenger claiming. For loss or damage to cabin luggage, the limit is £681 per passenger. For vehicles including their contents, the limit is £2,726 per vehicle. For loss or damage to luggage other than cabin luggage or vehicle contents, the limit is £981 per passenger.
The limits I have described are not entitlements; a claimant has to establish the extent of his loss. In respect of death or personal injury to passengers or loss of or damage to cabin luggage arising from shipwreck, collision, stranding, explosion or fire or a defect in the ship, fault or neglect of the carrier is presumed unless the contrary is proved. In respect of loss or damage to other luggage, fault or neglect of the carrier is again presumed irrespective of the nature of the incident which caused the loss or damage, again unless the contrary is proved. The introduction of these presumptions altered very substantially the balance between passenger and carrier, to the advantage of the passenger. Perhaps even more important was that the carrier could no longer contract out of liability.
Two other provisions of the convention are of particular importance. First, states party to the convention may apply to carriers, whose principal place of business is in their state, a higher per capita limit in respect of death or personal injury to passengers than the general limit in the convention.
Second, a carrier may lose his right to limit his liability,
"if it is proved that the damage resulted from an act or omission of the carrier done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result."
In including this provision, it was the intention and expectation of those participating in the 1974 conference that the provision would result in limitation being denied to a carrier in only the most exceptional circumstances.
Now that the convention has entered into force we can press for the limits of liability to be increased
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internationally. At the next meeting of the International Maritime Organisation council in June the United Kingdom delegation will press for the organisation's legal committee to be instructed to review the limits in the Athens Convention as a matter of urgency. I have to say, however, that agreement and implementation of such changes could take a number of years.
The preparation of these orders and the loss of the "Herald of Free Enterprise" have naturally led us to look at the scope we have to increase the limits unilaterally. As I have already said individual states who are party to the Athens Convention have the right to take unilateral action to increase the limit for death or personal injury to passengers on their ships. We have looked at the provisions made in the other international transport conventions to which the United Kingdom is a party. These are the Convention Concerning International Carriage by Rail 1980 where the limit is £56,108; the Convention for the International Carriage for Passengers and Luggage by Road 1965 which, though it is not in force internationally, set a limit of £66,795; and for air, the Third Protocol to the Warsaw Convention, done at Montreal but not yet in force, which will raise the limit to £80,154.
In these circumstances, the Government are giving the most serious consideration to a substantial increase in the per capita limit. One possibility would be to raise it to a figure close to that adopted by the Civil Aviation Authority for air passengers—that is to say, about £80,000. The Government have already initiated urgent consultations with a wide range of United Kingdom interests that would be involved in such an increase. Such an increase would apply only to United Kingdom ships, and could not be retrospective. In the case of the Zeebrugge disaster your Lordships may have noted P&O's commitment to make available ex-gratia funds in addition to the £250,000 they set aside for immediate hardship needs.
The commencement order No. 11 brings into force the relevant sections of the 1979 Merchant Shipping Act 1979 and the parts of Schedule 3 of the Act which apply the Athens Convention internationally. You may notice that the preamble to this order contains a paragraph, the third, which says:
"And whereas it is necessary to provide for the said Athens Convention to continue to apply to such contracts for international carriage made before 30th April 1987."
This is not in the other order; and it is not in the commencement order as laid before the House. It was included in these printed copies in error. As it is not part of the actual order, but only a preamble, it does not affect the validity of the order your Lordships are being asked to approve. The paragraph will be omitted from the order when it is made.
The domestic carriage order applies the terms of the Athens Convention to contracts for domestic carriage.
I commend the two orders to your Lordships.
Moved, That the draft order laid before the House on 4th March be approved. [14th Report from the Joint Committee]—(Lord Brabazon of Tara.)
Lord Underhill: My Lords, I am certain that the House will be grateful to the Minister for explaining

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these two orders. Without his explanation very few of us would know what the orders were about—certainly I would not—except that they confirm the Athens Convention. It is rather regrettable that the explanatory notes sometimes do not tell us in precise detail what the order and the information contained therein is about. I certainly give ready approval to both these orders.
I am delighted to hear from the Minister that the Government will press internationally, as a matter of urgency, for the figures to be increased. Incidentally, no one would realise what the figures are because there is no reference either in the explanatory note or in the order. I am certain that other noble Lords like myself will be interested to learn from the Minister of the power that the United Kingdom or any other nation has to take unilateral action to increase its compensation irrespective of other countries. We welcome that. The figures given on rail and air, I am certain, will be welcome. If the Government move on the basis of air compensation, we shall be very grateful.
With regard to getting the fullest possible support, first, what steps do the Government propose to take internationally and unilaterally? What bodies are they consulting? It is unfortunate that there are no passenger organisations such as exist in the case of rail. We would like to know, therefore, what bodies the Minister may be consulting to ascertain the best figure for any unilateral increase in compensation.
Lord Brabazon of Tara: My Lords, I am grateful to the noble Lord, Lord Underhill, for his reception of the orders. I take the point that the explanatory notes could have been expanded a little to make clearer what is being done. I will draw that to the attention of my right honourable friend.
As to the steps that we are taking internationally to get the limits raised, as I said in opening we will be bringing this before the IMO as soon as possible. We have already suggested to the IMO that the limits should be raised, but the IMO is understandably unwilling to consider that until the convention comes into force. As it now has, we can press forward on that matter.
As regards the decision to raise the limits unilaterally, we have already consulted in writing shipowners, insurers, unions and local authorities on the matter. We have asked them for a fairly speedy response. We should like comments back by 16th April. Following consideration of those comments, my honourable friend Mr. Spicer intends to act without delay.
On Question, Motion agreed to.

Merchant Shipping Act 1979 (Commencement No. 11) Order 1987
6.33 p.m.
Lord Brabazon of Tara: My Lords, I beg to move.
Moved, That the draft order laid before the House on 4th March be approved. [14th Report from the Joint Committee]—(Lord Brabazon of Tara.)
On Question, Motion agreed to.

Patents (Amendment) Bill [H.L.]
6.34 p.m.
Report received.
Clause 1 [Restriction of acts authorised by certain licences]:
Lord Northfield Lord Northfield moved Amendment No. 1:
Page 1, line 9, leave out from ("patent") to ("for") in line 11
The noble Lord said: My Lords, in moving the amendment, I will speak also to Amendment No. 2. These are purely drafting amendments. As your Lordships are aware, I made clear on Second Reading that the Government were kind enough to authorise the parliamentary draftsman to assist with the Bill. The draftsman has advised on the amendment moved by my noble friend Lord Stallard, which is the subject of Amendment No. 1 now under consideration. When my noble friend moved it, he proposed its inclusion at a point in the Bill which the draftsman suggested was not the correct point.
The purpose of Amendment No. 1 is to leave out words from page 1, line 9. Words to this effect would be inserted by Amendment No. 2 at the top of page 2 of the Bill with the remarshalling of the contents of subsection (4) to make room for the necessary insertion at that point of the Bill. I repeat that this is a drafting amendment to move a phrase from one part of the Bill to another.
I give full assurance to my noble friend who first moved the amendment that Amendment No. 1 does not alter the sense of his amendment, which was carried. Indeed, the parliamentary draftsman advises that the purpose, intent and clarity of the amendment is improved by its inclusion at this new point in the Bill. I beg to move.
On Question, amendment agreed to.
Lord Northfield Lord Northfield moved Amendment No. 2:
Page 2, leave out lines 3 to 11 and insert—
("(4) A declaration may not be filed—

(a) in respect of a patent which has at the commencement of the Patents (Amendment) Act 1987 passed the end of its fifteenth year; or

(b) if at the date of filing there is—

(i) an existing licence for any description of pharmaceutical use of the product, or

(ii) an outstanding application under section 46(3)(a) or (b) above for the settlement by the comptroller of the terms of a licence for any description of pharmaceutical use of the product,

and, in either case, the licence took or is to take effect at or after the end of the sixteenth year of the patent.").

The noble Lord said: My Lords, I have spoken to the amendment. I beg to move.
Viscount Craigavon: My Lords, I missed the opportunity to speak on Amendment No. 1. May I speak on Amendment No. 2 in relation to what the noble Lord has said as I have been involved in the Bill?
I am grateful for the amendment. As the noble Lord said, it makes the situation more intelligible. The amendment refers to the timescale of the effect of the Bill. I mentioned at another stage of the Bill last week the danger of wasting parliamentary time. I do not

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know what fraternal communications the noble Lord, Lord Northfield, has with his Front Bench, but I have to rely on other sources. May I ask about an article that appears in today's issue of the Guardian at page 5 by an experienced lobby journalist. It says:
"The Shadow Cabinet has decided to kill a private member's bill by Lord Northfield".
The next paragraph continues:
"The decision follows a debate in the Shadow Cabinet with strong feeling expressed by the party's front bench that the bill, introduced in the Lords, runs contrary to Labour policy and cannot be allowed to succeed by passing through the Commons unchallenged. Labour MPs can be expected to object to the Bill when it comes to the Commons, which means it will automatically fall".
I do not know whether the noble Lord, Lord Northfield, wishes to say anything about that when he comes to reply to the amendment.
Lord Williams of Elvel: My Lords, the noble Viscount has asked about the attitude of the Labour Front Bench. The Labour Front Bench in this House is the Front Bench for this House. What discussions may have taken place among Members of another place is confidential to those people and is not a matter that properly concerns your Lordships.
I have no idea what discussions took place. I do not believe that the Guardian is a privileged source of information. I do not believe that the Guardian has a member of the Shadow Cabinet on its payroll, although I could be mistaken. I do not believe that any newspaper has a member of the Shadow Cabinet on its payroll.
If the noble Viscount likes to quote newspapers and ask the Labour Front Bench what our attitude is to this or to anything else, I can only say to the noble Viscount, do not always believe everything that you read in the newspapers.
On Question. amendment agreed to.

Plant Breeding Institute and NSDO
6.40 p.m.
Lord John-Mackie Lord John-Mackie rose to ask Her Majesty's Government whether, in view of the complexities that have arisen which were mentioned by the Earl of Dundee on 9th March (col. 818), they will now withdraw their plans to privatise the Plant Breeding Institute and the National Seed Development Organisation.
The noble Lord said: My Lords, I should like to be as brief as possible in asking this Question, but I must just give some of the history of the situation. In the early spring of 1984, rumours were rife that the NSDO—the National Seed Development Organisation—was to be privatised. I put down a Question in, I think, April of that year and had a reply from the noble Lord, Lord Belstead—as the NSDO is under the Ministry of Agriculture—that that was the case and it was simply because of the Government's privatisation plans. No doubt the Ministry of Agriculture had been asked to look at what it could privatise and it picked on the NSDO.
In supplementary questions, the noble Lord, Lord Walston, and I both pointed out that privatising a
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marketing and development organisation without the material that it sold seemed to be slightly ridiculous. I do not think we put it in those words, but I have the Hansard here. It took the Government till 1985 to discover that that was so and that they could not privatise the NSDO without the Plant Breeding Institute. The noble Lord, Lord Belstead, before my Question was to be answered, very kindly asked whether I would mind if he explained why the Government had decided to include the FBI in the privatisation scheme. It was very nice of him to do that. That Answer was given in 1985 and we were to be told how it would be done.
Then in 1986 nothing seemed to be happening, so early in that year I put down another Question to ask what was the situation. I was told that the Government had appointed a body from Lazards of about six high-powered people to look at the matter and report. That report was to be given to us in early May, 1986. Of course, the Department of Education and Science came into the picture as soon as the PBI was involved, because it is under the Agricultural and Food Research Council, which is under the Department of Education.
Later in that year, I asked a Question about what was happening which was answered by the noble Earl, Lord Swinton. I asked what Lazard's had reported. The noble Earl did not say that Lazard's had not reported but just that the report would be confidential because of commercial secrecy, which is always said when one wants to avoid answering a question.
I now come to March 1987. As the noble Earl knows well, I had a Question down a couple of weeks ago and was told that in a few months the Government were hoping for a memorandum from Lazard Brothers, which would report in that way. The noble Earl was pressed by several noble Lords on this subject and he admitted that considerable complexities had arisen which had caused the delay.
I have spoken to various people on the subject and have been told that there have been involved the Ministry of Agriculture, the Department of Education and Science, Lazards, the PBI, the NSDO, the Agricultural Genetics Company and the Treasury. Funnily enough, somebody has suggested that the Department of the Environment also got into the picture, because there is talk—it may be only gossip, but there is no smoke without fire—that the area might be developed for other uses. With all those ministries and the Treasury coming into the picture, the complexities must have been quite fantastic. I do not know how they possibly came to a decision, or will come to a decision—because they obviously have not done so.
Having mentioned the complexities I want to go much further, because that is necessary. I should like to quote the original reply in 1984, which was:
"in the context of their general policy on privatisation, the Government are examining the possibility of privatising the National Seed Development Organisation".—[0fficial Report, 21/5/84; col. 1.]
Then in November 1985, when the PBI came into the picture, your Lordships were informed that:
"the Government were examining the possibility of privatising the National Seed Development Organisation. However, in the light of the Government's policy to encourage industry funding of research and NSDO's close dependence on plant breeding at the Plant

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Breeding Institute, consideration is now being given to the possible privatisation of applied plant breeding at PBI as well as of NSDO.—[Official Report, 28/11/85: col. 976.]
That is all the information that we have been given as to why this should take place. There has been a lot of pressure, but we have no evidence at all that the privatisation of this world famous body will be of benefit to anyone at all.
The great thing—I should like the Minister to listen carefully here—is that the evidence the other way is almost perfect. There is no question that in plant breeding in this country the private companies—and I know a lot of them—such as Sir Joseph Nickerson and Miln and Masters have done a good job. But all that they have done together does not add up to what the PBI has done alone, not only in this country but worldwide. The Government must tell us why they are going to privatise this body, with all the evidence against it. We must get more out of them than the answers that we have been getting over the past three years. I have not touched on the whole question of the demoralisation of the staff, because my noble friend Lady Nicol, who is a Cambridge person, will put that point and I know she will put it much better than I can.
I should also like to mention the economics of the matter. The NSDO puts into the Treasury nearly twice what the PBI costs—admittedly in another way; it does not go back through the PBI. Apart from being profitable, and its record as a plant breeder and everything else, 80 per cent. of the wheat of this country is produced by plants from the PBI. I want to give some credit to the Scottish plant breeding stations which market what it produces.
I think that the Maris Piper potatoes which it bred account for nearly 50 per cent. of the potatoes in this country. In Aberystwyth, you will find some of the grasses, particularly the leafy coltsfoot, which is produced through the NSDO. People must look at that and the Government must produce evidence that privatisation will be of benefit to agriculture in this country and in the rest of the world. I want evidence and not just the sort of answers we have had in the past. I hope that the Minister has something to tell us tonight.
6.49 p.m.
Baroness Nicol: My Lords, we are grateful to my noble friend for raising this matter tonight so that we can once again ask questions about this subject which, as he said, has been going on for so long. In addition to the questions which my noble friend listed, we had a full debate on agricultural research and development in May last year. At that time the noble Lord, Lord Belstead, was not left in any doubt about the anxieties in this House over the whole state of agricultural research and development. In particular, the problems of the PBI and the NSDO were specially mentioned by a number of speakers.
As my noble friend indicated, at that time the Minister said that the report from Lazards was expected before the end of May 1986. Here we are at the end of March 1987 and we still do not know what is happening. These unfortunate organisations are still in doubt about their future shape and for that matter their ownership. They have to be content with
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rumour. Suggestions are being made that the remaining publicly-owned part of the PBI—nobody seems to know what that part will be, because there is nothing concrete to go on—is to be moved from Cambridge. If that were to happen, it would destroy an immensely valuable and close relationship that the PBI has had with the university over many years and in fact since its very beginning. The value of that relationship has been incalculable to both organisations and, if I may say so, to the world as a whole and not simply to the local effort.
The continuing uncertainty of the past two or three years has led to the loss of even more valuable staff. The situation was bad enough last year at both the PBI and the SDO. We have recently learnt that the head of the PBI is about to go to the United States because of the uncertainty here. He is taking early retirement from the PBI and going to America. Some noble Lords may think that we can afford that kind of brain drain. I do not think that we can, particularly in agriculture, because we are all aware of a newer crisis in the agricultural industry of this country. We rely on the talents of these people to keep us ahead of the world in solving the problems of agriculture. They have done it nobly up to now, and it is a great shame that they are being destroyed in this way.
The Select Committee on Science and Technology submitted a report in November 1986 which was debated in this House on 19th February 1987. That report was on civil research and development as a whole. The conclusions of the committee gave clear guidance to the Government on how it saw the role of the Government in research and development generally, as well as the role of industry. The debate on that report attracted a very impressive list of speakers who were all leaders in their fields. The decisive message coming out of the debate, as well as the message coming out of the report, was that the Government should recognise the crucial importance of R&D to our future and that the Government must take a responsible role in ensuring continuity and funding. As I have said, that applies more at this moment to agricultural research than to any other research in this country.
If the shilly-shallying which has gone on for the past two or three years over these two institutions is typical of the Government's approach to research and development elsewhere in the country, then I truly fear for our future. I hope that the Minister will have for us tonight some positive answers that will put at least some of our fears to rest and give some indication to the two institutions what is to happen to them, and, just as important, when it is to happen.
Lord Diamond: My Lords, I apologise that my name was not put down as a speaker. I shall therefore be very brief. The arguments have been put extremely well already. However, I want to add the whole weight of these Benches against this mad proposal. I am not merely asking questions, as has been done so ably by the two previous speakers; I suggest that the Government should think again.
We know how this matter arose. If we look at Hansard of 14th April 1986, col. 416, the noble Earl,

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Lord Swinton, said in the course of a reply to a Question:
"However, there has been some reduction in the level of funding at the PBI and other institutes and it is sensible to look for ways to make this up".
Therefore it is quite clear what we are engaged upon. This is not an exercise in improving research or breeding. What we are engaged upon is an exercise in saving a little money and in trying to add to the cash resources of the Chancellor by selling off an asset, if it is available to be sold or can possibly be sold.
The arguments against that have been put many times. To me, the important arguments are, first, that there is—not will be, but is—a split-up of a most valuable and important research team which will undoubtedly prejudice research effort. Inevitably the future benefit of such research as will be done by the privatised section will be restricted for the benefit of those who own the organisation instead of the present position where the organisation is used not only for the benefit of our country but for the benefit of the whole world and particularly third world countries.
Inevitably there is loss of key personnel as a result of demoralisation and the loss of a sense of purpose held by people who devote their lives to important work. Never mind variations in salaries. A man who believes that he has a mission in life must feel that there is a possibility of his fulfilling it, and he cannot feel that if the wherewithal to carry out the task is destroyed. We know that the director of the institute, Professor Day, is either going or is already on his way to the United States where he will be able to carry out his work.
I should like to summarise the position in the following way. I regard the privatisation of the Plant Breeding Institute—I concentrate on that institute because I can see some arguments both ways so far as the other organisation is concerned—a body which is an internationally renowned centre of excellence in fundamental research, as plainly absurd. Already some of its staff, including the director, are joining the brain drain. Other countries wish to harness their ability, even if the British Government do not. A remarkable heritage in plant breeding has been casually destroyed. This is not merely another example of selling the family silver. Where frontier research is involved, it amounts to selling the family gold.
The Earl of Dundee: My Lords, I have listened carefully to the points made this evening by the noble Lords, Lord John-Mackie and Lord Diamond, and the noble Baroness, Lady Nicol. I am grateful to all of them for contributing to this debate. I should also like to apologise to the noble Lord, Lord John-Mackie, for being a moment or two late owing to the speed with which the previous business was taken.
I recognise the great interest which noble Lords have shown in this privatisation exercise. I am not sure whether that is the most elegant term to use. I do not know whether the noble and learned Lord, Lord Simon of Glaisdale, who initiated our recent debate on the English language, would have approved of that word, regardless of where he might stand on the issue of privatisation. I have also looked closely at the points made by noble Lords in earlier questions to me and to
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other government spokesmen. I feel bound to say that on some of the issues involved there will remain something of a difference of opinion. But I shall do my best to persuade the noble Lord this evening that there is perhaps rather less ground for concern in our proposals than at present he suspects.
In our previous discussions, and in response to Starred Questions on this matter, perhaps it is hardly surprising that government replies have focused on particular points which have been raised. Before responding in detail to such points this evening, therefore, I hope it may be helpful if I spend a few moments setting out more generally the position as the Government see it. In particular, I should like to explain why the Government have decided to privatise the NSDO and applied plant breeding at the PBI. I shall also describe what stage this operation has reached. Recognising some of the concerns that have been expressed, I shall outline what measures are being taken to provide safeguards where the Government believe these to be necessary. I hope that this will go some way to reassure those of your Lordships who remain in doubt.
What then are the reasons for privatisation in this case? First of course there is this Government's general policy and belief that in suitable circumstances publicly-owned concerns will function better if transferred to the private sector. I know that this general policy is not necessarily subscribed to by all your Lordships. I am also aware that some of your Lordships have deeply held views that the balance in our mixed economy is either about right as it is or else is already insufficiently weighted in favour of the public sector. This is not the time to debate the merits and demerits of a shift in the mixed economy in one direction or another; suffice to say that the Government continue to believe strongly in the advantages of further emphasis on the private sector and that this general belief forms the background to the question in our debate tonight.
I come now to the particular circumstances of the Plant Breeding Institute and the National Seed Development Organisation. Here we have two organisations, both operating successfully and both performing functions that could equally well be achieved within the private sector. However, let me make clear that this is not just my opinion or that of the Government alone. Before reaching a view that privatisation was the right course we examined very thoroughly the pros and cons. For this purpose we commissioned a leading firm of merchant bankers, Lazard Brothers, to undertake a feasibility study for us. Only after receiving that report, and studying it most carefully, did my right honourable friend the Secretary of State for Education and Science announce to Parliament the Government's intentions. Therefore, it is not only our belief in the private sector which has led to the present decision; it would not have been taken at all had it not been based on professional assessment of the issues involved. If this Government wish to be doctrinaire I dare say they would seek to privatise all plant breeding institutes. The Government have not been doctrinaire. This proposed transfer to the private sector is a selective decision and the reasons for it are soundly based.

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There are, therefore, very good grounds for holding the view that the NSDO and applied plant breeding at the PBI will be in a better position to flourish in the private sector than they can at present. Not that I am denying them their success—far from it—but I believe we can look forward to yet greater success for these two organisations after the privatisation than would be likely without it. In particular, despite its undoubted success, financial and otherwise, the PBI—with other AFRC institutions—has had to undergo some reductions in scale and operation because of changes in the priorities for science in the UK as a whole. There are of course wider issues involved here that are not for today's debate; but the facts again are clear.
The noble Lord, Lord John-Mackie, is right to question me on where matters now stand. He argues that there has been delay. I recognise that matters have taken a long time; but there are sound reasons for this. Briefly, and as I explained a moment ago, the first step in this operation was to examine the feasibility of our outline plans on the basis of advice from Lazard Brothers. That led to a Statement in July last year by my right honourable friend the Secretary of State for Education explaining the Government's intentions and stating that financial advisers were to be appointed to assist in the process. Once that step had been taken there was then an extensive range of matters requiring careful consideration and decision. Those involved both legal and financial questions of considerable complexity.
These are not matters which can be dealt with in a few days or weeks. If the interests of all those concerned are to be adequately protected, time and care has to be taken. Of course it is unfair on staff to protract the process unnecessarily and it is our concern not to do that; but this proposal in some respects breaks new ground and calls for the resolution of questions that are far from routine—not that that should be a cause of criticism either. However, the noble Lord will be aware that the process of clarifying the relative legal and financial positions of the parties to be involved in the new arrangements—PBI, AFRC, NSDO—has proved to be far from simple. One priority throughout has been the need to maintain and enhance the PBI strategic science which will stay in the public sector; yet I believe the major hurdles are now past.
As my right honourable friend the Under-Secretary for Education said in another place last week, we hope to issue the necessary information memorandum shortly offering the package for sale. Some of your Lordships will already be aware that details of this sale are to be made available to serious prospective purchasers through the issue of a full and detailed information memorandum. Our plan continues to be to complete the whole process of sale during the coming summer.
The noble Lord has raised in the past, and repeated this evening, a range of concerns about possible drawbacks to this exercise, some of which have been echoed by the noble Baroness and the noble Lord, Lord Diamond. Let me make one thing clear straight away. The Government will complete this privatisation only on the basis of an important proviso. That proviso is that it will be in the interests
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of the future operation of those elements to be privatised and in the interests of UK agriculture and the UK economy generally.
These are necessarily subjective judgments, but they can be taken on the basis of objective assessment of relevant factors; and it is our intention to ask all prospective bidders to submit information about their current marketing arrangements, their future expectations and their plans for the continued operation of the relevant parts of the PBI and the NSDO. The answers to these questions will enable us to judge whether the prospective bidders have the resources and the commitment to develop the business and hence also judge whether it is in the interests of UK agriculture. Yet we approach this process with an open mind. For that reason we shall certainly study carefully the various points put to us this evening and on other occasions about possible dangers of sale to one type of purchaser or another.
Your Lordships will, however, understand when I say that I cannot this evening give categorical assurances in any particular direction other than that the points made will not be overlooked. For example, some concerns have been expressed that sale to a foreign purchaser might not be in the interests of the UK. There may be grounds for that objection in some circumstances. However, there are numerous foreign firms active within UK agriculture—and, indeed, plant breeding—which are both long established and of considerable repute; so we shall not be ruling anyone out at this stage. What we shall be looking for, however, is a commitment to the UK market and to continuing plant breeding relevant to UK agricultural and horticultural conditions.
The noble Lords, Lord John-Mackie and Lord Diamond, questioned the advisability of selling. The noble Lord, Lord John-Mackie, made the point that there was plenty of evidence that what is proposed to be privatised is at present highly successful. I could not agree with him more. However, we believe that a private sector PBI/NSDO has the potential to be even more commercially successful than at present. In addition, it is government policy that the taxpayers' money should not be used to fund areas of work such as the breeding of finished varieties of cereal which the private sector is already funding.
Allowing the NSDO's profits to fund the PBI would be unlikely, to provide the substantial long-term investment and sense of direction necessary to make the most of FBI plant breeding and the NSDO. Making them a fully-fledged commercial organisation will ensure that investment is in line with future production and will bring added confidence and efficiency.
The noble Baroness, Lady Nicol, suggested that there would be various disadvantages affecting the staff who remain after privatisation. Indeed, she questioned the advisability of the move from Cambridge. I reiterate what I believe I said to the noble Lord, Lord John-Mackie, recently when I answered his Starred Question. Any AFRC staff made redundant before privatisation will receive the full redundancy or short service payments to which they are entitled under the AFRC superannuation scheme. Consultation with the trade unions would then take place. NSDO staff would also receive redundancy payments under a recently

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agreed job security agreement in the unlikely event of any redundancies before privatisation. In due course the staff required for the public sector will move mainly to Norwich but no move is anticipated before 1990.
The noble Baroness, Lady Nicol, also referred to the resignation of Professor Day, who is the director of the PBI, and to the loss of a number of staff. The impression of substantial resignations from PBI is misleading. I understand that the director, who is currently aged 58, has had 16 years' previous working experience in the United States and has now decided to return there to take up a prestigious new appointment. I am told that AFRC greatly regrets the loss of Professor Day who, of course, would have retired anyway within a year or two. During his eight years at PBI, the plant biotechnology programme has expanded considerably, attracting major financial support from industry.
Of the 64 staff who have left PBI in the past three years, half were voluntary premature retirements and redundancies and the others reflect natural turnover in a workforce of some 250 people. Over the same period 54 staff have been recruited to PBI, mostly on short-term contracts. Overall, these changes reflect a relative shift in the balance of work from plant breeding and crop science toward a growth in plant biotechnology.
I have endeavoured to explain the reasons for the Government's general policy and how it applies in the case of the NSDO/PBI privatisation. I realise that I may not have convinced the noble Lord, Lord John-Mackie, and maybe not other noble Lords, but I have done my best. I have explained where we have got to in this matter and how that has been achieved. I have looked ahead to the completion of the sale and to the future operation of the PBI and the NSDO. I believe that this sale, once completed, with hindsight will be seen to have been in the interest of those concerned and of United Kingdom agriculture as a whole. For that reason the Government will continue to press on toward a safe and successful completion of sale.
Lord Lloyd of Kilgerran: My Lords, before the noble Earl sits down, may I ask a couple of questions for clarification on the matters that he raised? I should like to know, if possible now but if not later, whether in drawing up their report Lazard Brothers consulted a number of technical advisers or whether this matter was dealt with purely on financial and economic grounds. The noble Lord said in general terms that it was necessary to deal with a number of legal and formal matters and that these questions were far from routine. Can the noble Earl, now or later, say whether, in proceeding toward what seems to me to be a somewhat disastrous conclusion, matters relating to intellectual property, patents and trade marks were considered as some of the legal problems concerned. In my last few words I ought to declare an interest in that I am an honorary Fellow of Selwyn College, Cambridge, and have been associated in a friendly but in no professional way with a number of staff at these institutions.
The Earl of Dundee: My Lords, I am grateful to the noble Lord for raising those points and I shall certainly write to him about them.
Lord Lloyd of Kilgerran: My Lords, I am much obliged to the noble Earl and apologise for not having given him notice of these questions.

University College London Bill [H.L.]
Committed to an Unopposed Bill Committee.
House adjourned at thirteen minutes past seven o'clock.