Lords Sitting of 12 December 1989

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Bradford.

Rabies: Quarantine Safeguards
Baroness Strange Baroness Strange asked Her Majesty's Government:
When they will end the anomaly of imposing a six-month quarantine on dogs entering the United Kingdom from a rabies-free area such as Cyprus which already imposes a six-month quarantine on dogs entering the island.
The Earl of Strathmore and Kinghorne: My Lords, there is no anomaly. The 1971 report of the Committee of Inquiry on Rabies considered the case for exempting from quarantine animals imported from countries, including Cyprus, which appeared to be free from rabies. The committee's conclusion and firm recommendation, which continues to form the basis for government policy, was that no exemptions to general quarantine requirements should be permitted.
Baroness Strange: My Lords, I thank the Minister for his courteous but not very encouraging reply. Is he aware that the Republic of Cyprus and also North Cyprus are both rabies-free areas, and both impose a six-month quarantine on all dogs entering the island? Does he not agree that to treat the island as a special case, like the Republic of Ireland, would cause great happiness to many expatriate Cyprus dogs and also their loving owners?
The Earl of Strathmore and Kinghorne: My Lords, our requirement for a six-month quarantine is our most effective safeguard. However, in principle we could consider free movement of animals on a reciprocal basis between rabies-free countries which impose identical import requirements, vaccination and contingency arrangements for controlling" an outbreak should one ever occur. We have that arrangement with the Republic of Ireland.

Pensioners: Earnings Rule Abolition
2.39 p.m.
Lord Rodney Lord Rodney asked Her Majesty's Government:
How many pensioners they expect to benefit in the first year from the abolition of the pensioners' earnings rule.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, approximately 400,000 existing pensioners immediately stood to benefit when the retirement pension earnings related rule was abolished on 1st
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October. This includes pensioners who had deferred their entitlement and continued working; those whose entitlement was reduced by earnings over £75 per week and those with earnings of less than £75 per week.
Lord Rodney: My Lords, I thank the Minister for that reply. Can he tell the House what steps the Government are taking to make old age pensioners and people who could benefit from those changes aware of the new conditions?
Lord Henley: My Lords, since 25th April all prospective pensioners have been advised of the intended abolition of the earnings rule. In addition, in June we wrote to some 400,000 people whom we believed might be affected. Of those, 275,000 responded and were sent claim packs. Since then 100,000 claims have been received and we expect further claims to come in.
Lord Carter: My Lords, while I congratulate the Government on the abolition of the earnings rule—something which we warmly welcome from this side of the House—the pensioners who benefit will be liable to tax. Can the Minister tell the House whether the Government propose any action to correct the situation whereby pensioners who pay tax are worse off compared to other taxpayers since 1984? Will the Government restore the situation which existed before 1984 so that pensioners who pay tax have the same relationship to other taxpayers which existed at that time?
Lord Henley: My Lords, I thank the noble Lord for his welcome of the abolition of the earnings rule. My understanding is that, as before, pensions would continue to be taxable. The noble Lord will have to wait for the Budget for any changes to the position of taxation of pensioners.
Lord Carter: My Lords, I do not believe that the noble Lord understands my question. The differential in favour of the tax paying pensioner was of the order of 34 per cent. compared to other pensioners, and is now only 24 per cent. It has gone down by a third in the past five years.
Lord Henley: My Lords, I fail to see what is the differential between the pensioner and non-pensioner.
Lord Carter: My Lords, perhaps the noble Lord will write to me, as I do not think he has understood my question.
The Viscount of Oxfuird: My Lords, can my noble friend tell us how much this will cost the Government in its first year of operation?
Lord Henley: My Lords, the estimated total public expenditure for 1989–90 will be £205 million, and for 1990–91 it will be £375 million.

Trade Figures: Accuracy
2.42 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
What reliance they place on the accuracy of the trade figures.
The Paymaster General (The Earl of Caithness): My Lords, while figures underlying the visible trade balance are fairly soundly based, figures for invisibles are less reliable.
Lord Peyton of Yeovil: My Lords, does not my noble friend think that it would be rather eccentric for the Government to continue to lend their authority to figures in which they do not have very much confidence? Will he particularly have in mind that it is the habit of some City commentators to pore over those figures rather like a Roman general of old pored over the entrails of a sacrificed chicken, and perhaps arrive at equally ill-founded conclusions?
The Earl of Caithness: My Lords, we have confidence in the visible balance. There is also the invisible balance, in the accuracy of which we have slightly less confidence. That makes up the current account balance. We then have to take into account the capital flows identified, which are large. In order to get the balance we have a balancing item, which is quite large. I believe that to be the reason behind my noble friend's Question. We are aware that this situation has led to some poring over the entrails, but I can reassure my noble friend that the Central Statistical Office and the Bank of England are working hard on this matter in order to get more accurate figures.
Lord Barnett: My Lords, however inaccurate the figures, can the Minister confirm that it remains the Government's policy to have those inaccurate figures in surplus some day? Indeed, is it not correct to say that the Government's policies are to reduce the amount to negligible if not nil proportions in order to get that surplus that the Government would wish to have? Can the Minister confirm that however long and painful it will be, and even if the efforts go beyond a general election, the Government will still wish to pursue a surplus on the balance of trade?
The Earl of Caithness: My Lords, we certainly would like to see an improvement in the current account deficit. I am sure that the noble Lord is aware of the good news regarding exports in the past year. We hope that next year's exports will also improve. In those circumstances the current account deficit should come down.
Lord Renton: My Lords, is it not true to say that even the invisible earnings figures are firm in parts because the earnings from banking and insurance are not merely estimates but are based on actual takings?
The Earl of Caithness: My Lords, my noble friend is right. Some parts of the invisible balance are more
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accurate than others. Interest, profits and dividends reflect on the capital, which is slightly less reliable.
Lord Orr-Ewing: My Lords, does my noble friend recall—or is he too young—that some 25 years ago a Labour Government actually won an election by bandying around a deficit figure of £800 million which we all had to fight on? When the true figure was published after the election had been won by Labour, the amount turned out to be £357 million. In those circumstances, the figure was doubly as bad in those days as it is now.
The Earl of Caithness: My Lords, I have to say that I do not remember the situation with quite the clarity that my noble friend does. Where figures are subject to revision, they are revised.
Lord Hailsham of Saint Marylebone: My Lords, did not Julius Caesar have the right way with sacrificial chickens?
The Earl of Caithness: My Lords, I cannot remember whether he did or not. I shall talk to my noble and learned friend about it later.
Lord Hailsham of Saint Marylebone: My Lords, he threw them into the sea.
Lord Bruce of Donington: My Lords, is the Minister aware that his confirmation of the general accuracy of the visible trade figures affecting this country and the outside world will certainly be well received? I am sure the noble Earl will agree that the figures are based on the trade and navigation returns, which in turn are derived from Customs and Excise. Generally speaking, I believe the figures are regarded by the Government as being accurate or reasonably accurate. Will the noble Earl confirm that we shall still receive figures from Customs and Excise despite any European legislation that might seek to require us to abolish this frontier requirement?
The Earl of Caithness: My Lords, I am grateful for what the noble Lord said about Customs and Excise for I have a special responsibility for it. I shall pass on the compliments of the noble Lord. He raised a very important point, because with 1992 matters will change. I can reassure the noble Lord that the European Commission is organising discussions on a replacement measurement system which could, for example, be linked to the control of VAT on inter-Community trade. Therefore we shall continue to have reliable figures.
Lord Peyton of Yeovil: My Lords, will my noble friend take note of the great satisfaction that we all register and the comfort we take from the fact that part of the accounts are good and reliable, in the same way as the curate's egg? Does the Minister agree that there is something amiss in accounts where the overall deficit is £14 billion and there is a balancing item as large as £12 billion? No auditor would sign accounts like that, or, if he did, he would go to prison.
The Earl of Caithness: My Lords, I admit that the situation is not what we would like it to be. That is why I hope that my answers have been slightly more accurate than the balancing item. I confirm to my noble friend that an enormous amount of work is being done by the Bank of England and the CSO to try to rectify matters for the future.

Traffic: Red Lights and Left Turns
2.48 p.m.
Lord Strathcarron Lord Strathcarron asked Her Majesty's Government:
Whether, in order to ease traffic congestion, they will introduce legislation to allow traffic to turn left at a red light having first stopped to see if the road is clear.
Viscount Davidson: No, my Lords. It would not be appropriate to introduce such a general dispensation. We are encouraging the installation of more sophisticated signal systems designed to optimise the capacity of signalled junctions. At appropriate junctions filter lanes can be introduced to aid left-turning traffic.
Lord Strathcarron: My Lords, is my noble friend aware that in America the system works with great success? Americans turn right because they drive on the right, and obviously we would turn left. The only disadvantage might be at pedestrian crossings. In that situation in America there is a sign which says, "No turn on red light". Does the Minister agree that such a system would be a very simple and cheap way of easing traffic congestion, which concerns us all?
Viscount Davidson: No, my Lords. I am afraid I cannot agree with my noble friend. There are fundamental differences between traffic signal junctions in the United States and the United Kingdom. In the United Kingdom, traffic signals use more sophisticated and more flexible control techniques. They are rarely used in rural areas. They are frequently deployed to give assistance to pedestrians and they often have to cope with higher traffic volumes. In the United States, traffic signals generally rely on simple fixed-time controls. They are often used in rural areas, and roundabouts are rare. They frequently handle relatively low volumes of traffic and they can often be laid out with more space and better visibility. The short answer is that my noble friend's suggestion would not be suitable for the traffic conditions of the United Kingdom.
Lord Underhill: My Lords, much as we admire the experience and the motor cycling skill of the noble Viscount, is this not one case where he believes that everyone is as good and as cautious a driver as he is? If pedestrians on a traffic light controlled crossing see the traffic moving one way, they may believe that they can safely cross over where the lights are red. Is it not frequently the case that traffic in one lane turns left to the danger of pedestrians? This is what I encounter almost every day when I walk past traffic lights in my own area.
Viscount Davidson: My Lords, I agree entirely with the noble Lord, Lord Underhill. Pedestrians seeing a gap in oncoming traffic might start to cross, not realising that a left turning vehicle from another approach was about to move. There is also a danger of increased vehicle accidents owing to misjudgments by left turners.
Lord Swinfen: My Lords, will the Government consider doing away with the red and amber signal before the green signal? This would prevent traffic moving off on that signal, which causes many accidents.
Viscount Davidson: My Lords, that is another question. I did not realise that many accidents had been caused in that way, but I shall look into it.
Lord Molloy: My Lords, is the noble Viscount prepared to consider specific examples? One cannot take the United States as a whole because practices vary from state to state. If he cares to study what happens in San Francisco and in the city of New York, and in Hamburg and Dusseldorf in West Germany, he may discover that there is a great deal of sense in the suggestion of the noble Lord, Lord Strathcarron. In certain circumstances, though not all, we could adopt this proposal.
Viscount Davidson: My Lords, for once I must agree with the noble Lord. There are differences in different states of the United States; and there are differences in Europe. But I still say that the system proposed for the United Kingdom would not be suitable. There are obviously some arguments for filtering to the left. However, to be effective there would need to be adequate lengths of road to store waiting traffic and possibly provision for acceleration lanes around the corner. But we are looking into that where it is possible.
Lord Borthwick: My Lords, is the Minister aware that that system of traffic control is used in Scotland today?
Viscount Davidson: I do not think that I am, my Lords. Perhaps my noble friend will let me know more about it.
Lord Glenamara: My Lords, is the noble Viscount aware—he is not aware so I shall tell him—that I have recently driven almost 4,000 miles in the United States in a number of different states. I can confirm what the noble Lord, Lord Strathcarron, says. The suggestion is admirable. It works perfectly well in the United States and it would work perfectly well here.
Viscount Davidson: My Lords, I agree that it works perfectly well in the United States. I have driven in San Francisco and parts of other states. But I do not believe that it would work perfectly well here.
Lord Orr-Ewing: My Lords, will my noble friend look at the present system in London whereby all red lights stop all traffic, even long after dark when there are no pedestrians around? Surely, traffic

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would flow much more easily if pedestrian buttons were available when someone wanted to cross safely. At the moment everything is stopped even when there are no pedestrians. This slows up traffic totally unnecessarily.
Viscount Davidson: My Lords, that again is another question, but I shall certainly look at it.
Lord Jenkins of Putney: My Lords, is the noble Viscount aware that, perhaps unusually, quite a number of noble Lords on this side of the House agree with him?
Viscount Davidson: Well, my Lords, I wonder whether I am right.

Business
2.54 p.m.
Viscount Long: My Lords, after the Second Reading of the Criminal Justice (International Co-operation) Bill, my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the European Council in Strasbourg. This will be followed by my noble friend Lord Brabazon of Tara who will, again with the leave of the House, repeat a Statement on the Vietnamese boat people.

Committee for Privileges
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That in accordance with Standing Order 73 the Committee for Privileges be appointed and that as proposed by the Committee of Selection the Lords following, with the Chairman of Committees and any four Lords of Appeal, be named of the Committee:

Allen of Abbeydale, L.

Belstead, L. (L. Privy Seal)

Campbell of Alloway, L.

Cledwyn of Penrhos, L.

Denham, L.

Ferrers, E.

Glenamara, L.

Hylton-Foster, B.

Jenkins of Hillhead, L.

Mowbray and Stourton, L.

Ponsonby of Shulbrede, L.

Shackleton, L.

Stedman, L.

Strabolgi, L.

Wigoder, L.

—(The Chairman of Committees.)

On Question, Motion agreed to.

Procedure of the House: Select Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Select Committee on Procedure of the House be appointed and that as proposed by the Committee of Selection the Lords following, with the Chairman of Committees, be named of the Committee:

Ackner, L.

Allen of Abbeydale, L.

Beaverbrook, L.

Belstead, L. (L. Privy Seal)

Boyd-Carpenter, L.

Caithness, E.

Cledwyn of Penrhos, L.

Denham, L.

Elton, L.

Ferrers, E.

Graham of Edmonton, L.

Havers, L.

Hayter, L.

Hylton-Foster, B.

Jacques, L.

Jenkins of Hillhead, L.

Mackay of Clashfern, L. (L. Chancellor)

MacLehose of Beoch, L.

Murton of Lindisfarne, L.

Nugent of Guildford, L.

Ponsonby of Shulbrede, L.

Serota, B.

Shackleton, L.

Stedman, B.

Stoddart of Swindon, L.

Tordoff, L.

Williams of Elvel, L.

—(The Chairman of Committees.)

On Question, Motion agreed to.

Criminal Justice (International Co-operation) Bill [H.L.]
2.55 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, I beg to move that the Bill be now read a second time. The Bill should help international co-ordination against the activities of criminals. I think it was John Donne who once said "No man is an island". Perhaps if he were around today, contemplating modern means of travel and communications, he might be tempted to say "No island is an island".
Certainly, the criminal fraternity has realised that the ability to hop from state to state and to operate across national boundaries can be turned to its advantage. Legend has it that Dick Turpin rode north furiously from London in order to try to avoid being brought to justice for a crime which he had committed. In 15 hours he had reached York. Today's criminals can fly virtually anywhere in the world in less time—and to most places in a matter of hours. Clearly, if the forces of law and order are

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to be able to respond effectively to the growing menace of international crime in all its manifestations, it is vital that there should be the fullest possible measure of international co-operation between them.
In recent years we have taken a number of steps to improve co-operation with other countries in the fight against crime. The Drug Trafficking Offences Act 1986 contained provisions enabling our courts to freeze and to confiscate the assets of drug traffickers. It also enables the courts to give effect to orders which are made by courts from other countries. To that effect, we have already concluded agreements or arrangements with 11 countries and more agreements are in the process of being negotiated.
The Criminal Justice Act 1988 extended these provisions beyond the area of drug trafficking into serious crime. It is encouraging that, in this aspect of the fight against crime, we have been able to offer a lead to the international community.
The second area of our law which has been changed significantly in recent times concerns extradition. The extradition provisions of the Criminal Justice Act 1988, which were consolidated into the Extradition Act 1989, modernised our extradition law. In particular, they made it much easier for us to respond to extradition requests from other countries, principally those in Europe which have a different legal system from ours. These are important and valuable changes.
The Bill now before your Lordships improves international co-operation yet further in two distinct areas. Part I is concerned with what is known as mutual legal assistance. This is the term applied to the procedures by which states co-operate with each other in the investigation and prosecution of criminal offences. Valuable means of international co-operation already exist at an informal level. Interpol, for example, performs an important function in fostering the effective exchange of information and intelligence between police forces around the world. Arrangements for co-operation between Customs services are of enormous value, particularly in the fight against drug trafficking.
The Bill will not affect arrangements such as these in any way. It is concerned instead with co-operation of a different kind—when it is necessary to use compulsory powers to obtain evidence or when court proceedings are actually under way. Over the years, there has developed a broad international consensus on what is meant by mutual legal assistance, and what kind of measures the term covers. This is contained in the European Convention on Mutual Assistance in Criminal Matters which was drawn up between the member states of the Council of Europe and in the Commonwealth scheme on the same subject.
Mutual assistance may involve providing written evidence for use in court proceedings in another country; serving judicial documents to a person on behalf of another country; making arrangements for the attendance of witnesses at hearings abroad (including those who are serving prison sentences); tracing witnesses and suspects; and searching
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for—and seizing—material which is required for use in overseas proceedings.
Some of those measures we can already implement. For example, we can respond to requests from other countries for help in tracing witnesses and suspects. In other areas, though, our legislation is either lacking or prevents us from responding helpfully to requests from overseas. For example, we cannot at present require people to give evidence in this country in an overseas case unless court proceedings are already pending in a foreign court. This makes it impossible for us to respond to requests from abroad for assistance in obtaining evidence as part of the investigation of an alleged offence. Without the evidence which may be in this country, it might be impossible for the overseas authorities to institute court proceedings. Yet until such proceedings have been instituted, we cannot at present provide the evidence. It is this situation that has led one overseas wag to comment somewhat ungraciously, "The United Kingdom can give us evidence in any case in which we already have evidence".
The deficiencies in our present legislation have, I regret to say, earned us a poor reputation for co-operation over mutual assistance. Our inability to assist other countries does not just damage our international reputation. It also damages our ability to obtain assistance from other countries. Many other countries are only able to provide help on a reciprocal basis—that is to say, they can help us only if we would be able to help them in a similar situation.
Our inability to give assistance to other countries has consequently meant that our prosecuting authorities have encountered serious difficulties in obtaining from overseas evidence which was crucial to cases which were being investigated in this country. Part I of the Bill will put this situation right. It fills the gaps which at present exist in our legislation, and it will enable us to seek—and to provide—the full range of assistance which is often needed.
Clauses 1 and 2 specifically make provision for summonses and other judicial documents of other countries to be served on individuals in the United Kingdom and for such documents, which are issued by our courts, to be served overseas under reciprocal powers. By virtue of Clauses 3 and 4 our courts will be able to request that evidence should be taken overseas for use here, both when proceedings have been instituted and at the investigating stage. And we shall be able to meet similar requests from other countries.
Clause 5 will make it possible for us to transfer United Kingdom prisoners abroad in order for them to give evidence in overseas proceedings or to assist with investigations there. By the same token, under Clause 6 we will be able to receive prisoners from abroad in order that they may be able to give evidence in cases here—a very important source of evidence which we have, up to now, been unable to tap.
Clause 7 enables our police to seek authority to search for, and to seize, evidence in respect of cases

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which are under investigation overseas in similar circumstances to those in which such powers would be available in a case here. By virtue of Clause 8 we shall be able to enforce orders which are made in overseas courts for the forfeiture of items which are used in the commission of serious offences; for example, a getaway car which might have been used in a bank robbery.
Three principles have guided the Government's approach to the preparation of these provisions. First, having recognised the inadequacies of our existing legislation, we have been determined to secure arrangements which will place us in the first rank internationally in our ability to co-operate with other countries in this most important of areas.
Secondly, we have sought to ensure that, once the measures which are proposed in the Bill have been enacted, we will be able to seek assistance from other countries to just the same extent, and in the same ways, as we are able to offer help to them.
Thirdly, we have been conscious that, however much we may wish to assist other countries, we cannot ask Parliament to make greater powers available on behalf of overseas authorities than are available to our own police or prosecution authorities in domestic cases.
I think that the result of these three principles has been to produce a Bill which I hope will receive the support of your Lordships. If the Bill is enacted in due course, the provisions which are contained in Part I will enable us to ratify the European Convention on Mutual Assistance in Criminal Matters. This is a step which will be widely welcomed among the international community.
I turn now to Part II of the Bill. The purpose of this part is to make the legislative changes which are necessary in order to enable the United Kingdom to ratify the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. This convention—which is known for the purposes of the Bill as the Vienna Convention—was adopted in Vienna on 20th December by a plenipotentiary conference which was attended by representatives of 106 states. On the following day, together with representatives of 42 other states, I had the honour of signing the convention on behalf of Her Majesty's Government.
The convention represents a major advance in the fight against the evil men who produce, manufacture and distribute drugs, and who thereby corrupt society. It provides a comprehensive range of measures which parties are obliged to adopt in order to penalise trafficking and to co-operate more effectively with each other in combating this, the most international of criminal activities.
The convention will come into force after 20 countries have ratified it. To date only the Bahamas, China and Nigeria have done so, although the number of countries which have signed the convention has risen to 75. There is a genuine desire on the part of the international community to bring the convention into force at the earliest possible date. In the meantime, while they are preparing legislation such as this, most countries are doing
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their best to implement the spirit of the convention within their existing law.
For your Lordships' convenience, we have prepared an explanatory memorandum which contains the text of the convention and describes our proposals. The memorandum is in the Printed Paper Office. Your Lordships will see that the convention is a very practical instrument.
The convention provides a code of criminal offences which extends the penal provisions contained in the earlier United Nations conventions on narcotic drugs and psychotropic substances so as to embrace all forms of trafficking. It also provides a framework of judicial and practical measures which are designed to facilitate the task of law enforcement agencies in detecting traffickers and their activities and in bringing them to justice. The judicial measures include confiscation of the assets of drug traffickers—a most powerful weapon which is already provided for in this country's law under the Drug Trafficking Offence Act 1986.
Comprehensive arrangements for extraditing offenders and a code of mutual legal assistance provisions are also included. The practical measures include arrangements for the controlled delivery of consignments of goods which are found to contain drugs with a view to identifying the principals who are involved in the traffic. Arrangements designed to prevent the diversion of chemical substances, which are necessary for manufacturing drugs, are also included as are measures to combat illicit traffic by sea and by mail.
The convention also urges parties to preserve and to enhance more informal measures of co-operation, especially in the areas of intelligence sharing and training, and in providing assistance to the authorities of states where drugs are produced or through which they pass on their way to other countries.
I am glad to say that our law and working procedures already enable the United Kingdom to apply many—if not most—of the requirements of the convention. There are, nevertheless, several gaps. Part II of the Bill is intended to fill those gaps. As presently drafted, the Bill makes the changes in legislation which are needed in order to enable us to implement those of the convention's requirements which relate to mutual legal assistance and to the control and monitoring of precursor and essential chemicals.
I have already described the mutual legal assistance provisions. I will, if I may, describe the precursor chemical provisions in a moment. There are, however, several other areas where legislation is needed in order to enable us to ratify the convention. First, we need to extend the circumstances in which handling the proceeds of drug trafficking is an offence.
Secondly, the court must be empowered in certain circumstances to order the uprating of orders for the confiscation of the proceeds of drug trafficking. Thirdly, there must be power to authorise the boarding and searching in international waters of vessels which are suspected of being engaged in drug trafficking; and, fourthly, we need provisions for the

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extradition of suspected drug traffickers where no general extradition arrangements exist.
I regret that it has not been possible to include those provisions in the Bill as introduced. The Government had originally planned that this would be a short Bill designed merely to make the changes in respect of mutual assistance which appear in Part I.
We subsequently decided, and I hope that your Lordships will agree, that it would be prudent to take the opportunity of this Bill to make the necessary changes in order to enable us to ratify the Vienna Convention. Those are unfortunately technically very difficult issues, and I am afraid that the preparation of the necessary clauses has proved a more complex task than we had anticipated. We were therefore faced with the difficult decision of whether to leave these provisions out altogether, and thereby delay ratification of the convention, or to proceed with a Bill in the form before your Lordships, in the knowledge that Government amendments will be required to make it complete.
We decided on the latter course, and I hope that your Lordships will think that we were right. I acknowledge that it is not an ideal way to proceed, and I hope that your Lordships will acquit me of any discourtesy to the House in producing a Bill in such a fashion. We have, though, attempted to minimise the inconvenience for your Lordships by the preparation of the memorandum on the Vienna Convention, which describes in some detail the legislative changes which we shall be proposing in response to it. I hope that that document, together with the amendments themselves, which I hope to table in the next few days, will help your Lordships to see what we have in mind.
Perhaps I may say a word or two about the material relevant to the Vienna Convention, which we have been able to include within the Bill; that is to say, the provisions relating to the control of precursor and essential chemicals which appear in Clauses 11 to 14. The substances, which are listed in Schedule 2, comprise two separate groups. The first is precursors which are essential chemicals for the manufacture of certain controlled drugs. The second is other chemicals which are used as reagents or solvents in the manufacturing process; because many of those chemicals are widely used by industry, it is impracticable to control them strictly by, for example, a licensing system.
Since 1971 we have, in the United Kingdom, operated a voluntary system whereby companies which manufacture and supply these chemicals have been encouraged to draw to the attention of the police and of the Home Office drugs inspectors details of any suspicious orders or transactions. The information which has been provided has led to the detection of many clandestine laboratories in the United Kingdom and overseas. We are most grateful to the industry for its co-operation. Because the system has worked well, we wish to use it as a basis for the procedures which are needed to implement Article 12 of the convention.
Clause 11 makes it an offence for any person to manufacture a substance which is specified in
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Schedule 2 or to supply such a substance to another person where he knows or suspects that the substance is to be used for the unlawful production of any drug which is controlled under the Misuse of Drugs Act. It also provides a procedure, which is exercisable by Order in Council, whereby substances may be added to or deleted from Schedule 2 or transferred from one table to the other.
Clause 12 establishes a regulation-making power (which is backed by criminal sanctions) to enable the enforcement authorities to obtain from the chemical companies the intelligence information which they need to trace clandestine laboratories. The regulations will also provide for documentation, record-keeping and the labelling of consignments.
Clause 13 applies certain provisions of the Misuse of Drugs Act 1971 in relation to offences which are committed under Clauses 11 and 12. For example, it will provide enforcement officers with powers to enter premises and to demand the production of records and stocks of scheduled substances.
Clause 14 extends the definition of "drug trafficking" contained in the Drugs Trafficking Offences Act 1986 and the corresponding Scottish legislation so as to include the offence which is provided by Clause 11.
If your Lordships give the Bill a Second Reading, we shall table the amendments, together with descriptive notes, to give effect to the additional convention provisions as soon as possible. In the debate on the loyal Address in another place, the Leader of the Opposition signalled that the Bill was one which he thought his party would be able to support. In doing so, he demonstrated the degree of consensus which exists on the importance of fighting international crime and drug trafficking, and, if I may say so, I believe that that is very important.
The Bill is indeed a measure of the importance which Her Majesty's Government attach to co-operating internationally in the war against those who have come to be called "the drug barons". We played a leading role in the negotiations which led to the adoption of the Vienna Convention, and we are active participants in the United Nations and European drugs fora.
Next April we shall be hosting in London a conference called "The World Ministerial Summit to Reduce the Demand for Drugs and to Combat the Cocaine Threat". That important conference will meet under the chairmanship of my right honourable friend the Home Secretary. The opening ceremony will be performed by my right honourable friend the Prime Minister. She will be joined for that occasion by President Barco of Colombia and the Secretary-General of the United Nations, Senor Perez de Cuellar. We very much hope that that conference will have a practical outcome, and that it will prove to be yet another important success in the battle against the terrible scourge of drugs.
The Bill is, I hope, an uncontroversial one and one which I trust will command support from all sides of your Lordships' House. It is a simple measure. It will not solve the problem of international crime, but it will be one more

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important weapon in our armoury in the fight against it.
I started my speech with a reference to Dick Turpin. Perhaps I may end with him too. Dick Turpin rode to York to avoid being brought to justice. He failed. He was brought to justice. As your Lordships will no doubt recall, he was hanged at York in 1793 for horse stealing. In this country, at least, drug traffickers may not find themselves suffering quite such a controversial and disagreeable penalty as did Dick Turpin, but the Bill will, I hope, make it just that much harder for today's criminals, however far and fast they flee, to evade justice. I commend it to your Lordships.
Moved, That the Bill be now read a second time.—(Earl Ferrers.)
3.17 p.m.
Lord Mishcon: My Lords, the noble Earl the Minister with his, as ever, attention to lucidity, was gracious enough to let me have a copy of the memorandum with regard to the Bill to which he referred. I am deeply grateful to him for also supplying me with Notes on Clauses. I hope that I have responded correctly to that courtesy by giving him notice of the various questions which arise from a perusal of the Bill. Let me at once say what I believe is superfluous: that all conceivable co-operation will come from these Benches on matters of criminal investigation and trials on an international basis. All conceivable co-operation too will come from these Benches, as I believe it will from every section of your Lordships' House, when it comes to combating what I can only refer to as the murderous trade of drug trafficking.
One word, if I may, before we look at Part I. It is brought into the same measure as drug trafficking, but deals with international arrangements with regard to criminal matters generally. That is all right on this occasion because the matters referred to in Part I are, as I see them, generally acceptable. However, I believe it is a rather dangerous precedent to have a Bill dealing generally with criminal evidential matters and other matters of that kind, together with a measure—even if it be in a separate part of the Bill—dealing with offences which the House regards as deeply objectionable and dangerous.
The reason I say that is that we can be tempted, because of our hatred of the trade of drug trafficking and our anxiety to bring to justice those who traffic in drugs, to pass into our general criminal law matters which should be specific to drug trafficking. I refer to unusual measures which we have taken in our statutes up till now to deal with that menacing trade.
In these days of international crime it is extremely important that we should be seen as the country that offers co-operation and in return receives co-operation in order to apprehend those who deserve to be brought before criminal courts. We have no difficulty at all in dealing with that aspect of the matter.
However, some questions arise. As I understand it from a Home Office discussion paper on
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international mutual assistance in criminal matters, it was suggested—indeed recommended—that there should be a central authority which would act as a clearing house for the receipt of formal requests going one way or the other. I, and I imagine other noble Lords, should like to know whether that central authority idea which is so necessary, as we see it, will be created. If so, what measures have already been taken to create it? If the central authority is to be set up can we have confirmation that assistance on evidentiary matters, the taking of testimony and so on, will be available to the defence as well as to the prosecution? That is particularly necessary when we deal with questions of tracing evidence where those who act for the defence are in as much difficulty in trying to see that justice is done as those who act for the prosecution.
Will those who are arrested in this country for offences committed abroad be able to receive the benefit of legal aid? It is obviously just that they should, if we are taking part in the arrest and in sending over the results of search warrants and the arrest. Will they be entitled to legal aid? That applies I suppose not only to those who are subject to arrest, but to those who will be potential witnesses as a result of the international procedures and the taking of evidence from them. Will they be properly advised or have available to them legal advice under our scheme?
Are we quite sure that we too will receive mutuality on such matters? Will British subjects abroad receive the legal assistance and legal aid that we ought to secure for those who are in foreign countries and who will to some extent have their liberties curtailed or their responsibilities in law made graver as a result of the procedures under the Bill?
My next question is this. In the case of destruction orders, what happens if mistakes are made? What happens if a mistake is made on one of those and property is wrongly destroyed, as it turns out, as a result of a request or an order from a foreign land? What happens if a mistake has been made regarding an arrest or a search warrant? Is compensation payable? If so, by whom? Will there be an undertaking by a foreign country that compensation will be paid by it if a mistake has been made? Or will it fall upon the mercy, compassion and sense of justice of our own Government?
I turn now to Part II. As your Lordships have heard, the Bill enables us to ratify the Vienna Convention. To look at the gravity of the matter with which we are dealing in the second part of the Bill, I turn to paragraph 20, page viii, of the report which has just been made by the Home Affairs Committee. It is the Seventh Report of another place, Drug Trafficking and Related Serious Crime. Perhaps noble Lords will allow me to read a short part of that report. Paragraph 20 says:
"The National Drugs Intelligence Co-ordinator estimated that there is at least £1,800 million derived from drug trafficking in the United Kingdom. In its written memorandum, the NDIU—"
that is the abbreviation for this co-ordinator—
"noted that such vast amounts of money circulating within the legitimate banking system may have a destablising effect on smaller financial institutions. The NDIC also indicated that, despite the Drug Trafficking Offences Act 1986, the United Kingdom continued to be a major centre for money laundering.

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Indeed, he said that the United Kingdom was 'regarded by the United States, Canada and some others as an offshore banking system'. These comments give added importance to our discussion of the effectiveness of legal measures against money laundering in section V below".
I do not think that I have to quote anything other than that in order to accentuate the serious dimensions of the problem within the United Kingdom. I ask this question not only of the United Kingdom and its Government but of the whole of the United Nations in dealing with urgent matters of this kind. I wonder why there are these dreadful delays. Your Lordships may share that wonder. It was in 1984 that the United Nations General Assembly dealt with the international dimensions which they regarded as being most serious, and instructed the commission to prepare a draft convention. I repeat, that was in 1984. In August 1987—it took three years—the first draft was circulated. The plenipotentiary conference to which the Minister referred took place in Vienna in December 1988. That was well over a year after the first draft. The first draft was not circulated until three years after the setting up of what I would call the emergency resolution and instruction.
As your Lordships have heard, this convention only becomes effective some 90 days after the deposit of the 20th instrument of ratification, and only three countries have ratified. The United Kingdom is not yet one of them, but presumably will be if this Bill is carried into an Act. In 1984 and in 1989–1989 is just passing away—the United Nations declared this as an urgent international matter. I ask the Minister what is wrong with the machinery in the United Nations which allows a matter of this international urgency still to await effectiveness in the sense that ratification is there only on the part of three countries at the end of 1989, and yet 20 countries have to ratify before this measure becomes effective.
It is true that we have been effective in the legislation that we have passed so far regarding the Misuse of Drugs Act 1971 and the regulations passed under that Act, and the Drug Trafficking Offences Act 1986. I ask the Minister with deep respect—he knows I always have deep respect for him—that with the draft convention before the United Kingdom some time ago and with our own experience of having passed two Acts dealing with drug trafficking, are we not entitled to expect that by this time our own government would have been able to decide what offences to put into Part II of the Bill in order to obtain effective international co-operation? Instead of that, the Explanatory Memorandum states at paragraph 1.2:
"The amendments to give effect to the remaining provisions which require legislation will be tabled very shortly".
The Minister said there was some difficulty in wording these offences, but here we are on Second Reading giving approval, as we undoubtedly shall, to a Bill where vital matters are not before us but will be tabled after Second Reading. I shall not repeat the dates involved because I do not want to sound like a gramophone record. However, if I am starting to sound like a gramophone record, the needle is scratching a rather painful matter and it is a matter
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which at least deserves to be answered. I ask the Minister why we do not have a full Bill in front of us.
In case your Lordships feel there is nothing very vital in the amendments to be put before us, I must quote from the report of the Home Affairs Committee of another place, to which I referred before. I hope your Lordships will forgive me if I read from the report. I wish to mention particularly paragraph 80 and some subsequent paragraph. Paragraph 80 states:
"The difficulties in securing convictions for money laundering offences raise the question of whether changes to the law are required. In the light of the dangers in Britain being perceived in North America as 'an offshore banking system' referred to by the NDIC, we asked the Bank of England and the Committee of London and Scottish Bankers how they believed the law against money laundering could be strengthened. We were extremely concerned that neither body, with their considerable combined expertise of the financial world, were able to propose any changes to the law in response to the scale of the threat facing the financial system".
I wish to ask the Minister whether there is any more co-operation yet. Are the Government as disappointed as the committee of another place was at the lack of co-operation and practical ideas? Paragraph 82 states:
"In any case, amendments to the Drug Trafficking Offences Act 1986 will be required to enable the United Kingdom to ratify the 1988 UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. The opportunity could be taken in framing the amending legislation to introduce other desirable amendments to the law in relation to drug trafficking. One possible change would be a shift in the burden of proof".
I shall not read any more because the recommendation is that we do not alter the burden of proof. However, I shall now quote from paragraph 83 that states:
"The possibility of a significant but less controversial change was drawn to our attention by the US Customs Service during our visit to the United States. They pointed out that in the United States the crime of money laundering involved concealing the source or origin of money derived from unlawful activity, whereas in British law the offence has to be traced to a particular unlawful act. This fact is the cause of some of the difficulties in the prosecution of persons for money laundering offences referred to in paragraph 79 above".
The evidence was given to the Home Affairs Committee quite a time ago. The United States representations were made quite a time ago. Will this offence be introduced in the Bill, and why is it not in front of us on Second Reading?
3.37 p.m.
Lord Mancroft: My Lords, I rise with some trepidation to find that I am the only Back-Bencher who has been rash enough to put his name down to speak. I am however delighted that the noble Lord, Lord Harris of Greenwich, is speaking as I was somewhat fearful that I would be the only slice of ham sandwiched between the oratorical giants: the noble Lord, Lord Mishcon, and my noble friend Lord Ferrers.
I commend the Government for the speed with which they plan to insert in this Bill the necessary clauses which enable us to join with our friends and allies in further hampering the financial laundering activities of international drug traffickers. This shows the seriousness with which the Government view the problem. I noted too that last year about

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£11 million was confiscated. That is of course encouraging. However, Detective Superintendent Todd at the Central London Drug Squad told the all-party committee on the misuse of drugs in March this year that official estimates of the value of illegal drugs coming into this country in 1988 was, as the noble Lord, Lord Mishcon, said, about £1.85 billion. He said that the cost of drug-related crime in London and the South-East was running at about £1.2 billion each year. That is after 10 years in which drug squads have increased in size and budget; in which Customs officers have more than doubled in number; during which officers have been stationed in Pakistan, India and South America; and in which the International Drugs Intelligence Unit has been set up.
The conclusion is an obvious one. We live in a demand-led society. I have read—although I was not around to verify it—that it was possible to buy the very best French brandy in London throughout the entire course of the Napoleonic Wars. Times of course have not changed. If there is a demand for a commodity, whatever the obstacles placed in the way and however illegal the commodity may be, someone will supply that commodity.
Our American friends have learnt that lesson and we must learn it too before it is too late. The only way to deal with the drug problem is to try to cut demand. That means providing treatment for existing addicts and education and prevention programmes to deter new ones. In the USA there are now 8,000 treatment centres, and they produce results. In Britain there are 25. I know a little about them because I am a trustee of one and a director of another. There is also a hotch-potch of largely ineffectual detoxification centres and, within the National Health Service, some old-fashioned psychotherapy units which do not work.
The Government must realise that the drug problem is not in Colombia or Pakistan or hidden in onshore or offshore bank accounts. It is here at home, in our cities, towns and villages. We shall not deal with what President Bush has called the greatest threat to Western civilisation in the twentieth century by changing the international banking laws.
The forthcoming conference mentioned by my noble friend is to be welcomed. But what we need is specialist treatment centres, specialist counsellors and specialist teachers; and we need them now.
3.41 p.m.
Lord Harris of Greenwich: My Lords, we on these Benches welcome this Bill unreservedly. Both conventions, which the Bill will enable us to ratify, are of central importance in the battle against international crime and in particular against the sophisticated criminals involved in the illicit narcotics industry.
The Bill is also welcome for another reason, which was touched on by the noble Lord, Lord Mishcon. It gives Parliament the opportunity to discuss what progress has been made since the passage of the Drug Trafficking Offences Act 1986.
No one who has had the opportunity, as I have in the relatively recent past, to look at the drug situation both in the United States and in Colombia could
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doubt the gravity of the situation for the whole of Europe. This is not a unique problem for the United Kingdom.
Not only do cocaine and heroin destroy thousands of lives, but the profits generated by that huge industry are used both to threaten and to corrupt law enforcement officers. We have seen the consequences recently in Colombia, where many men and women in the law enforcement community have been murdered. Judges, policemen, soldiers and their wives and families have been killed by representatives of that massive industry. Unhappily, others have succumbed to blackmail or financial inducements. The power of the drug traffickers is so overwhelming and their arrogance so complete that fairly recently they offered to pay off a substantial proportion of the Colombian national debt if they were left alone.
In the United States, where the scale of the problem remains infinitely more serious than in Europe, a large and powerful law enforcement organisation has been established to counter the activities of the drug traffickers. Yet during a recent visit to the United States, where I had the opportunity to discuss the matter with a number of senior police officers and representatives of the Federal Government, I found that few believed that they were winning the battle. In Europe too there is very little evidence that we are yet succeeding.
Consider for a moment the scale of the problem faced in the United Kingdom. The heroin and cocaine seized by Customs and Excise in the first nine months of 1986 had a street value of £41 million. The following year, 1987, the value was £72 million, and in the first nine months of this year the value of heroin and cocaine seizures came to £117 million, a rise of well over 50 per cent. in two years.
But of course Customs intercept only a fraction of the illicit drugs destined for the United Kingdom market. In the United States, Customs estimate that they succeed in intercepting about 10 per cent.; others believe that that is a fairly significant overestimate. Let us assume for a moment that we intercept in the region of 10 per cent. There is not a great deal of evidence to suggest that we intercept any more. That means that so far this year drugs—heroin and cocaine—with a street value of approximately £1 billion have entered the United Kingdom. That demonstrates the immense resources available to the criminals involved in the industry. It is in that context that we are discussing this Bill this afternoon.
I propose to discuss two matters today—that touched on by the noble Lord, Lord Mishcon—namely, the report published last Thursday of the House of Commons Home Affairs Committee—and some of the issues which arise directly from the Bill.
I recognise that the Government will require time to consider the Home Affairs Committee's recommendations. However, as the noble Earl will realise, a number of them will have direct implications for this Bill. Others raise significant questions concerning the operation of the Drug Trafficking Offences Act 1986. Without that, we

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should not be in a position to ratify the Vienna Convention.
When that Bill was debated in this House I welcomed it, as did the noble Lord, Lord Mishcon. I believe that there was unanimous support for the Bill from all quarters of the House. It was an innovatory piece of legislation and problems were bound to arise. But the scale of those problems is deeply disturbing.
I find it a matter of concern that although the 1986 Act makes confiscation mandatory after any conviction in a Crown Court for drug trafficking—the noble Earl, Lord Ferrers, referred to that as a poweful weapon, and I agree with that description—according to the criminal statistics for 1988 in only one case out of every six (in 539 cases out of 3,469) is such an order made. Why is that so? I find that a quite extraordinary statistic. It means that last year the new law was ignored by the courts in 83 per cent. of the cases that came before them. That is a matter of significant concern which I hope will be an issue that will be discussed between the Home Secretary and the Lord Chancellor.
Secondly, I think we must all be very disappointed that until May this year only some £22 million had been frozen by the courts, of which £11 million was confiscated. Yet as the noble Lord, Lord Mishcon, reminded us a few moments ago, the National Drugs Intelligence Co-ordinator estimates that the drug traffickers' assets in the United Kingdom amount to £1,800 million. In other words, up to May we succeeded in confiscating less than 1 per cent. of those assets. In my view that is a deeply worrying figure.
Clearly, in the context of that situation a great deal remains to be done, and speedily. Yet so far there appears to be a depressing degree of complacency in the banking community, to take just one example, about our existing arrangements. The Home Affairs Committee said, as the noble Lord, Lord Mishcon, reminded us, that the difficulties in securing convictions for money laundering offences raised the question of whether changes in the law were required. However, as we were reminded, when those issues were put to them neither the Bank of England nor the Committee of London and Scottish Bankers felt able to give any positive responses.
The Home Affairs Committee said:
"If bodies such as the Bank of England and the Committee of London and Scottish Bankers are as passive as appears to be the case in responding to the significant threat facing financial institutions from money laundering, the Government must take the initiative".
The Home Affairs Committee has asked the Government to require the Bank of England to examine the scale of the threat to the banking community and to recommend any legislative action that may be required. I very much hope that we shall have an early indication that the Government are prepared to ask the Bank of England to take on that responsibility.
There is another matter concerning the Drug Trafficking Offences Act which requires urgent attention. As the noble Earl will be aware, that legislation carried with it the strong support of the
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police service. Unhappily, however, it was passed without any consideration of the implications for police resources. According to the Home Affairs Committee's report there are now 330 police officers engaged in full-time work on drug profit confiscation, many of whom have been involved in long and complex international investigations. This has become a major resource burden for the police service; yet all the money confiscated by the courts goes to the Consolidated Fund. The situation in the United States is quite different. There, the individual law enforcement agency responsible for the arrest of drug traffickers secures a substantial proportion of their assets.
I understand the problems associated with the procedure. They were discussed in a recent booklet by Professor Michael Zander who argued against a precise replication of American procedures into English law for reasons which I accept. But both he and the Home Affairs Committee have suggested the establishment of a central fund into which the proceeds of the seizure of drug traffickers' assets should be paid.
I am sure that that is right. It makes no sense whatever to ask the police to carry the full cost of immensely expensive operations and to allow the Treasury simply to pocket the proceeds. It is also damaging in another way. Only a few years ago, the United States authorities wanted to pay the Metropolitan Police a large sum of money which had been confiscated by the American courts as a result of work done primarily by Metropolitan Police officers. The Americans could not do that because machinery did not exist to allow that money to be accepted in this country. How can that possibly be right? As a result not only of the Drug Trafficking Offences Act but also of enactment of the legislation that we are discussing today, those incidents are bound to recur unless we change our procedures. Again, I hope that the Government will look at this difficult question and accept the recommendation of the Home Affairs Committee.
I turn to a similar question relating to the Bill. What is the true cost to be? As I indicated, I welcome the Bill unreservedly. But why does the financial memorandum deal only with public service manpower and exclude the implications for the police? We are told that Part I of the Bill will probably require another 22 civil servants and cost £2·2 million. Those civil servants will presumably carry out the work of what is described in all recent mutual assistance arrangements as the "central authority", which in this country I understand to be the Home Office. I hope that the Government will tell us what the additional call on police resources will be. It is essential that that should be done, particularly in the light of what has happened following the passage of the 1986 Act. I hope that the noble Earl will be able to help us with that point.
I come now to one particular question dealt with by the noble Earl which puzzles me and also, I suspect, the noble Lord, Lord Mishcon. The Home Affairs Committee indicated clearly that, if we were to ratify the Vienna Convention, it would be necessary to amend the Drug Trafficking Offences Act; yet, when one examines the Bill, there is no

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reference to that. The noble Earl said that he would bring forward amendments to deal with the question, and I welcome that. However, perhaps I might ask him whether, if he is to do that—this is a matter of some importance to those of us who will be involved in the Committee stage of the Bill—he proposes, as I assume he will, to amend the Long Title of the Bill. Obviously, if amendments are to be made, a number of us would like to consider the possibility of other amendments to the 1986 Act. I should like to refer the noble Earl to the publication to which I referred by Professor Zander who has made a number of suggestions as to how the Act could be improved. I very much hope that the Home Office will look carefully at his proposals between now and the Committee stage of the Bill after Christmas.
We have made some progress on the matters dealt with in the Bill. For instance, the Drug Trafficking Offences Act, despite all the difficulties surrounding it, represents a substantial improvement in our statute law. There has been a substantial reinforcement of regional crime squads as a result of the creation of drug units. There has also been the welcome appointment of police officers and Customs representatives at a number of British embassies abroad. The Bill will significantly improve the chances of bringing before the courts some of the major criminals responsible for organising this industry. As such, it deserves a warm welcome.
3.56 p.m.
Earl Ferrers: My Lords, I am grateful to noble Lords for the welcome that they have given to the Bill. I had hoped that this would prove a relatively uncontroversial matter, albeit a very serious one. As usual, I am immensely grateful to the noble Lord, Lord Mishcon, for the courtesy which he always extends to me by letting me know in advance the points about which he is concerned. Anything to do with drugs is extremely important, not only nationally but internationally. Everyone is concerned to see that we deal with the drugs problem as best we can.
The noble Lord, Lord Harris of Greenwich, said that we are not on top of the drugs problem. I am grateful to him for continually reminding us of the dangers of drugs. However, if one looks back 10 years or so at the warnings and forebodings about what this country would be like in 10 years' time—in other words, now—and we then look at the present position, we see that, although there is no room for complacency, we are not in the horrible position that some people had forecast. That is not by accident. It is because people—this goes for the police and all officials—have made every conceivable effort to ensure our not getting into the position that some people predicted. That does not mean to say that we can ever afford to sit back and think that the position will remain the same; it will not. The international efforts of those whom we call drug barons will continue with greater force in the future.
I am grateful to my noble friend Lord Mancroft for referring to the need for specialist treatment centres. The Government fully accept the need for more to be done in that area. Over the past two or three years, we have increased each year the funding
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for improved treatment and prevention measures not only in this area but also in relation to preventing HIV disease and AIDS. In the Autumn Statement, my right honourable friend the Chancellor of the Exchequer announced £2·3 million of new money in 1990–91 to set up local drug prevention teams which will operate in selected areas. The international conference, which we intend to hold next year, will also place emphasis on that work.
The noble Lords, Lord Mishcon and Lord Harris, referred understandably to the Home Affairs Select Committee. We welcome the Select Committee's report. It is very helpful; it is a constructive analysis of a serious and pressing problem; and it contains a lot of information and suggestions. Your Lordships will understand that the report has been available for only a week. I hope that both noble Lords will acquit me of any discourtesy if I say that the Government would like time to digest its implications. The Home Office will be considering the detailed recommendations of the report in consultation with other departments. We will publish a formal response as soon as possible.
Action has already been taken in some of the areas covered by the report. The Bill which we are discussing today includes provisions to enable the United Kingdom to ratify both the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the European Convention on Mutual Assistance in Criminal Matters.
Both the noble Lord, Lord Mishcon, and the noble Lord, Lord Harris, were understandably concerned about money laundering. The noble Lord, Lord Harris, said that only £11 million has been confiscated. It may be helpful to put your Lordships in the picture. Confiscation orders have been made totalling more than £13 million, and more than £22 million has been restrained. This demonstrates the success of the 1986 Act since it was introduced in 1987. The further amendments which we intend to make under Part II of the Bill will strengthen the money-laundering provisions even further and should help to reduce the amount of money which is laundered through the financial centres in this country. The noble Lord, Lord Harris, said that it was only a small amount that we had confiscated. That is true, but it is at least a start. I hope that those sums of money will increase.
The noble Lord, Lord Mishcon, referred to the central authority and asked what was being done about that. The intention is that when the Bill is implemented there will be established within the Home Office a unit which will be known in the international legal assistance vernacular as a central authority. This authority will be responsible for acting as a channel through which requests for assistance, both incoming and outgoing, will pass.
In practice the central authority will exercise on a day-to-day level the powers which, under the Bill, are to be conferred on the Secretary of State with the exception of the power to issue a warrant under Clause 5 or Clause 6 concerning the temporary transfer of prisoners for the purpose of giving evidence. Action by the central authority will, in all cases, be initiated by receipt of a request from a

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court, tribunal or other central authority overseas or from a court or prosecuting authority in this country.
The provision in the Bill which is most likely to be of use to the defence in a case in the United Kingdom is Clause 3, which provides for assistance to be sought overseas for use in United Kingdom proceedings. By virtue of Clause 3(2) it will be open to a defendant in any case in which proceedings have been instituted to apply to a Justice of the Peace to issue a letter of request. If such a letter is issued it will then be sent to the central authority acting in the name of the Secretary of State for onward transmission to the appropriate court or other authority in the country in which the evidence requested is to be sought.
The noble Lord, Lord Mishcon, asked whether the central authority had already been set up. Preparations for the establishment of the central authority are under way. It will have a job to do once the Bill is enacted, but the nucleus of the central authority exists already. It will perform functions relating to the enforcement of the drugs confiscation orders which are made by overseas courts.
The noble Lord, Lord Mishcon, also asked about legal aid. There is nothing in the Bill which provides for individuals in this country to be arrested for offences which are committed abroad. I believe that that is the point about which the noble Lord was concerned. The existing law governing arrest with a view to extradition will remain unaltered. Anyone who is arrested in this way is eligible for legal aid both in connection with obtaining legal advice and assistance and with representation in any hearing in a United Kingdom court. If the proposals in Clause 5 of the Bill are approved our intention is to amend prison standing orders to make it clear that it will be open to a prisoner to seek legal advice before consenting to be transferred abroad under the clause.
The noble Lord also asked about reciprocal provision for mutual assistance from abroad. Countries which have ratified the European convention on mutual assistance will have committed themselves to giving us assistance. The Commonwealth scheme on mutual assistance encourages Commonwealth countries to provide similar help. We cannot require other countries to do likewise, but we hope that they will. Our ability to help them should make this more likely.
The noble Lord referred to confiscation. The spirit of Section 26 of the Drug Trafficking Offences Act 1986—which provides for the enforcement of foreign restraint and confiscation orders—is to strengthen co-operation between ourselves and other countries with a view to depriving drug traffickers of ill-gotten gains. Including bilateral arrangements with other countries, it is implicit that we recognise judicial proceedings of these countries. But, as a safeguard, we have included grounds for refusal of any request—including refusal in the national or other essential interest—in all such agreements so far concluded.
In a domestic case Section 19 of the 1986 Act provides for compensation in certain well-defined
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circumstances. It covers the case where there was misconduct in the investigation or prosecution of the offence which gave rise to the making of a confiscation order. In the Drug Trafficking Offences Act 1986 (United States of America) Order 1989—which was debated both in this House and in another place—we did not apply Section 19 to actions taken under the Act in relation to American proceedings because the conduct of such prceedings is inevitably a matter for the American authorities. In most cases civil action would be available through the courts of the country which conducted the trial. We will want to reflect very carefully on whether Section 19 should be applied blanket-fashion in respect of all the enforcement requests which we shall be receiving through bilateral agreements.
The noble Lord, Lord Mishcon, also asked why there were such dreadful delays. I can tell him that the drafing of the convention created the most massive technical problems. It had to take into account the requirements of many different systems of law throughout the world. These difficulties became very apparent in the working groups which examined the draft and indeed in the plenipotentiary conference which met at the end to adopt the convention. It was generally regarded as a tribute to the determination of the international community to achieve what it did that these problems were overcome. It took a long time. I can understand the noble Lord's frustration that it was not done earlier.
The United Kingdom takes the view that there is no point in ratifying a convention until there is in place all the legislation and procedures which are necessary to implement it fully. The convention was signed last December; therefore this is the first parliamentary session in which we are able to introduce a programmed Bill. In the meantime, as I have described to your Lordships, we have been at the forefront, having implemented most of the convention. This has been fully recognised by the international community. I hope therefore that the noble Lord will not think that we have been unduly laggardly.
The procedure is that we in the United Kingdom first put our own legal house in order. We then ratify the convention. Others sometimes ratify the convention first and then sort out their own legislation afterwards. Ratification is done by an order in council. Then the instrument of ratification is deposited with the Secretary General of the United Nations, because it is a United Nations convention.
The noble Lord, Lord Harris, referred to confiscated assets and asked why these could not be given to the police. That is a paraphrase of what he said. Confiscated assets are at the moment paid into the Consolidated Fund from which government expenditure generally—including very substantial support for anti-drugs effort—is financed. We are currently considering the detailed arrangements whereby a proportion of sums confiscated from drug traffickers as a result of international agreements might be used directly to strengthen the United Kingdom's enforcement and other efforts to curb drug misuse. The noble Lord will also realise that, on a practical basis, although giving to police forces the funds that they have secured is prima facie

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attractive, it is a difficult way to finance police forces because one never knows when they will be successful and when they will not.
The noble Lord also asked what the cost of the provisions in the Bill was to the police. Provisions in Part I of the Bill will require 13 additional police posts, three for the Metropolitan Police, four for Interpol and six for provincial forces. Those are all included in the total of 22 which is referred to in the Explanatory Memorandum. Part II should not result in the need for any additional police.
I am grateful to your Lordships for the welcome that you have given to the Bill. I hope that the sooner we can ratify the European Convention on Mutual Assistance in Criminal Matters, and are able to co-operate fully with the Council of Europe and our Commonwealth partners, the better. I hope that the Bill before your Lordships will have a smooth passage both here and in another place. I am grateful to noble Lords for the support that you have given it today. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

European Council, Strasbourg
4.12 p.m.
The Lord Privy Seal (Lord Belstead): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister about the meeting of the European Council in Strasbourg. The Statement is as follows:
"With permission, Mr. Speaker, I shall make a Statement about the European Council in Strasbourg on 8th and 9th December, which I attended together with my right honourable friend the Foreign and Commonwealth Secretary.
"The text of the Council's conclusions has been placed in the Library of the House.
"The Council considered four main issues: the steps still needed to complete the Common Market in 1992; progress with economic and monetary union; the social charter; and how the European Community can support democracy and economic reform in Eastern Europe.
"First, the steps needed to achieve a real Common Market by 1992. Our meeting in Strasbourg confirmed the importance which we all attach to keeping to the timetable for 1992: and I believe we are on course for that.
"The Council welcomed the progress made during the past six months, in particular to open up markets for banking and financial services and for telecommunications in every member state, and to make possible cheaper air fares.
"We shall aim to agree another package of important measures before the end of the year, including rules for company mergers and the further opening up of public sector procurement.
"We also set priorities for the next stage of our work, covering such matters as freedom to provide investment services and life insurance throughout
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the Community, and removal of restrictions on road and air transport and shipping.
"Completion of the Common Market is important in three respects: it represents the single most important contribution which the European Community can make to the prosperity of all its members; it is an example and an opportunity for the countries of Eastern Europe; and it is the main area in which the European Commnity is in practice moving towards closer integration.
"Britain has throughout been at the forefront and our record in implementing the Community's decisions is matched only by Denmark—as was explicitly confirmed by M. Delors in Strasbourg.
"The second main item was progress with economic and monetary union. The Council welcomed the fact that the necessary decisions have now been taken to enable the first stage of closer economic and monetary co-operation in Europe to start on 1st July next year. This is something which Britain very strongly supports.
"President Mitterrand also noted that the necessary majority existed to convene an inter-governmental conference before the end of next year, to discuss further steps towards economic and monetary union. The conference will set its own agenda and the timetable for its proceedings. No time limit is set for its work. It will have before it not just the Delors Report, but the British paper setting out an evolutionary approach to economic and monetary union, and perhaps other contributions. Meanwhile, discussion of all these matters will continue among Finance Ministers, to ensure that there is full and adequate preparation of the inter-governmental conference.
"The Council's conclusions specifically recognise—and this is a very important point for Britain and for this House—that the procedures for democratic control over economic and financial matters in each member state must be respected.
"Mr. Speaker, we are in the early stage of what will be a long debate in Europe on these matters. A number of different viewpoints are already beginning to emerge. Britain will play a full and constructive part in the debate, while reflecting the view expressed in all parts of this House that stages 2 and 3 of the Delors proposals are not acceptable
"Our third main item was the social charter. At our last meeting in Madrid, we all agreed that creating jobs should be the Community's top priority. It was all the more disappointing that the social charter which emerged would regulate the labour market in a way which—far from creating jobs—would actually put them at risk, by raising costs and making our countries less competitive.
"Moreover, the charter foreshadows an action programme which the Commission is bringing forward containing no less than 43 separate proposals, including 17 legally-binding directives. Action at Community level is appropriate, in areas such as health and safety at work and freedom of movement. But the programme includes many

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other matters such as part-time work, working conditions, and compulsory schemes of worker participation in management.
"Britain does not accept that the Community should direct policy in these areas, many of which we believe are for national authorities to decide. Nor do we see any need to seek uniformity among social policies which have been developed to suit the varied needs and traditions of the different Community countries.
"I therefore made clear that we would not endorse the text of the charter—and judging from their comments, I believe many of my colleagues in Europe will have considerable difficulties with the Commission's specific proposals when they come forward.
"The fourth main area of our work was help to Eastern Europe. We want to support in practical ways the countries in Eastern Europe which are introducing democracy and economic reform. The Council therefore committed us to further specific measures of help including more food supplies; support for the $1 billion stabilisation plan for Poland; setting up an agency to help co-ordinate offers of training; agreement in principle to set up a development bank to help Eastern European countries make the transition to market-based economies—and we hope others, including the United States, Japan, Canada and the EFTA countries, will join in.
"Britain's ideas for closer association between the European Community and the countries of Eastern Europe will also be followed up.
"Mr. Speaker, Heads of Government and foreign Ministers also discussed a wide range of international political issues. We underlined the importance of maintaining security and stability in Europe, in the face of the momentous changes taking place. This means confirming existing alliances, treaties and agreements, including the Helsinki Final Act.
"I would also draw attention to our declaration on Southern Africa. In this the Twelve look forward to the time when sanctions and other measures against South Africa can be reconsidered in response to profound and irreversible change there.
"May I say how grateful the Government are for President Mitterrand's skilful, courteous and effective chairmanship of the Council.
"Mr. Speaker, this was an important meeting. What emerged most strongly is the degree to which the Community and the twelve member states can—not least because of 1992—act as the driving force in the development of the whole of Europe, at a turning-point in the Continent's history. The Community should be an example of how free and democratic nations can work ever more closely together, while remaining open to the outside world.
"That is the way in which Britain wants the Community to develop; and, despite disagreements on some points, the Strasbourg
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Council encourages us to believe that is how the Community will develop, with Britain playing a very full part".
My Lords, that concludes my right honourable friend's Statement.
4.21 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord the Leader of the House for repeating what is a detailed and important Statement. It is clear that decisions of the first importance were taken at the Strasbourg summit; namely, acceptance of the principle of German reunification; the convening of the conference on economic and monetary union; the endorsement of the social charter; and the approval of the creation of a Bank of Europe. If these objectives are implemented they will match in historic significance the developments in Eastern Europe and banish the cold war once and for all.
There are a number of encouraging assertions in the Statement. The Prime Minister herself says that we are on course for 1992. The question is whether we are on the same course as the other 11 members. For example, can the noble Lord clarify the Prime Minister's reaction to what I see as the four major proposals: namely, reunification, which is not dealt with in the Statement; the conference; the social charter; and the Bank of Europe?
It appears from many press reports that there was harmony and unanimity, although some reports say that it was 11 to one all the way. There are obvious dangers in a drift to perpetual isolation, and perhaps the noble Lord will tell us whether there were matters of primary importance upon which the Prime Minister was able to agree with her colleagues.
Is the noble Lord satisfied that we will be on the same course as other members in the conference, which the Statement deals with in some detail? Are there not some fundamental differences which are reflected in the Statement itself by the words,
"A number of different viewpoints"?
Can the noble Lord given an example of one or two of these differing viewpoints upon which there is broad support for the Prime Minister? Will stages one and two of the Delors proposals be the most serious obstacles, or are there others which are not referred to?
We regret the Prime Minister's total rejection of the social charter. This is one major policy proposal that has wide support in the Community. Are there not any aspects of the social charter that the Government can support? Who are the colleagues in the Community whose support the Prime Minister anticipates when the time comes? We are glad of course that the Government supported the measures to help Eastern European countries, but can the noble Lord say what the Prime Minister's response was to the proposals for German reunification?
The Statement also refers to sanctions and gives the impression that there was some unanimity there on this question. Is there any justification for saying that any of the 11 other members of the Community agree with our policy on sanctions? It is important that we should be absolutley clear on that. The

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Statement deals with issues of the highest importance, and I think we should have a full day's debate upon it as soon as possible.
Lord Jenkins of Hillhead: My Lords, I too join with the noble Lord, Lord Cledwyn, in thanking the noble Lord the Leader of the House for repeating the Statement to us. The Statement marks some changes of tone, which was also apparently present in the Prime Minister's attitude in the Council chamber at Strasbourg. The question is: does it mark a change of substance as well? That remains to be seen.
There is a remarkable compliment to President Mitterrand at the top of page 11 of the Statement. We are also told that President Mitterrand at one stage led a round of applause for the Prime Minister. The pessimistic interpretation of that would be that it was relief at Mrs. Thatcher's dinghy drifting out of haranguing distance from the shore of the majority. The optimistic one was that a new co-operative spirit was emerging from the British Government. We should like any guidance that the noble Lord can give us on that, because there are a number of ambiguities in the Statement which make it early days to pronounce on it.
If Britain wants to give the impression of engagement and commitment, it must give up welcoming delay for its own sake. That comes out at the bottom of page 6 in the Statement:
"Mr. Speaker, we are in the early stage of what will be a long debate in Europe on these matters".
—always giving the impression: let it proceed as slowly as possible. That is a note of foot dragging and not of constructive agreement.
It was also rather ludicrous for Mrs. Thatcher at the end of the Strasbourg summit to say, as she did on television, in a term of disparagement, "They are not even starting an inter-governmental conference until the end of next year". That was ludicrous because Britain had resisted having it, and because this is in fact a remarkably tight and early time-scale.
Secondly, we must not continue to play the really rather silly game of hoping for Franco-German disharmony. There was a great burst of that in press briefings at the end of last week. When one considers, first, the history of the hundred years when the world had plenty of Franco-German disharmony, and also the crucial importance for the world of the prospect of German reunification not reopening that old enmity, that is a frighteningly irresponsible game to play.
The Franco-German axis has in some ways been a bit close for our British comfort, but the responsiblity for that lies much more in the semi-detachment pursued in London than by any exclusivity pursued in Paris or Bonn. What I suspect and hope that Statement means is that we are now rather in the stage that we were in at Milan four years ago, and are signalling our reluctant willingness to go along late, slowly, and a little truculently. It is better than nothing, but how much better and more in Britain's interest it would be if, for once, we could go along early at a good pace and with grace and not truculence.
Lord Belstead: My Lords, I am grateful to both noble Lords, Lord Cledwyn and Lord Jenkins, for responding to the repetition of my right honourable friend's Statement. Both noble Lords raised the question of the negotiating stance of my right honourable friend the Prime Minister and how we come away, as it were, from this European Council which, as the noble Lord, Lord CI edwyn, quite rightly said was an important one. It is clear from the Statement that completion of the single market is centre stage in the development of the Community. As I think the Statement rightly says, not only is it something that affects the strength of the Community itself but it is something that is very important at the present time of dramatic change in Eastern Europe.
I am very glad to say that the United Kingdom is not only in the forefront of bringing forward the legislation necessary in order to complete the single market, but also in implementing those measures. I am very glad that the Statement was able to record that the United Kingdom and Denmark are in the forefront regarding those matters.
Secondly, on the first point, the Statement also makes clear that on the crucial issue of Eastern Europe, we have most certainly played our part and shall continue to do so.
The noble Lord, Lord Cledwyn, asked me about German reunification. I simply say on that crucial question that of course it is a longstanding Western commitment that there should be unity through self-determination. However, I believe that it is very important that the message should go out that the Twelve agree that a whole range of post war agreements underpinning existing security arrangements in Europe should remain in place; for example, the Federal Republic's commitments to the Community and to the NATO Alliance, to the quadripartite agreement on Berlin and to the Helsinki principles. Of course the inwardness of the latter means the continuation of existing frontiers.
The noble Lord asked me about the position of Britain and the inter-governmental conference. The noble Lords, Lord Cledwyn and Lord Jenkins, are quite right that my right honourable friend argued that it would be premature to start an IGC at the end of 1990. That was because my right honourable friend thought that it was not right to do that with stage one of the Delors Report yet to be brought to fruition. That involves massive changes which, on agreed Community timetables, will stretch at least until 1993.
Thirdly, the noble Lord asked me whether there was not a part of the social charter with which we could agree. Perhaps I may say that the original Statement makes it clear that there are aspects of the social dimension in Europe with which we can very readily agree and I shall not go over those words again. However, the difficulty is that we found that the presidential text was too regulatory and was contrary to the Madrid prescription on unemployment and subsidiarity and national diversity. The action programme was not endorsed at Strasbourg. Measures will be tabled in the normal way over the next two years and will be considered on their merits.

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The noble Lord asked which other countries agreed with the United Kingdom. I apprehend that they will be countries which feel that their costs in industry, commerce and employment could be jeopardised by the central regulation proposed by the social charter. On behalf of the Government, I believe that the idea of the social dimension in Europe is a test of the commitment of the European Community to the doctrine of subsidiarity.
The noble Lord, Lord Cledwyn, finally asked me about South Africa. Our total opposition to apartheid was very clearly underlined—and I believe that the House would wish to hear that—at the conference. However, at the same time in the president's communiqué there are words of encouragement for South Africa to continue down the path of reform and change. The Government are very glad that Community partners, like the Commonwealth at the Commonwealth Heads of Government meeting, have taken that view. The United Kingdom was not in any way isolated. I am told that all countries agreed that change is best promoted by a mix of pressure and encouragement.
Finally, I go back to the main point talked about by the noble Lord, Lord Jenkins, which was, as the noble Lord saw it, the brake which the noble Lord felt my right honourable friend is putting on progress in Europe, particularly as regards an inter-governmental conference. I simply repeat that as stage one of Delors is being put into effect involving massive change, it stretches on to an agreed Community timetable which goes at least until 1993: for example, the doubling of structural funds is due by the end of 1993; the completion of the internal market is due by the end of 1992; the abolition of exchange controls for some countries—that is, Spain, Ireland, Greece and Portugal—is not due until the end of 1992: regarding the creation of a single financial area, negotiations are only just starting on the investment services directive. And of course—and I meet this point head on—when the United Kingdom joins the ERM, there will be massive changes which must be felt. In practice, account must be taken of stage one developments while the inter-governmental conference is taking place. However, no doubt a deadline has been set either for the IGC to end or for any move beyond stage one. However, there is a very important commitment in the Statement which I read out that Britain will play a full and constructive part in the IGC debate.
Lord Walston: My Lords, from these Benches, I also thank the noble Lord for repeating the Statement. We express our welcome for the change of tone which is apparent in it. There is a very much more flexible and co-operative approach which we are delighted to see because we felt that our influence in Europe will be very much greater if we show ourselves, as indeed the country as a whole undoubtedly is, as true and committed Europeans We are not alone in that approach. That does not in any way remove from us the right and the duty to criticise certain aspects of proposals.
First, I turn to the monetary aspect. Does not the noble Lord agree that it is essential for the governor
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of the Bank of England to co-operate closely, and ever more closely, with his European colleagues, especially after all exchange controls are lifted? His contribution, because of his very close contacts with Her Majesty's Government and through the Government with Parliament, will undoubtedly ensure democratic expressions will be made at the formative stage of any discussions.
There is then a very minor point compared with that; namely, the welcome proposal to remove restrictions on road transport. However, can we have an assurance from the noble Lord that that will not in any way diminish the safety on which we quite rightly insist in this country in regard to size, construction and condition of freight vehicles? From time to time there have been some very disturbing aspects of that when heavy vehicles from overseas have been on our roads and have failed to comply with our own safety regulations.
To turn to the social charter, as other noble Lords have mentioned, it is clear that modifications will be needed. It is right that proposals by the Commission should be subjected to the closest scrutiny. Will the noble Lord give an assurance that that will take place? It is vitally important for this country to be a party—and not an obstructive party—to the discussions which are taking place and which will take place in the future on the social charter. His right honourable friend said that she made it clear that we would not endorse the text of the charter. Will the noble Lord also give an assurance that in spite of not endorsing the text of the charter as it now stands, we shall be fully active in the discussions which will precede the final proposals for the social charter?
Lord Belstead: My Lords, I thank the noble Lord, Lord Walston, for his response. First, he asked me for an assurance that the Governor of the Bank of England would co-operate with colleagues in Europe. Perhaps I may say that there is an inwardness in the Statement which says:
"The Council welcomed the fact that the necessary decisions have now been taken to enable the first stage of closer economic and monetary co-operation in Europe to start on 1st July next year. This is something which Britain very strongly supports".
That means that the legislative button has been pushed for this co-operation to begin from 1st July. One of those legislative buttons is the updating of the convergence decisions of 1974 on monitoring economic convergence. The second legislative button is that central banking decisions are updated. Those decisions are about meetings of central bank governors. In a sense, what the noble Lord is saying has been put into legislative form by that paragraph in the Statement. It is a little obtuse but I believe that is what it means. Then as stage one of Delors goes on, it is at that moment that the matters we are talking about concerning the freedom of financial services and other factors have to be hammered out.
Secondly, the noble Lord asked me about safety for road transport. I must not give the noble Lord an answer concerning a matter about which I am not briefed. The last time that the Transport Council met was on 4th and 5th December when it dealt with road haulage cabotage. There was an extremely useful discussion then. I have no notes concerning

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the safety angle. I shall draw the attention of my right honourable friend the Secretary of State for Transport to what the noble Lord, Lord Walston, said on that point.
Thirdly, the noble Lord said that surely we must be partners to discussions on the social charter. At the risk of repeating myself, I said in reply to the noble Lord, Lord Cledwyn, that the action programme was not endorsed at Strasbourg. Therefore measures will be tabled in the normal way over the next two years and considered on their merits. As I have said, the United Kingdom has doubts which we believe are shared by other member states. Obviously, as proposals are brought forward we shall make our voice heard.
Lord Harmar-Nicholls: My Lords, I hope that my noble friend and the Government take into account what is said in this House and the other place when they are considering future actions in response to the Statement. I hope they will not feel that some of the implications behind the questions and comments are accepted universally. I doubt that the implications behind some of the questions will be accepted by a majority of people outside Parliament and in the country.
The noble Lord the Leader of the Opposition based his questions and general message regarding the Statement on the basis of which course we were on. The Statement said that we were on the right course. The noble Lord asked whether we were on the same course as the others. If one is to raise those kinds of doubts one is entitled to know what course the noble Lord and his party are on. They should tell us in advance whether, if we end the course with a federated Europe, that will be good for Europe or this country. It is a quite clear implication from the speeches and the reports of M. Delors that, with a federated Europe, possibly Europe and this country will be weaker in arriving at what we want, which is real and acceptable solidarity to deal with the problems which face this part of the world and the world beyond it.
I ask my noble friend to take into account that it will be stupid to contemplate moving to the second and third parts of the Delors Report without making certain that the first part can work. It is not delaying or dragging feet to say that before we take the third and fourth steps we should make certain that we have achieved the first and second steps. I ask my noble friend properly to take into account all that has been said by accredited Members of both Houses, but not necessarily to accept that the implications behind some of the speeches are what the country needs or should have.
4.45 p.m.
Lord Belstead: My Lords, I was very interested in the intervention by my noble friend Lord Harmar-Nicholls, and I thank him for the words of caution which he uttered towards the end of his remarks. They exactly reflect what I endeavoured to say, but less well, a little earlier; namely, that caution should be the watchword concerning Delors stages two and three when we are still having to go through stage one. It is very important to bear in mind that
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the sovereignty issue looms large, particularly in our parliamentary system, when considering the Delors proposals in stages two and three. My noble friend was quite right, with his memories of another place, that it has given a pretty united voice on being extremely sceptical about stages two and three of Delors.
The first point my noble friend made was that when criticisms are uttered the Government should not believe that they are necessarily shared by everybody else. I was very interested to note that earlier this week no less a person than the Governor of the Swiss National Bank was reported to have said that, on economic and monetary union, the British authorities have understood the essential point that monetary integration should proceed along the path from stability to unity and not from unity to stability.
Finally, I thank my noble friend for intervening on this important Statement. There was one further point that my noble friend made; namely, that on the general question of where we are going the United Kingdom Government are being supportive of the EC. The single market is at the centre of the stage and the other measures that we need to carry out all flow from it. One of those other matters is the enormously important help that we are giving to Eastern Europe.
Lord Stoddart of Swindon: My Lords, I thank the noble Lord for repeating the Prime Minister's Statement to the other place. We have listened to the media hype about isolation. Most people in this country do not object to this country or its Prime Minister being isolated provided that they are putting forward policies and views which are in the interests of this country and its continued independence. I hope that was what the Prime Minister was doing.
I have looked at the communiqué, which is headed:
"Conclusions of the presidency, European Council, Strasbourg, 8 and 9 December 1989".
On the first page there is a paragraph which says:
"It is in the interests of all European states that the Community should become stronger and accelerate its progress towards European Union".
To me, "accelerate" means speeding up; "European Union" means a union of all the states of the common market, presumably under a federal or unitary government.
Exactly what did the Prime Minister do? What exactly was her attitude? We are entitled to ask. We understood from, I believe, the Milan summit that the Prime Minister was not in favour of the single market à la 1992. Nor was she in favour of the loss of sovereignty which would go with that. Yet 12 months later she forced through the House of Commons on a guillotine Motion the Single European Act, which, as she and the Government now accept, certainly reduced our sovereignty to a great degree.
Are we to expect the same kind of thing? Is it merely words that the Prime Minister utters while she believes in fact that eventually this country

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must lose its independence and be subsumed into a federated or a unitary state of Europe? We are entitled to know that whichever side of the argument we might be on.
Has the social charter any meaning for workers in this or any other country, or is it just a mass of words? Does the Leader of the House agree with me that from a social point of view the best thing that could be done for the workers of this country is to abolish the common agricultural policy? That would immediately reduce the cost of living for every family in this country by f13.50 a week. That is something real which people understand about a social charter or a social benefit. I sincerely hope that the noble Lord will be able to state honestly the course upon which the Prime Minister set us at this crucial summit where it appeared that the president of the European Commission seemed to act not like the president of the European Commission but as the agent for M. Mitterrand and the French Government.
Lord Belstead: My Lords, I well understand the noble Lord's points. He is nothing if not consistent in having made similar points before; but not—I am thinking of the words of my noble friend Lord Harmar-Nicholls—about wanting to know where noble Lords opposite stand. If the noble Lord will forgive me for saying so, on this issue he does not stand on the same ground as his own Front Bench. But that is the noble Lord's affair. I do not regard him any the less for that.
The noble Lord asked me one straightforward question about the words in the Statement on European union. I give the noble Lord a straightforward answer. My right honourable friend the Prime Minister made the point very strongly at the Council that when we are going through what is called stage one of the Delors Report we ought to attend to capital liberalisation, the setting up of the single market, freedom of financial services and a strengthened competition policy; in fact, all the things which we believe are right. On the Community's own timetable, these things will take nearly four years to put in place. It was noted by the presidency that there was a simple majority, which is consonant with the treaty, for calling an inter-governmental conference at the end of next year. My answer therefore to the noble Lord's question is that in practice account will have to be taken during that inter-governmental conference of what is happening to put stage one into place. But no deadline has been set either for the inter-governmental conference to end or for any move beyond stage one of the Delors Report.
The noble Lord asked whether there is any meaning for workers in the social charter. There would be if it had been agreed all round. Our specific objection to the social charter is that it would restrict the freedom of employees and employers to negotiate the most suitable arrangements on hours of work, annual leave, weekly rest periods and consulting the workforce in any workplace. We believe—and we think that others will come to believe it as time goes by—that over-regulation of that kind would be bad for jobs. We have always said that it is right to put
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the promotion of jobs at the top of the single market agenda. That was agreed at Madrid.
The noble Lord criticised the common agricultural policy. The CAP budget is now looking very good. It is looking very good because of the things which we in Britain suggested to our colleagues. We won agreement from our colleagues, and everybody is feeling better now about the common agricultural policy.
Lord Cockfield: My Lords, I thank my noble friend for repeating the Statement. In so far as it shows a more flexible and constructive approach to the European Community, it is much to be welcomed. But the proof of that pudding will rest in the eating. The United Kingdom's record on the completion of the internal market is not as Simon pure as my noble friend has been briefed to say; but it may be a bad thing that he thinks that it is.
Perhaps I may make one point on monetary policy. My noble friend referred to democratic control. I am sure that it is within his memory—as it is within mine—that not too many years ago the pound sterling was worth 10 deutschmarks. Today it cannot even look three deutschmarks in the face. The fact of the matter is that democratic control of monetary policy by governments has proved to be an unmitigated disaster. On the contrary, vesting such control in an independent body such as the Bundesbank whose independence is guaranteed under the federal constitution is likely to produce results much more agreeable for the progress of the economy. Does my noble friend agree that in some areas of life politicians have little or no control, and that the path of wisdom points to their not trying to exercise powers they do not possess?
Lord Belstead: My Lords, I take seriously what my noble friend Lord Cockfield says on this and other European Community subjects. My noble friend's record of serving the Community is well known. I was therefore sad when he said from his experience that the United Kingdom's record in contributing towards completion of the single European market is not as good as I think. It is the case that the commissioner himself explicitly confirmed that, on the Commission's figures, the United Kingdom and Denmark have the best records on implementation. We take modest pride in that. We are up-to-date with 69 of the 72 directives that we should have implemented by now.
The noble Lord referred to democratic control. He asked whether there are not things which politicians cannot do. Indeed, with all humility, I agree with my noble friend that there are things which politicians cannot do. But if my noble friend cares to look at Hansard of another place for 2nd November 1989 he will see that politicians in another place were not prepared to agree that the absolutely basic reason for the existence of another place should be forfeit.
Lord Molloy: My Lords, I thank the Leader of the House for repeating the Statement and for answering questions. Will the Government think again about the social charter? It should be realised that those nations that have just released themselves from the

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tyranny of Communism are coming together and will join the countries in Europe that have already accepted the social charter. Would it not be an awful matter if the only two political parties in Europe to reject the social charter were the Communist Party of the Soviet Union and the Conservative Party of our country?
Will the Government consider in detail whether they have done the right thing? The Prime Minister must be honoured for the manner in which she has not been prepared to have British rights and practices submerged into the EC. She deserves all credit for that. However, with regard to the social charter, that is something which could not merely unite free Europe; it could also bring into that freedom those countries which have just escaped, or will be escaping, from the evil of Communism.
Lord Belstead: My Lords, the noble Lord is always fair in debates. I say that because I think this should be my final answer, since the House is waiting for the next Statement to be read. Perhaps I may suggest that the noble Lord may care to look at the president's communiqué so far as concerns the social charter. It is clear from that that the United Kingdom's concerns about the proposals of the social charter are valid in this sense. We believe that what was being proposed is contrary to what was agreed in Madrid, where there was a prescription for a social charter dealing with unemployment, the doctrine of subsidiarity and also the doctrine of international diversity.
On looking closely at what was proposed in Strasbourg, we genuinely believed that it did not deal with those three enormously important criteria. That is why my right honourable friend the Prime Minister was not able to sign the document.
Baroness Phillips: My Lords, being a woman, my question will be a really short one. I have listened carefully to all the statements which have been made, but can the noble Lord say whether the Government are in favour of German reunification? Further, if they are, have they really consulted the mass of the population of the United Kingdom, who, I suspect, would not be behind them in their view?
Lord Belstead: My Lords, I say once again, as I have said many times during the past half hour, that the noble Baroness has asked an important question. I understand why. However, I think it is most important that I should make this my final answer. I said when answering questions earlier on that there is a long-standing Western commitment to unity through self-determination. However, what I have not said, and perhaps I may answer the noble Baroness in saying this, is that the Strasbourg Statement sets out many very important amplifications upon which all of the Twelve agreed. Those amplifications were that any reunification of Germany must be peaceful, gradual and democratic. It must also fully respect the Helsinki principles, it must find its place within a wider European integration and it must also strengthen peace in Europe.

Vietnamese Boat People
5.02 p.m.
The Minister of State, Foreign and Commonwealth Office (Lord Brabazon of Tara): My Lords, with the leave of the House I shall now repeat a Statement which was made by my right honourable friend the Foreign Secretary on Vietnamese boat people. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a statement on the repatriation of Vietnamese boat people from Hong Kong.
"This morning, Hong Kong time, a group of 51 boat people were returned to Vietnam by aircraft from Hong Kong. All 51 had been screened under a thorough process agreed with the UNHCR and did not qualify for refugee status under the terms of the 1951 UN Convention on Refugees and 1967 protocol. The repatriation was conducted in line with procedures used worldwide to remove people refused permission to remain in a territory. No firearms were carried; no force was used.
"At the International Conference on Indo-Chinese Refugees in Geneva in June, the international community agreed that refugees would be resettled in other countries, and that those who did not qualify as refugees would not be resettled and should return to Vietnam. I stress that the criteria for establishing who qualifies as a refugee are not decided by Britain, or by the Hong Kong authorities alone, but by agreement with the UNHCR.
"We and the UNHCR have tried as the House knows, to encourage the boat people to return to Vietnam voluntarily. In the past year over 600 have done so. But, during the same period, over 30,000 have arrived in Hong Kong. In all, there are nearly 57,000 boat people in Hong Kong, most of whom are not likely to qualify as refugees. The Vietnamese have recently agreed to accept volunteers back at a faster rate, but it is clear that voluntary returns alone will not match the scale of the problem. The great majority of volunteers so far have come from the people not yet screened; of those already screened and found not to qualify as refugees, fewer than 1 per cent. are volunteering to return.
"We have therefore had to begin repatriating those who are not refugees and who do not volunteer. The international community has said that it will not resettle these people. If they were not returned to Vietnam, they would therefore face the prospect of indefinite detention in camps in Hong Kong. There is another point of great importance. Unless it is clear to people in Vietnam that those who do not qualify as refugees will be returned to Vietnam, Hong Kong faces the prospect of tens of thousands more arrivals in 1990. That is simply not an acceptable prospect.
"The arrangements for repatriation, like those for voluntary returns, have been agreed in negotiation with the Vietnamese Government. Vietnam has told us that those repatriated will not be punished for leaving. We have given aid to be used to help those being repatriated to settle back into Vietnam.

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"I have paid particular attention, as the House would expect, to the question of monitoring to ensure that those who return are in no way ill treated. Our embassy in Hanoi will be monitoring their conditions both in the transit camp in Hanoi, to which they are immediately returned like the volunteers, and in the villages to which they are returned, as they have been doing for the volunteers. We hope that UNHCR will agree to help, as they do now for people returning to Laos from Thailand. We would also welcome, as I have made clear to them, the co-operation of NGOs. In the meantime I am grateful to my right honourable friend the Member for Aylesbury (Mr. Raison) and the noble Lord, Lord Ennals, who have agreed to go to Vietnam next month as independent observers to report to me on the conditions of those who were repatriated earlier today.
"There are still in the camps in Hong Kong about 40,000 Vietnamese not qualified as refugees. There is a serious risk, as I have mentioned, of as many more thousands arriving next year. This is a very serious situation. We shall now be discussing with the Vietnamese Government how to ensure the swift and safe return in future of those who are not refugees. We will be talking about ways in which we can help Vietnam to take people back at a faster rate—both volunteers and those repatriated. We will discuss how we can help those who return to be reintegrated into Vietnam. We shall be talking, as we have to, about ways of screening new arrivals quickly, as they reach Hong Kong, so that those who are not refugees can be returned quickly and safely to Vietnam. Those who are refugees will, as at present, be allowed to await resettlement in the West. We shall be working hard to find ways of checking the inflow of Vietnamese into Hong Kong next year, and shall be seeking international co-operation on this at the next meeting of the Geneva Conference Steering Committee in January.
"I know there is intense interest in the House in this issue. I believe the Lord President intends to announce that there will be a day for debates on the Estimates on Tuesday 19th December. This will include a half-day debate on Class II, Vote II, so far as it relates to the accommodation and repatriation of Vietnamese boat people. I can tell the House that no further repatriations will take place before that debate".
My Lords, that concludes the Statement.
5.9 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord for repeating the Statement. However, while we recognise the grave and depressing problems which exist, there are disquieting aspects about this morning's operation to which attention should be drawn. All of us are aware and, indeed, we are proud of, this country's outstanding record over the years as regards its readiness to receive refugees. It is against that background that I should like to raise some points of concern with the noble Lord.
The Statement refers to the difficulties of screening. Amnesty International has criticised the
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screening process involved in the forced repatriation. Can the noble Lord say what representation, if any, the refugees received during this process and also what parties are present at the screening interviews?
Secondly, we note what the Foreign Secretary says in the Statement about monitoring. We of course welcome his concern, because Mr. Hurd is a compassionate man. The United Nations High Commission for Refugees has indicated an unwillingness to undertake a monitoring role. When did it refuse? Is there a chance that it might change its mind? In relation to the action that the British Embassy will take, are the monitoring facilities regarded as adequate? Further, will the Minister describe the procedures to which he referred on 6th December with regard to refugees refused re-entry by the Vietnamese Government on the basis that they were forcibly repatriated?
I should also be grateful if the Minister would outline the details of the agreement reached with the Vietnamese Government. Does it include the possibility of the resumption of bilateral aid for Vietnam, which was cut off in 1979, as the House will recall, on the grounds that Vietnam's record on human rights was deplorable?
Further, is the Minister now satisfied beyond reasonable doubt that human rights in Vietnam today are respected and have been brought up to a standard which justifies forcible repatriation? In those circumstances, will her Majesty's Government consider restoring bilateral aid to Vietnam, since reducing poverty, which has precipitated the flow of refugees, would greatly reduce the number seeking to enter Hong Kong illegally? Does he agree that more realistic Western aid to Vietnam could provide a long-term solution to the plight of the Vietnamese boat people? Lastly, the United States has a considerable responsibility in this matter. Are the Government and the United States Administration discussing the problem? Is the United States prepared to alleviate its attitude to Vietnam and give some bilateral aid?
Lord Bonham-Carter: My Lords, I too thank the Minister for making the Statement, sad though that Statement is, and regrettable though the circumstances are in which this country forcibly repatriates 51 people (26 children, 16 women and the remainder, men) against their will to a country which they left voluntarily. I associate myself with two points that the noble Lord, Lord Cledwyn, made. First, have the Government considered—because it is urgently necessary—restoring aid to Vietnam so that it can improve economic conditions to prevent those who leave from leaving for economic reasons and to provide those who are forced to return with circumstances in which they can earn a reasonable living?
In addition, I should like to raise with the Minister, as the noble Lord, Lord Cledwyn, did, and as I have in the past, the matter of screening, which must be a matter of concern to all of us. As I understand it, the people are not present or represented when their cases are considered, nor do they receive a written communication to say what is the result of the

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screening. Whatever the United Nations may say, that does not seem to me to be a reasonable, fair or just way to deal with people whose lives and livelihoods are at stake.
Our treatment of those unfortunate people is one aspect of a policy that we have been pursuing in the Far East which is marked by inhumanity and cruel consequences. I refer to our policy in Cambodia and towards British citizens in Hong Kong. This heartless process of repatriation, forced on reluctant adults who are removed secretly at 3 a.m., and the means of conducting it, is one of which I must confess that I, and I believe many other people, can only be ashamed.
The Government will unquestionably say that no one else will help. I do not believe that we have tried as we should to mobilise international opinion about British citizens in Hong Kong or about these people in Vietnam. If we are to do so, we must first put our cards on the table and say how many of these people we are prepared to receive. Then, and in those circumstances, we can ask for the co-operation of others.
I should like to add to the questions put to the Minister by the noble Lord, Lord Cledwyn. First, the Statement says that no force was used. I still do not fully understand what that means. Does it mean sending in not police at 3 a.m.? What is the intensive counselling which we are told that these people received? We have undertaken that our embassy will monitor the conditions of 40,000 people. What staff will be available to undertake that monitoring? What is the estimated cost of monitoring, transport, resettlement, the police and all the rest that is involved? Presumably some estimate has been made.
Finally, why the secrecy? Why were journalists not informed and why were they prevented from covering the matter? Why was the United Nations High Commissioner for Refugees not informed? He said:
"They did not do it behind my back; they did it when I was asleep. The first I heard of this was from the press. I met the Government's Chief Secretary on Friday for talks on this issue. I was given no indication this was going to happen."
Is that the way in which the British Government conduct their affairs?
Lord Brabazon of Tara: My Lords, perhaps I may be allowed to reply to the remarks of the noble Lords, Lord Cledwyn and Lord Bonham-Carter. I am grateful to them for their reception of the Statement that I have repeated. I am grateful also to the noble Lord, Lord Cledwyn, who recognised the difficulties that were faced on this issue. The noble Lords asked me a number of questions, and I shall try to deal with as many as possible.
On screening, the purpose of screening is to identify genuine refugees as defined by the 1951 UN Convention and the 1967 protocol relating to the status of refugees; that is, a well-founded fear of persecution. The process was evolved with the co-operation of the UNHCR, and is monitored by it. There is a full appeal procedure conducted by the Refugee Status Appeal Board, an independent tribunal headed by a retired magistrate. Procedures are thorough and fair. No one whom the UNHCR
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considers to be a refugee will ever be sent back. Some 10 per cent. of people are screened after initial interviews. That figure rises to 12 per cent. after appeal. We shall naturally look at the Amnesty report, but I can assure the House that the procedures adopted are fair and in line with those which the UNHCR approves.
The noble Lords asked about monitoring. Vietnam has agreed that monitoring should take place. The embassy in Hanoi will undertake the monitoring at the transit centre and in the villages, as it does now for the volunteers. We hope that the UNHCR will agree to help as it does in Laos in a similar situation. We should welcome the involvement of other NGOs. The noble Lord, Lord Bonham-Carter, asked what would be the cost of that monitoring. I am afraid that I cannot give him an answer this afternoon.
On the use of force, the procedures used were in line with those applied worldwide in removing persons refused permission to remain. No force was used. No guns were used.
The noble Lord, Lord Bonham-Carther, asked why there was secrecy with regard to the media. That must be fairly obvious. Experience has shown that media attention complicates such removal operations and this one, as we have seen, was bound to be particularly sensitive.
The noble Lord, Lord Cledlwyn, asked what were the terms of the agreement with the Vietnamese. The agreement covers the organisation of the return, humane treatment of the people returning, immunity from prosecution for having left Vietnam clandestinely, monitoring and financing. We are making available up to 620 US dollars per person to the Vietnamese to go towards transport within Vietnam, food, medicines, housing, resettlement domestic equipment, vocational training, job placement, administration costs and production tools. The level of expenditure will depend upon the individual family circumstances of each repatriated person. In addition, each repatriated person receives a small sum of pocket money personally.
On the wider issue of aid to which noble Lords referred, we are prepared to consider further aid, including perhaps aid through the NGOs. But this will have to be negotiated with the Vietnamese as part of the wider arrangements to repatriate boat people. I think it was the noble Lord, Lord Cledwyn, who asked me whether the US would resume aid to Vietnam. That is a question which I am afraid I cannot answer here. It must be for the United States Government.
The noble Lord, Lord Bonham-Carter, criticised our policy over Cambodia. There is very little that I can add to what I said only a few evenings ago on that subject. As concerns the citizens of Hong Kong, they have made it very clear that they have wanted for a long time to see the Vietnamese boat people who are not refugees repatriated. Therefore they will be pleased with what we have done. I wish to pay tribute to the Hong Kong Government and to the people of Hong Kong for the fact that they have never turned away a single refugee who has arrived on their shores and that they have spent considerable sums of money in looking after these people in difficult circumstances.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that many of us very much resent the line taken by the noble Lord, Lord Bonham-Carter, in particular his reference to what happened as being a "heartless process"? Is he aware that many of us realise, on the contrary, how difficult is the problem with which the Government have been confronted, with the arrival, uninvited, of these large numbers of people? The great majority of them are not in any sense refugees, they are simply illegal immigrants.
Can my noble friend confirm that no country in the world—including the United States, which has been somewhat censorious of our policies—admits illegal immigrants? Can he confirm that an illegal immigrant who attempts to enter the United States is refused admission and promptly sent back without any screening or any such process? Is the Minister aware that most people realise how important it is that we should seek to control this inrush of people? They are mainly not refugees but persons seeking a better life in a better run economy than that of their own miserably mis-run country.
Can the noble Lord also confirm that the camps in Hong Kong are grossly overcrowded and that there is a real risk of disease? There have already been some cases of cholera and there is the risk of disease spreading if further people are allowed to pour in and overcrowd the limited accommodation in Hong Kong. Is he aware that most people appreciate the great care and trouble which Her Majesty's Government have taken to see that the process of the arrival of these people is checked and that a flow back is started? I think he said, and perhaps he can confirm this, that if nothing were done the flow of these illegal immigrants would greatly increase, once the spring has come, with better weather on the ocean for boats. Therefore action is now urgent.
Finally, regarding aid for Vietnam, will Her Majesty's Government be careful not to let themselves be blackmailed into the position of apparently having to bribe the Vietnamese Government to take their own people back?
Lord Brabazon of Tara: My Lords, I am most grateful to my noble friend for his remarks. If we have been accused of being heartless in what we have done, it would be even more heartless to leave these people in the camps in Hong Kong. No country in the world, the United States or any other, has agreed to take any of those who are not classed as refugees. As my noble friend said, the camps are overcrowded and there have already been some cases of disease. I pay tribute, as I did before, to the Government of Hong Kong for what they have done. It has been almost impossible to look after the numbers. The flow will increase next spring unless the message gets back to Vietnam that there is no point in these people coming to Hong Kong and that no country will take them.
Regarding my noble friend's last point on aid to Vietnam, I very strongly agree with what he said. We must not be seen to be bribing the Vietnamese to take back their own people. They have a duty under international conventions to receive their own
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people back in the country. This is part of the process of the return.
Lord Walston: My Lords, from these Benches perhaps I may thank the noble Lord for giving us this Statement. However, I am afraid that I cannot thank him for its contents. I accept entirely what the Minister says, that the responsibility does not entirely, or even perhaps mainly, lie with us. It is a sad day not only for this country but for those countries, our friends, who call themselves civilised countries, that they have refused to help us, and above all the Vietnamese, in this appalling situation. We all agree that it is a major world tragedy.
Will the noble Lord be good enough to amplify some of the answers which he gave to my noble friend Lord Bonham-Carter in reply to his questions? We read that the screening process was agreed with the United Nations High Commissioner for Refugees. However, why was there no UNHCR presence at the screening?
Regarding the appeals which are apparently allowed, can the Minister tell us how many appeals there have been and how many have been allowed, if any? In the same paragraph of the Statement, happily it says that no force was used. Can he tell us, however, whether the reports in the press were correct in saying that the police who were present were wearing not gear? If so, why was this done? Was it to frighten those who saw them appear or because real violence on the part of these unarmed people was feared?
Turning to monitoring the returned refugees, that is an enormous job, as other noble Lords have pointed out. It is bad enough monitoring even the 51 who come in and will be scattered through a fairly large country. But if the repatriation process continues, as it will do, there will be thousands and tens of thousands. Have the Government any estimate of the number of people they will have to monitor, how many will be required to monitor them and what active steps are being taken to involve the United Nations High Commissioner for Refugees? What active steps are the Government taking to recruit NGOs to help with this frightening problem?
Lord Brabazon of Tara: My Lords, on the first point of the noble Lord, Lord Walston, that no other country had agreed to take these people, I should remind your Lordships that those who are genuine refugees, who have been screened in as refugees, have all been placed or will be placed in friendly countries around the world. That is quite a large number of people. This country has taken some 13,000 from Hong Kong and we have agreed to take a further 2,000, of whom the first have begun to arrive. The United States, incidentally, has taken 50,000. Our record on taking those classed as refugees is a good one. The noble Lord asked why the UNHCR did not take part in the screening process. It has done so. The process was evolved with the co-operation of the UNHCR and has been monitored by that body. It is an ongoing process which will continue to be monitored by the UNHCR.
The 51 Vietnamese returned last night comprised nine families, one single man and three single

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women. One family came from a province in North Vietnam and all the other families from another province also in North Vietnam. Therefore, the monitoring will not be too complicated in those cases. As I said in the Statement, we have asked the UNHCR to monitor these returned people as it monitors similar returns of people from Thailand to Laos. We have also asked the NGOs whether they would like to help in this issue. However, so far we have not obtained agreement from either of those bodies.
5.30 p.m.
Lord Wyatt of Weeford: My Lords, will the Minister ask the Government to request the Chinese Government in Peking to stop their corrupt officials on the mainland from provisioning and fuelling the immigrants' boats as they voyage from port to port on the mainland? Those officials do that in return for bribes. They also allow immigrants to travel in buses to the coast, from where they can take boats to Hong Kong. Last week I was told by senior police officials in Hong Kong that the people who travelled by such a route constituted 60 per cent. of the problem. They considered that if the Chinese prevented those illegal immigrants from leaving their coast it would result in only 40 per cent. of the present number of refugees arriving.
Will the Minister further refute the claim made by Mr. Kaufman on the BBC this morning that if only the British Government had provided massive aid to Vietnam there would be no problem at all and no illegal immigrants would leave North Vietnam? I hope the Minister will note that the spokesman for the Labour Party on foreign affairs said that on no account would the Labour Party support calls for any of the refugees to settle in this country. He said they should all be kept in Hong Kong, where they are not allowed to have passports to enable them to come to this country.
Lord Brabazon of Tara: My Lords, the noble Lord is right to say that the alternative to returning to Vietnam for these people is to be kept in the camps in Hong Kong in difficult and sometimes dangerous circumstances from a health point of view. As I have said before, no country in the world has agreed to take these people. I take the point made by the noble Lord that the Chinese should be persuaded to stop letting these people pass through China on their way to Hong Kong. It is certainly true to say nowadays, although it may not have been in the past, that the great majority leave North Vietnam and hug the Chinese coast, calling in as necessary, and some even travel overland and travel only the last leg of the journey by boat.
As regards aid to Vietnam, I have already covered that subject. However, I agree with the noble Lord and my noble friend Lord Boyd-Carpenter that the Vietnamese could do a great deal to put their own house in order, without the need for aid, and to make their country more attractive for their own citizens to stay in.
Baroness Ewart-Biggs: My Lords, in view of the fact that 26 children were included in the group of forcibly repatriated refugees, will the Minister say why three o'clock in the morning was chosen as the time to carry out the repatriation? Does he agree that this is not a humane way of dealing with the situation? It is not humane to wake children up in the middle of the night and for them to be surrounded by police. That is a very frightening situation for children. Why was three o'clock in the morning chosen for this operation?
Will the Minister also give the reasons the UNHCR has not agreed to carry out the monitoring of the refugees once they have returned to their villages? Will he also say which NGOs he has approached to help with the monitoring, and how long officials in our embassy in Hanoi will continue to monitor the families once they return to their villages?
Lord Brabazon of Tara: My Lords, I have already covered the first point made by the noble Baroness regarding why the operation was carried out so early in the morning. It would have been even more of an unpleasant experience for these people had full media attention been given to them. I have already said that the group consisted of nine complete families. We are not talking about individual children but of nine complete families, one single man and three single females. I think it is right to keep families together rather than split them up. I hope that the House will endorse that approach.
The noble Baroness asked which NGOs had been approached to carry out the monitoring. I was present at a meeting on monitoring with representatives from the British Refugee Council. Obviously, monitoring will have to continue for as long as that process takes.
Lord Eden of Winton: My Lords, I thank my noble friend for repeating the Statement. Will he confirm that the Foreign Affairs Committee in another place was unanimous that repatriation was both necessary and urgent? Should we not in our consideration of this difficult matter keep clear in our minds the fact that the vast majority of these people cannot in any way be designated as refugees from communist tyranny but rather are very poor people who seek better living standards in the capitalist economies of the West?
Is it not also clear that the screening procedures that are adopted have been internationally approved and internationally monitored? Finally, is it not most regrettable that widespread attempts have taken place in the media and on the part of other interested groups to incite resistance to repatriation when in doing so they are acting directly against the best interests of the Vietnamese migrants?
Lord Brabazon of Tara: My Lords, my noble friend is certainly correct in his last point. The point one has to make, as I have done, is that there is nowhere else for these people to go. All the options have been tried. They can either stay in the camps in Hong Kong in conditions which are not particularly good or they can return to their home country. I agreed with my noble friend in his comments on the Foreign

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Affairs Committee in another place, which concluded:
"We accept that the logical consequence of a screening programme is the repatriation of those who have been screened out. We believe that, in the absence of significant levels of voluntary repatriation, however regrettable it may be, there is no alternative to the mandatory repatriation of those who are screened out. We note that these people are fleeing not from persecution but from extreme poverty and that over 50 per cent. of them are under the age of 20 years".
I cannot disagree with a word of that conclusion.
Lord MacLehose of Beoch: My Lords, I too wish to thank the Minister for repeating the Statement and for his subsequent replies to questions which covered all the points I had in mind. However, I wish to say to the Minister what a relief it must be to the people in Hong Kong that the Government have moved on this issue, which was causing so much concern and which without action would inevitably have invited a further influx in March when the winds shift south and it is easy to move up the Chinese coast to Hong Kong. From what the Minister has said today, it is clear that there has been intense and highly expert negotiation with North Vietnam. I congratulate the Minister and the Government on what they have achieved.
Lord Brabazon of Tara: My Lords, I am most grateful to the noble Lord, who has a great deal of experience of Hong Kong. I am grateful for the words he used about the feelings in Hong Kong as a result of the action that we have taken. I shall pass on the tributes that the noble Lord has paid to those who were involved in the negotiations with the Vietnamese Government.
Lord Parry: My Lords—
Lord Denham: My Lords, perhaps the noble Lord, Lord Parry, will forgive me if before he asks his question I suggest to the House that, since we have now been on this subject for 31 minutes and have covered all the issues, after the noble Lord has made his brief comment and my noble friend has answered, we should move on.
Lord Parry: My Lords, I thank the noble Lord for his courtesy.
The Minister will know that the House appreciates his own concern and the fact that he has been able to give us some reassurance on this desperately difficult problem. He will accept that in the run-up to Christmas there is a particular irony in children finding yet again that there is no room in the inn.
Will the Minister tell me whether it is a fact that there are only two principals in the British Government's office in Hanoi, and that that is a tiny office? The country itself is vast and the logistical problems of dealing even with the immediately repatriated people will put a great strain upon it.
Is the noble Lord aware that a great many people will be encouraged to know that this House is being represented and that a further monitoring team is to be sent? There may well be a great many volunteers prepared to help with the monitoring in situ and also to act as hosts to some of these people in this country.
Lord Brabazon of Tara: My Lords, I certainly appreciate the noble Lord's remarks. I can assure him that if necessary the embassy in Hanoi will be increased in size in order to cope with the job that it has to do there.
Lord Glenarthur: My Lords, perhaps my noble friend the Chief Whip will forgive me if I ask my noble friend Lord Brabazon whether he does not agree that there were remarkably few options open to us in dealing with this terrible problem? As my noble friend is well aware, I was closely associated with the problem for some considerable time. The problems last summer were acute beyond belief. There were occasions when the arrival rate during the period of favourable winds to which the noble Lord, Lord MacLehose, has referred, was such that there was nowhere in Hong Kong to put those people. That was a tragedy in itself.
Even if accommodation was found on any of the islands it was far from satisfactory. On one occasion, in order to accept the people at all the boats had to be beached and the people looked after for a night or two before some rudimentary form of accommodation could be rigged up for them. Then we were faced with the problem of tentage and so on at the airport in the north which was being used as a camp. Therefore the option of doing nothing did not exist. I am sure that my noble friend would endorse that fact.
One of the alternatives which some people have suggested, and which has been suggested in the media in the course of the past year, was to push the boats off. That was not an option either. It would have been as horrific as many of the more extreme suggestions which have been noted. Therefore it comes down to the fact that some form of repatriation is necessary—a combination of voluntary repatriation, as we have seen and to which my noble friend referred, and this further repatriation which, as my noble friend pointed out, was endorsed at Geneva in June.
Does my noble friend not agree that it is all very well for those who allow themselves the luxury of criticism on a matter as difficult as this but it is quite another matter to deal with a problem day by day and face up to the responsibilities which the Hong Kong Government and indeed Her Majesty's Government have had to deal with for so long?
Lord Brabazon of Tara: My Lords, my noble friend is quite right. In the position which he held at that time he attended the conference in Geneva in June. At that time boat people were arriving at a rate of up to a thousand a day. I should like to pay tribute again, as did my noble friend, to the Hong Kong Government and the people of Hong Kong for the efforts they have made to accommodate those people. As my noble friend said, no one was pushed away, although that was a policy which was advocated by some people. As my noble friend said, the option to do nothing simply does not exist. That was endorsed at Geneva in June.
The fact is, as my noble friend said, that none of those who have criticised us has come up with any other solution.
Lord Geddes: My Lords, while I thank my noble friend for his Statement and warmly endorse that Statement, would he not agree that the tolerance of the people of Hong Kong has been quite remarkable in this context to date, but they are now very close to the end of their tether? The action which Her Majesty's Government have taken in co-operation with the Government of Hong Kong is, as my noble friend Lord MacLehose has said, the opening of a safety valve in that respect. It is a very important safety valve and must be kept open.
Lord Brabazon of Tara: My Lords, my noble friend, with his experience of Hong Kong, is quite right to say that the tolerance of the people of Hong Kong has been stretched almost to breaking point. The importance of the repatriation exercise is that the message will get back to the boat people in Hong Kong who are not refugees that there is no future for them there or anywhere but back home. I hope that before the next sailing season the message will also get back to those in Vietnam who may be contemplating leaving that country but who are no more than economic refugees that there is no point in leaving.

Contracts (Applicable Law) Bill [H.L.]
5.45 p.m.
The Lord Advocate (Lord Fraser of Carmyllie): My Lords, I beg to move that this Bill be now read a second time. I cannot pretend that it will arouse as much interest as other legal Bills this session. Its subject matter is technical, perhaps even esoteric. Nevertheless, I believe that it is a worthwhile measure and, I hope, an uncontroversial one.
The Bill incorporates into United Kingdom law a convention between member states of the European Community on the law applicable to contractual obligations which was opened for signature in Rome in 1980 and signed on behalf of the United Kingdom in December 1981. All nine states which belonged to the Community in 1989 have signed the convention, and Greece has now also signed it. The Greek accession to the Rome Convention is contained in the Luxembourg Convention of April 1984 and the Bill enables the United Kingdom also to give effect to that convention.
Your Lordships may wonder why it has taken so long for the United Kingdom to ratify the Rome Convention of 1980. The answer lies principally in the need to work out what powers the European Court of Justice should have to interpret the convention. A compromise was eventually reached in December 1988, when two protocols were signed in Brussels conferring jurisdiction similar to that which the European Court has under the European Judgments Convention. The need for a second protocol arose out of constitutional difficulties of the Irish Republic. The Bill gives effect to the first, substantive protocol, but there is no need for it to give effect to the second.
For the Rome Convention to come into force, seven of the nine countries which originally signed it must ratify it. Six have so far ratified, leaving ourselves, the Irish Republic and the Netherlands.
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The purpose of the Rome Convention is to lay down rules to determine which law is to apply to a contract which has connections with two or more countries. It does not affect the substance of our law of contract, but merely enables the courts to decide, in the first place, whether that law applies or not. Nor, indeed, will it involve any substantial changes in our existing rules for determining the applicable law, since the two basic principles laid down by the convention accord with present United Kingdom law.
The Bill puts the rules on a firm statutory basis. It clarifies certain matters which have hitherto been unclear, and by introducing harmonised rules it will make life easier for businessmen and their legal advisers. As long ago as 1969 the Director General for the Internal Market, Mr. Vogelaar, said:
"The lack of unified rules of conflict definitely impedes the free movement of persons, goods, services and capital among the member states".
As we approach the creation of the single market, the Bill will bring a valuable degree of harmony in an area of law which is by no means free from difficulties.
I should like to take this opportunity to thank two of the United Kingdom's negotiating team, Dr. Peter North and Professor Sandy Anton, and also Mr. Anthony Diamond QC, all of whom have assisted the Government in the preparation of the Bill.
The central provision of the Bill is to be found in Clause 2(1), which gives to the Rome Convention, the Luxembourg Convention and the Brussels Protocol the force of law in the United Kingdom. In other words, those three agreements will, if the Bill is passed, become part of our statute law and, once the Act is brought into force, will replace the existing common law rules. I should make it clear at this stage that the Bill is to apply throughout the United Kingdom. It will also apply to contracts with connections between different parts of the United Kingdom but with no other foreign element.
The English texts of the three agreements are set out in the first three schedules to the Bill. Although some of their provisions are purely administrative, I believe that it will be helpful for practitioners and others to have the full texts easily available in this way.
In the Bill we are exercising the right which is granted by Article 22 of the Rome Convention not to incorporate two particular provisions of that convention into our law. The first relates to "mandatory rules", which are rules which cannot be derogated from by contract. Article 7(1) permits the application of the mandatory rules of any country which has a connection with the contract, although the contract is to be governed primarily by another law. I believe that that point might concern the noble Lord, Lord Mishcon. Perhaps I may explain to him that, in our view, if we were to introduce that, it would detract from the principles of certainty and uniformity which the convention otherwise seeks to promote.
The second provision which we intend not to apply is in Article 10(1)(e), which refers questions about the nullity of contracts to the convention.

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Under both English and Scottish law, such questions do not form part of the law of contract, but of the law of restitution or recompense.
Clause 3 of the Bill provides that, when interpreting the conventions, the courts of the United Kingdom are to follow any relevant decisions of the European Court and any principles laid down by it. It also permits reference to be made to the official commentary on the Rome Convention. I should explain that the negotiators of the member states were able to revise the commentary and that our own negotiating team put forward revisions in the hope that it would be admissible in legal proceedings in this country. A similar provision, which may be known to some noble Lords, is to be found in the Civil Jurisdiction and Judgements Act 1982.
Clause 4 enables Her Majesty to make an Order in Council modifying any statutory provision in consequence of any revision of the conventions. An obvious example would be the addition of a reference in the Brussels Protocol to the courts of Spain and Portugal if those countries were in due course to ratify the Rome Convention.
I now turn to that convention. Its first two articles form Title I relating to the scope of the Convention. The convention applies to contracts involving a choice between the laws of different countries. The law applicable to a contract, as determined by the convention, need not be that of a contracting state. Certain matters, however, are excluded from its scope, including most contracts of insurance, which are, or are about to be, covered by other Community directives, contracts which are more appropriate to be dealt with under family law or under company law, arbitration agreements and agreements on the choice of court, and obligations arising under bills of exchange, cheques and other negotiable instruments.
Title II, the uniform rules, consists of Articles 3 to 22, The two fundamental principles are to be found in Articles 3 and 4. The first is that the parties to a contract are free to choose which country's law is to govern it. The second is that, if they do not make a choice, the contract will be governed by the law of the country with which it is most closely connected. There are certain presumptions as to which country is most closely connected with a contract, although those presumptions are rebuttable when all the circumstances surrounding the contract point to it being more closely connected with another country. I should mention one presumption, which is that the closest connection will be with the country where the party who is to effect,
"the characteristic performance of the contract"
has its principal place of business, habitual residence or central administration. This is a novel concept in most member states, including our own.
Articles 5 and 6 make special provision for certain consumer contracts and employment contracts. Their aim is to ensure that, where there are mandatory rules in the law of the country of a consumer's or employee's habitual residence which are designed to protect him, he is not to be deprived
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of such protection by the choice of another country's law to govern the contract. The provisions relating to consumer contract complement those which we already have in the Unfair Contract Terms Act 1977 and will operate alongside them. Article 6 contains rules for determining the applicable law of an employment contract in the absence of a choice by the parties, but it is unlikely that those rules will often lead to the application of a law other than that of the forum. Our courts will therefore continue to be able to apply the mandatory rules contained in the Employment Protection (Consolidation) Act 1978.
I have already referred to Article 7(1), which the United Kingdom intends not to apply. Article 7(2), on the other hand, is a well-established rule in the field of the conflict of laws. It permits the court which is hearing a case to apply those rules of its own country's law which cannot be avoided by choosing a different law to govern a contract.
It is not necessary to go through every article in the convention, but there are some others to which I should briefly like to draw your Lordships' attention. Our own rules on material and formal validity of contracts are not entirely clear. Articles 8 and 9 correspond with what is generally agreed to be the position here and will, I trust, bring certainty for the first time.
By Article 10(1), the law which governs a contract also governs the limitation of actions relating to the contract. Until recently English law was different since it treated limitation as a procedural matter to be governed by the law of the forum and not by the law of the contract. That rule was criticised and was changed by the Foreign Limitation Periods Act 1984. English law now accords with the convention.
Article 16 preserves the overriding effect of public policy. The convention will apply in a contracting state only to contracts made after the date on which the convention has come into force for that state. It does not operate retrospectively. Articles 20 and 21 provide that the convention is not to have precedence over European Community treaties or other international conventions.
I should finally mention the Brussels Protocol. That provides that particular courts in contracting states may request the European Court of Justice to give a preliminary ruling on a question concerning the interpretation of the Rome Convention, the Luxembourg Convention or the protocol itself, if the court considers such a ruling to be necessary to enable it to decide a case pending before it. In the case of the United Kingdom, the courts are the House of Lords and other courts from which no further appeal is possible, and courts sitting in an appellate capacity.
I believe that the effect of the Bill will be to put our rules in this area of the law on a clear statutory basis, as part of a beneficial exercise in harmonisation with our partners in the European Community. I ask this House to give the Bill a Second Reading. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Fraser of Carmyllie.)
5.57 p.m.
Lord Mishcon: My Lords, the House will be grateful to the noble and learned Lord for the lucidity of his explanation of, as I believe he said, this exotic but not exciting Bill. We should also admire his courage, because I have an idea that he has a bad throat. It was therefore very gallant of him to make his explantion as long as he did, and we appreciate that. I should also like to thank him and the Government for their helpful attitude in attaching to the Bill, by way of schedules, the three conventions concerned. As he rightly said, that is a great deal of use to practitioners and is a healthy example to follow in the future.
However, there is one aspect which is not quite so helpful. I hope that it will not be regularly imported into our statutes, although I know that it is difficult when dealing with international matters. Perhaps I may draw the noble and learned Lord's attention to Clause 3(3)—one of our statutes—which states:
"The report on the Rome Convention by Professor Mario Giuliano"
—who I am sure is a most learned gentleman—
"and Professor Paul Lagarde"—
who I am sure is equally a most learned gentleman—
"may be considered in ascertaining the meaning or effect of any provision of that Convention".
That is extremely novel from our point of view, especially when one makes a court the interpreter of what the convention means and one then has someone's opinion on which one has not had a chance to make a submission—
A noble Lord: Are they still alive?
Lord Mishcon:—almost binding the court and parties. Indeed the intervention that has just been made makes we wonder whether the precedent is not extraordinary. One has incorporated into a Bill which we are asked to pass the names of two individuals regardless of what may happen to them. I am perfectly prepared to believe that the two professors will not only live to a ripe old age—which I hope they will—but will never find that their opinions are doubted before their demise. However, if doubts are cast upon them, how odd it will be that we have enshrined into a statute their two names, saying that interpretation is to be guided by their opinions.
I pass to another point. I am sure that this is my fault, but my only excuse for raising this point is that I gave the noble and learned Lord notice of the fact that I intended to do so. It relates to the two exceptions which we have made to the convention. I do not query the Article 7 exception, but I do query the one contained in Article 10, which is headed "Scope of the applicable law". Subparagraph (e) speaks of:
"the consequences of nullity of the contract".
I am sure that it is my fault for not understanding this, but we have in our law of contract the situation in which, for example, where public policy has been breached, the contract is void—not voidable, but void. If a state which is the state whose law is to govern the situation in regard to interpretation and
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the consequences of a contract has a law of public policy which makes the contract null and void, the consequences of that must obviously be ruled on by the law of that country. I therefore do not understand the reason for "the consequences of nullity of the contract" being excepted.
I ask myself—I am afraid I cannot give the answer and therefore have to ask the noble and learned Lord or, if I have taken him by surprise, I shall be perfectly happy to receive the courtesy of a letter afterwards—whether, if one has the nullity of the contract being decided by a court of the country whose jurisdiction and whose law is to be applicable, to leave it at the nullity decision and not be able to deal with the consequences of the nullity does not leave a void. It is a void which at the moment I am unable to fill. I am sure the noble and learned Lord will either help me on that or tell me if he wants to consider the matter further. As I said, I have not given him very much notice of the point.
My next observation is in regard to what was said about the subject not being exciting, as the noble and learned Lord commented. There is one bit of excitement which the United Kingdom can enjoy. As I understand it, seven of the nine states have to ratify before this convention becomes effective. Six have done so. The only three remaining are ourselves, the Irish Republic and the Netherlands. I beg of the United Kingdom to dash into the place of number seven and therefore be responsible for the convention becoming effective, thereby beating Ireland and the Netherlands. I understand that the Netherlands comes into another battle with the United Kingdom very soon in the world of soccer. I can only hope that that game will take place as peacefully as will the United Kingdom becoming the seventh party to ratify this convention and therefore bringing into effect this very desirable international matter of interpretation and jurisdiction.
6.04 p.m.
Lord Lloyd of Kilgerran: My Lords, it certainly appears from the most helpful introduction to the Second Reading of this Bill by the noble and learned Lord the Lord Advocate that there has been much international horse-dealing as to what its contents should be, if that is not too coarse a phrase to raise at this time. The object of the Bill is to enable the UK to ratify the Rome Convention, which was opened to signature by EC member states as long ago as 1980 and was signed by the UK in 1981.
The noble and learned Lord the Lord Advocate has mentioned that there has been a long delay, but I am sure that this delay has been brought to an end by the infusion into the European Court of my friend the right honourable Sir Gordon Slynn, who felt that at last the day had come when the UK should give an indication. However, I must say, prima facie, this Bill does not seem to me to carry forward any useful practical matters to assist those like myself who, for many years, have been dealing with this question of conflict of laws.
I should like to express my thanks to Maire Harman of the Lord Chancellor's Department for supplying me with such comprehensive notes, comments and assurances. I feel I must have regard

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to them, emanating as they do from the Lord Chancellor's Department. I should also like to congratulate, as has the noble Lord, Lord Mishcon, the draftsman of this Bill upon having included copies of the various protocols, conventions and schedules to the Bill to prevent practitioners like myself having to scuttle around to find these conventions in other sources.
I am also grateful to Maire Harman for the use of her words:
"The rectification of the convention will lead to few significant changes in existing UK law".
I am not sure what that phrase in her notes means. I am not sure what are the "few significant changes" that she has in mind. I had a very interesting time dealing with what is known as the conflict of laws in international matters relating to intellectual property, but Maire Harman goes on to say, in paragraph 3 of the introduction to her notes—and I console myself with what she says—that:
"the two basic principles in the Rome Convention accord with those at present applicable under United Kingdom law. First, that the parties to the contract may choose which country's law is to govern it and, secondly, that in the absence of such a choice the contract is to be governed by the law of the country with which"—
and I emphasise these words—
"it is most closely connected".
There is the difficulty. In view of the great advances in technology, what are now the countries with which parties are most closely connected in relation to contracts? I shall return to that matter a little later.
The phrase is very difficult to construe with regard to the field of intellectual property and especially the transfer of technology in this age of technological developments, as I shall mention later. I have already personally apologised to the noble and learned Lord the Lord Advocate for raising points about which I have not given him notice. However, if he were to assure me—even at this late stage—that all is well in this Bill so far as Scottish law is concerned, I might perhaps be tempted to sit down.
Nevertheless I, like the noble Lord, Lord Mishcon, am anxious about the exclusion in Clause 2 relating to Article 7(1) of the Rome Convention. I understand that the UK representatives required the limitation in order to avoid uncertainties and potential conflicts which make it difficult to predict the legal effect of a transaction. Apparently all the other states agreed to the insertion of this provision. However, as a lawyer concerned with the uncertainties of conflicts of laws in presentations to courts all over the Commonwealth, I cannot understand why the UK has once again decided to go it alone to exclude Article 7(1). I agree that Article 7(1) is somewhat verbose. However, as practitioners in the field most of us are accustomed to verbose matters in the question of conflict of law.
Out of courtesy to the noble and learned Lord the Lord Advocate, I should mention that as the term "UK" in this field includes Scotland, for once we have different laws arising between Scotland and the remainder of the UK. Therefore I am sure that Article 19 of the Rome Convention will please and placate the noble and learned Lord the Lord
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Advocate and the noble and learned Lord who sits on the Woolsack.
Like the noble Lord, Lord Mishcon, I could not appreciate why Article 10(1)(e) of the Rome Convention dealing with nullity questions should not have the force of law. However, the noble Lord, Lord Mishcon, has elaborated that point and I accept his presentation of his approach to the matter. I am not acquainted with the subtleties of the law of nullity which apparently may arise in circumstances that I do not know. I again cannot understand why the delegates of the UK contingent decided to go it alone.
Perhaps I may refer to Schedule 1 to the Bill. Paragraph 2 of Article 1 of the Rome Convention sets out eight sub-paragraphs covering large areas of law where the Rome Convention shall not apply. The noble and learned Lord the Lord Advocate referred briefly to some of the matters therein stated. They cover large sections of the law. For instance, paragraph 2(d) excludes from the Rome Convention arbitration agreements to which this Bill applies. Paragraph 2(e) excludes,
"questions governed by the law of companies and other bodies corporate or unincorporate".
It then qualifies and indicates the interest relation to companies corporate or unincorporate that it should apply.
The paragraph states:
"such as the creation, by registration or otherwise".
I am told that the Bill is to introduce certainties. But does "or otherwise" include merger and takeover questions? Are they to be excluded; or are the Takeover Panel's actions in this country to be excluded under the operation of the Rome Convention? In my view, paragraph 2(e) covers a vast area of the law and is full of uncertainties which ought to be resolved. Paragraph 2(d) and (e) seem to me to require further clarification.
There has been a rapid advance in technology since 1980 when the Rome Convention was put forward for signature. I speak as a member of the Parliamentary Information Technology Committee, and I am still its honorary secretary. I speak also as chairman of the Foundation of Science and Technology (which I was supposed to be chairing half an hour ago in the Royal Society). I suggest that the clause should be added to in order to exclude also all matters relating to intellectual properties. In her address at the 50th anniversary of the Parliamentary and Scientific Committee in the Royal Gallery last week, the Prime Minister mentioned that universities ought to pay more attention in their courses on law to the pitfalls of patent law. It seems to me therefore that it would be appropriate to exclude from the Rome Convention all matters relating to intellectual property.
I pray in aid of that rather compendious assertion a reference under research and development in Article 24, Title VI, of the Single European Act. I apologise to the noble and learned Lord for not having brought this point to his attention. The section is headed Research and technological development. It is Article 130F. It states in a mandatory way that,
"The Community's aim shall be to strengthen the scientific and technological basis of European industry and to encourage it to become more competitive at international level".

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Paragraph 3 states:
"In the achievement of these aims, special account shall be taken of the connection between the common research and technological development effort, the establishment of the internal market and the implementation of common policies, particularly as regards competition and trade".
From my reading of the Bill, it seems that so far as concerns UK law that aspect of the importance of developments in this country has not been fully appreciated. I therefore refer again to Article 6 of the Rome Convention. It is entitled Individual employment contracts. In modern days in Europe one finds consultants employed on research and development by several companies in different countries. Therefore Article 6 seems to me to be very much out of date when it states:
"A contract of employment shall, in the absence of choice in accordance with Article 3,"
—that is to say that they have decided what law should apply—
"be governed:

(a) by the law of the country in which the employee habitually carries out his work in performance of the contract, even if he is temporarily employed in another country; or

(b) if the employer does not habitually carry out his work in any one country by the law of the country in which the place of business through which he was engaged is situated".

In deciding important questions relating to employees' contracts the Rome Convention is completely out of date and out of feeling with the modern approach so necessary in European co-operation on research and development.
Two or three years ago I had a case concerning an employee who was not closely concerned with Swedish industry but was encouraged to try to achieve a better award for any innovations he had produced under his contract with many firms. In our view the Swedish law can be understood more clearly as to what award is available without a lot of fuss for an employee who seeks an award. The question therefore arose: where was the place of business at which he was engaged? He was engaged by several companies. Was he habitually carrying on his work in a certain place? Of course he was not. He was wandering from time to time and he could not say where he was habitually concerned with.
Therefore when he asked for my advice I said to him, "Find out what they are going to give you. Ask them to increase it just a little more and accept that, and don't fuss around for the courts to decide what might happen in about three or four years' time if you cannot settle". It comes to a matter of common sense these days. I suggest therefore that intellectual property matters raise such complexities that they might also be excluded from the Rome Convention under paragraph 2.
I was a little surprised, if I may say so with great respect, that the noble and learned Lord did not refer to Clause 6 of the Bill, which says:
"This Act binds the Crown".
Why was it necessary to put in this matter in relation to at any rate a quasi-international Bill of this kind? There are not many crowns about in this world. From a serious point of view, surely the Crown is now involved through its various departments with a lot of serious matters of research involving secrecy.
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Why should this Bill deliberately be set down to bind the Crown?
I feel sure that there must be some kind of fundamental legal question. To use a word that the noble Lord, Lord Mishcon, introduced quite early in his speech, there must be something exotic about this factor that leads, first of all, to the noble and learned Lord not mentioning Clause 6, and the fact that it says that it binds the Crown.
Lord Mishcon: My Lords, I think I used the word "esoteric", but I may be wrong.
Lord Lloyd of Kilgerran: My Lords, I am sorry, but I did not gather what the noble Lord said. I am sure that it was erudite and exotic, but I did not hear what he said. If he would like to repeat it I will sit down so that he can make it clear to me.
Schedule 4 rather excited me. It refers to the Patents Act 1977. At once I thought, "Here we are on good, common ground about the Patents Act 1977", on which I had the privilege and honour of occupying quite a great deal of your Lordships' time. But it only introduces a small but relevant amendment to Section 82 of the Patents Act 1977.
Section 82 of the Patents Act 1977 is merely one section in Part II of that Act which deals with the,
"Jurisdiction to determine questions as to right to a patent".
It contains a lot of other sections that, frankly, I do not understand very clearly even today.
Therefore I hesitate to ask the noble and learned Lord why they have picked out Section 82 in relation to this matter.
Section 82 deals with all kinds of conventions. If I may give away my case and perhaps give a point, with great presumption, that may help the noble and learned Lord when replying to me, it may be that he will invoke Article 20 of the Rome Convention and say that there is precedence of Community law and therefore all is well with the Patents Act 1977; or he may also quote Article 21—"Relationship with other conventions". It says:
"This Convention shall not prejudice the application of international conventions to which a Contracting State is, or becomes, a party."
The patent system is of course in a jungle at the present time with its European patents, its Community patents, and nobody really knows which way to go in this matter. Nevertheless, I am sure that the noble and learned Lord, with his great experience in these matters of general law, will be able to put me right.
In conclusion, I echo what the noble Lord, Lord Mishcon, said. Clause 3 of the Bill is entitled "Interpretation". The practice of the courts, at least when I was practising, was that they would not take much notice of any reading from a textbook unless the writer of the textbook was dead. It was not an authority until the writer of the textbook was dead. I had the privilege of producing a textbook—it was the third edition of Halsbury's Trade Marks and Designs—and often an opponent would, with great glee, open up his copy of that to quote it against me.
It was always a great pleasure to me, particularly when it happened in the Court of Appeal, when my opponent was told that he could not use that,

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however persuasive it was, because so far the author was in our presence and therefore under the ordinary ritual could not be considered to be authority in that sense. That may be so, but I merely echo the words of the noble Lord, Lord Mishcon, that it is surprising that Clause 3 should suggest that a court should have regard to some effusion from two however distinguished persons.
Lord Howie of Troon: My Lords, before the noble Lord sits down, perhaps I may ask whether he recalls our debates on the copyright Act 1988. I am sure that he does. At that time a Bill came before this House in a form which required something like 1,200 amendments from this House after the Committee stage. Would he join me in hoping that the Government have paid more attention to the drafting of this measure than they did to that one? Otherwise, let me say that there will be another 1,200 amendments to this Bill.
Lord Lloyd of Kilgerran: My Lords, I am grateful to the noble Lord for his most helpful intervention. I well recollect the copyright Bill 1988. However, copyright is included in the generic—rather pompous—term "intellectual property". I felt therefore—the noble Lord has supported my view—that intellectual property matters should be excluded from the Rome Convention and should join this large area of exclusion under paragraph 2.
6.28 p.m.
Lord Simon of Glaisdale: My Lords, I apologise for not having put down my name to speak. However, I hope that I may be allowed to sidle into the gap to ask one or two questions of which I have given notice to the noble and learned Lord. First, I should like to raise two matters of which I have not given him notice but which arise from the two speeches that have preceded mine. The first is: which should come first, ratification or legislation? I always understood that our understanding of international law was that, having ratified, we must legislate. I therefore agreed with the noble Lord, Lord Mishcon, that there was nothing to stop us now ratifying well in advance of this legislation passing.
The other matter was the point raised by the noble Lord, Lord Lloyd; namely, why does this statute say that the Crown is bound? I always understood that at least in English law— and the noble and learned Lord, who will deal with the Scottish law in any event, can correct me if I am wrong—a statute does not bind the Crown unless it is expressly stated to do so. It seems to me that the draftsman is entirely right and not open to criticism.
The first point of which I have given notice to the noble and learned Lord arises from Clause 3(3). I am afraid that I do not agree with the noble Lord, Lord Mishcon. The subsection states that a commentary on the convention may be considered in ascertaining its meaning and effect. I venture to emphasise the words "may" and "considered". I rather thought that the noble Lord was conjuring up hobgoblins when he fancied the appearance of a change of opinion or even the death of the person
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whose commentary is made admissible. However, I go further. Having made the provision in the body of one of our statutes, I should like it to be far more general.
The point arises in a case called Black-Clausen v. Papierwerke where it does not fall to a necessary decision. In that case a Bill dealing again with international law had been drafted by a high-powered committee which gave a commentary on it. The commentary made the decision on what it meant clear beyond any doubt. There was a difference of opinion in your Lordships' Appellate Committee as to whether we could look at that. I am bound to say that it seemed quite absurd and obscurantist not to look at something which was so obviously relevant and persuasive. Practically every Session the Law Commission drafts a Bill and makes a commentary upon it. I ask why, particularly now that there is this precedent, should we not consider the commentary. I ask whether the rules should not be clarified now in the light of the right provision in Clause 3(3).
The other matter with which I want to deal is Article 4(1). That deals with the choice of law as to contract. It says what is certainly consonant with present English law—that in default of agreement otherwise by the parties, the law to govern the contract shall be the law of the country with which the contract is most closely associated. I doubt whether anyone would quarrel with that. As I understand it, that is our own present law.
Article 1(2)(c) excludes various contracts from that provision. The only one to which I wish to refer is marriage. It seems to me, on social and juristic grounds, to make entire sense to say that the essential nature of marriage and its essential validity, apart from forms and ceremonies, shall be governed by the law of the country with which the marriage is most closely associated. I raise the matter because the Law Commission in a recent paper was hesitant if not adverse in its attitude. I ask now, in the light of this provision, whether that opinion of the Law Commission should not be re-examined.
The last point I wish to make concerns the style of drafting of the convention. It seems to me quite admirably clear and simple. Why cannot we have our own statutes drafted in the same way.
6.35 p.m.
Lord Wilberforce: My Lords, I also ask indulgence from the noble and learned Lord for entering the debate at this stage. My excuse must lie in the helter-skelter nature of legislation nowadays presented to us. It comes so thick and fast that it is almost impossible to be on top of it. That will also justify the somewhat unprepared and disjointed character of some of the remarks I wish to make.
I am not enamoured as to the prospect of legislating on questions of private international law. That has grown up flexibly through the judges over the years. And the judges have done a fairly good job. When those matters are put into a statute, they are frozen into the text of the statute. It may be that the statute does not have it right. However, here we are. We are asked to legislate in order to incorporate the convention.

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I do not personally feel it necessary to comment on the terms of the convention, as some noble Lords have done. We are stuck with the convention: we either ratify it or do not ratify it. It cannot be amended by discussion in committee. We either have to accept it or not. I find that the convention contains a certain number of novelties. The noble and learned Lord referred to one about characteristics. Article 8(2) is another. There are others which are quite new and possibly quite good. However, it does not seem to me profitable or useful to have discussed them in relation to this Bill.
I have a rather more fundamental point which may be completely misconceived. If so the noble and learned Lord will tell me. It relates to the scope of the Bill which is intended to incorporate the convention. The convention is a Rome—a European—convention. It takes a little time to work that out, but it is quite clear from the explanatory memoranda. Article 28 says that it is open to signature by members of the European Community. Later on there is provision for reference to the European Court at Luxembourg. Therefore, it is clearly a convention entered into between the 12 members of the European Community. As such, it is a treaty between states and binds those states. However, we are not concerned with the binding effect on states but its effect in private law. With this sort of legislation, 'the problem is always to bridge the gap between the treaty obligation involving states, which is in the convention, and the private law result which we are trying to achieve through the Bill.
There is this difficulty. The convention applies as between the 12 members of the European Community when they ratify it. How does it become binding generally, or is it binding generally? I am rather perplexed. I look at the Long Title of the Bill which states:
"An Act to make provision as to the law applicable to contractual obligations in the case of conflict of laws".
That is absolutely general and has no limitation to the European Community. Article 1 of the convention states:
"The rules of this Convention shall apply to contractual obligations in any situation involving a choice between the laws of different countries".
That is made the law of this country by Clause 2 of the Bill.
Let us take the case of a contract entered into between an English company and an American company with a choice of law clause in it. Is this Bill to apply to it? Is it to introduce the rules of this convention? If so, why are they binding on an American business? If there is a contract between a Belgian company and a Norwegian company, possibly making it subject to Norwegian law, is that to be governed by the rules of this convention? I believe that there is a great difficulty in that respect. It is probably not intended that the Bill should be so wide. If the Bill is intending simply to make this law as between members of the European Community and people resident in the Community and carrying on business there, that is well and good and very useful.
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There are many other conventions which apply only in the community. In that case surely we have to say so in the enacting clause of the Bill. I am not pressing this matter at the moment. The noble and learned Lord may not wish to answer the point at this stage. If there is any validity in it, then it can perfectly well be dealt with by a simple provision in the enacting part of the Bill saying that "this Act shall have the effect as between persons having habitual residence or carrying on business in any one of the member states".
That is, I suggest, an important point. I believe it is intended that the Act and the convention should have that effect, but in view of the absolute terms of the Long Title and of Article 1 of the convention, it is a point that deserves consideration.
Another small point I wish to raise concerns Article 7. I am very glad that we have excluded it from the application of the convention. I do not believe it is a case of the United Kingdom standing out alone. I know something about this. It has been the subject of intense debate—jurisprudential commentary and so on—and it is a very controversial matter. It bears every imprint of a compromise. The article begins by saying that,
"effect may be given to the mandatory rules … if and in so far as … those rules must be applied".
It is a nonsense because it is a compromise. It is perfectly well provided for in Article 22 of the convention that we may make a reservation concerning it. I should be very surprised if other states did not do the same. Indeed I should be quite indignant if the United Kingdom had not reserved its position concerning that article.
I do not say anything about Article 10(1)(e) because the noble Lord, Lord Mishcon, has raised a question about it. I am sure that the noble and learned Lord will be able to answer it. I beg your Lordships' pardon in raising these points so late at night. Perhaps the noble and learned Lord will take them on board and deal with them as he thinks fit.
6.42 p.m.
Lord Fraser of Carmyllie: My Lords, I am grateful for the general welcome that has been given to the Bill. Having had some responsibility for draftsmanship I am astonished that from such noble and learned quarters there is some support for the simplicity and clarity of the drafting of a Bill that comes before your Lordships' House. For that we are clearly very grateful.
Some seven years ago in another place I had the unlucky task of explaining why Professor Schlosser and Herr Jenard had found themselves introduced into United Kingdom legislation through the Civil Jurisdiction and Judgments Act 1982 as it now is. I refer to Section 3(3) of that Act. So it is not the first time that we have resorted to this device. Indeed it has been a tendency of the courts of the United Kingdom to have regard to travail préparatoire and similar documents—increasingly so in recent years. It follows the pattern of the Jenard and Schlosser reports and their incorporation into our law as a source to which the courts may look. I hope that a proper construction of this Act will be useful in due course to the courts.

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I take the point that the noble and learned Lord, Lord Simon, made concerning comparable commentaries that are provided in a purely domestic context by the Scottish Law Commission and the Law Commission for England and Wales. It may be as much a matter for the courts themselves to decide what they are prepared to look to as it is for me at this Dispatch Box to give an instruction to them as to what they might properly have regard to concerning the proper construction of statutues.
A number of important matters have been raised. I am sure that noble Lords will appreciate that they are somewhat detailed. I hope therefore that I shall be forgiven if I do not cover all of them. I am also grateful to the noble and learned Lords, together with the noble Lord, Lord Mishcon, who indicated that they were not concerned about Article 7 and who appreciated that its incorporation into the United Kingdom would cause much greater difficulties than it would resolve. I hope that the noble Lord, Lord Lloyd, will appreciate that he is outnumbered on this aspect and that he will retreat gracefully.
I doubt whether I shall secure quite the same graceful retreat by either the noble Lord or the noble Lord, Lord Mishcon, in respect of Article 10(1)(e). I hoped that I had explained it. The article deals with the consequences of nullity of a contract. If incorporated, that would be included among the aspects of the contract which are to be governed by the law applicable had the contract been valid. I say this cautiously as a Scots lawyer. I understand that under English law the right to recover money paid under a void contract is part of the law of restitution and not of the law of contract. In Scotland it is certainly part of the law of recompense rather than of contract. In such circumstances it was considered inappropriate for it to be applied in the United Kingdom.
Lord Mishcon: My Lords, I am grateful to the noble and learned Lord for giving way. I do not intend that this matter should degenerate—I believe that is the right word—into a debate because he is being so kind in answering the questions. Is the Minister prepared to answer this question or to consider it: what is the point of a court deciding that there is a nullity or that a contract is void but being unable to deal with the consequences of that nullity? The answer may be that the court does not have jurisdiction over the consequences. That appears a very odd situation. I apologise if I am talking nonsense.
Lord Fraser of Carmylie: My Lords, there may be some confusion here. What we are seeking to determine is not which court should have jurisdiction but the law applicable to it. I accept that in certain circumstances, where the consequences of a void contract have to be considered, they may have to be considered in relation to another law. The narrower point that I am making concerns the convention and how it deals with contracts. The law in Scotland—and I believe also in England—deals with the consequences of a void contract as part of the law of restitution or recompense as the case may be, and not as a matter of contract. It may be as narrow a matter as that.
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The noble and learned Lord, Lord Simon of Glaisdale, asked whether it was not more appropriate to proceed to ratification first and to follow that by legislation. While that is a course that has been followed it has not been invariable. It appears to me that the order we are following of signing the convention, introducing the legislation to allow the ratification and then ratifying is an appropriate order to follow.
I was asked by the noble and learned Lord why marriage was excepted. The emphasis of the convention here is on commercial and contractual matters. It may be that different considerations apply in relation to family matters. I believe that traditionally or customarily such issues have been dealt with in rather more specialised conventions such as the Hague Convention on trusts besides other conventions on matrimonial matters.
Lord Simon of Glaisdale: My Lords, it is perfectly true, as the noble and learned Lord said, that in substantive law the validity of marriage is otherwise dealt with, but it is in a high state of confusion. My point was: why not put it in order on the lines that this convention stipulates for commercial contracts?
Lord Fraser of Carmyllie: My Lords, I appreciate what the noble and learned Lord says. I hope that I have at least given him some indication of why a different view has been taken of it in this Bill.
The noble Lord, Lord Lloyd of Kilgerran, suggested that patents and intellectual property should be omitted. This is a Bill of fairly general scope. The convention was carefully negotiated. I was not aware that there had been any earlier representation that such a broad area of interest should be excluded. He also asked a question regarding the Patents Act 1977 on that part of the Bill which relates to consequential amendments. I fear that the noble Lord will have to look to the other consequential amendments and also forget the earlier legal language that he learnt of referring to "the proper law". If he looks to those amendments he will see that there is nothing mysterious going on here. In all the consequential amendments "the proper law of" has been deleted, and substituted therefore is "the law applicable to". There is nothing more complicated in it than that.
The noble and learned Lord, Lord Wilberforce, asked about scope. There are wide questions. In view of the time I wonder whether I may be allowed to write to the noble and learned Lord at a later stage to give him a full and proper answer.
I am grateful to the noble and learned Lord for his brief assertion with regard to Clause 6. He asked why the draftsman had made reference to the Crown. I was recently a litigant before your Lordships' House where the matter of the application of statutes to the Crown was considered. The successful outcome to that litigation would seem to indicate that the draftsman was correct in the approach that he has taken here.
I conclude by saying to the noble Lord, Lord Mishcon, that I was not surprised that he spotted with an eagle eye that it only required ourselves to ratify this convention to ensure that eventually it

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would take effect. Given the welcome there has been for the provision in this House this evening, I hope that it will make progress through both Houses without difficulty and that we can be united in achieving that single objective.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Teachers' Pay and Conditions Act 1987 (Continuation) Order 1989
6.53 p.m.
Viscount Davidson Viscount Davidson rose to move, That the draft order laid before the House on 7th November be approved [31st Report from the Joint Committee, Session 1988–89].
The noble Viscount said: My Lords, I should like first to express a warm welcome and my congratulations to the noble Baroness, Lady Blackstone, on her first appearance on the Opposition Front Bench. With respect, I can say to her colleagues on that Bench that her presence there will without doubt enhance both the appearance and the intellectual quality of it. I look forward to our exchanges in future.
Section 6 of the Teachers' Pay and Conditions Act 1987 provides that the Act shall expire on 31st March 1990 unless it is continued in force for a further year by an order laid before and approved by resolution of each House. The order now before the House, which was approved in the other place on 5th December, provides for the Act to continue in force for a further year, until 31st March 1991. This is necessary to enable my right honourable friend the Secretary of State for Education and Science in due course to give effect to the teachers' pay settlement for 1990–91, following the report of the Interim Advisory Committee due next January, and consultation on its recommendations. If the life of the Act is not extended in the way proposed it will not be possible to deal with the 1990–91 pay settlement.
The Government always hoped to be able to put new permanent pay determination arrangements in place in time for the 1990–91 settlement. But we have never expected that it would be easy to devise new pay determination arrangements which to be worth while would need to be permanent, stable and effective. The deep differences of opinion between the six competing teacher unions, the employers and the Government which were very evident during the events which culminated in the failure of Burnham, the passage of the Teachers' Pay and Conditions Act 1987 and the establishment of the Interim Advisory Committee made that only too clear. The problem is not to obtain complete agreement on new pay determination arrangements—that is probably unattainable in any circumstances—but enough to ensure that they can operate successfully and are likely to endure. More time is needed to achieve that. So it is necessary for the present arrangements to be in place for one more year and that is why the order has been laid before the House.
In 1987 the Government's immediate concerns were to bring pay and conditions together and to establish a proper career structure for teachers. This was achieved in the 1987 settlement which gave teachers a 16.4 per cent. pay increase. Aspects of that settlement which were controversial at the time are widely welcomed now. Incentive allowances have proved their worth, and following the recommendations of the Interim Advisory Committee their introduction has been speeded up so that there are now some 170,000 available in schools. The effectiveness of the Interim Advisory Committee itself has been widely praised, and rightly so. I should like to pay tribute to the committee for all the hard work it has put in and is currently putting in.
In October 1987 the Government published a Green Paper discussing the question of new permanent teachers' pay machinery. In it were stated three key principles relevant to the establishment of new teachers' pay determination machinery which are in the interests of the education service and the nation as a whole. First, it should be designed to provide that settlements have due regard to the need to recruit, retain and motivate sufficient teachers of the right quality; secondly, it must ensure that settlements support effective management of the schools and provide for proper career-long development and incentives for teachers; and, thirdly, it should be designed to ensure that settlements have due regard to affordability and to the needs of the national economy.
The Green Paper discussed a number of different possible future pay determination arrangements and proposed the establishment of a teachers' negotiating group with the Government in a majority on the management side and with an ability for the management side to break deadlock by imposing its proposals subject to the approval of Parliament.
It became clear from the written responses to the Green Paper from the interested parties and from the views expressed during meetings which the then Secretary of State held in the autumn of 1988 that there continued to be widely differing views about the best way forward. In particular, there was no basis of agreement on such fundamental features as the role and powers of the Government, how to deal with a breakdown in negotiations and how to cover the interests of heads and deputies.
There was no prospect of meeting the original aspiration of having new permanent machinery in time for the 1990 settlement, and no advantage in trying to rush things to this end. The subject is too important and too much hangs on getting things right for it to be sensible to do that.
It was against this background that the then Secretary of State announced in July that he was arranging a further series of meetings with the teacher unions and employers at which he saw the discussions as ranging more widely than the proposal for a teachers' negotiating group set out in the October 1987 Green Paper. He recognised that it would not be easy to find a solution which was acceptable to all parties but reaffirmed the importance of getting the new arrangements right. He recognised that this would take time and said

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that he was accordingly asking the Interim Advisory Committee to sit for a further year to give that time. He also said that he would in due course ask Parliament to approve a consequential one year extension of the Teachers' Pay and Conditions Act 1987. That is what we are considering today.
Your Lordships will rightly be concerned whether the extension which is proposed today will enable the Government to bring forward legislation to establish new permanent machinery in the next Session. I cannot today anticipate what will be in the next Queen's Speech, but I can reaffirm what my right honourable friend the Secretary of State told the other place last week—that that is his aim.
At the meetings held in July three new options were outlined for consideration: first, negotiations between employers and unions with necessary safeguards for the Government's interests; secondly, a permanent IAC-type body, possibly linked to a no-strike agreement; and thirdly, a movement towards greater local flexibility which might lead to individual LEAs or schools opting out of national negotiations.
My right honourable friend the Secretary of State has just completed a helpful and constructive round of meetings with the teacher unions and employers at which he has heard their views on each of these options. Needless to say, there is a wide variety of views. He now needs to consider the position taking into account the responses he is receiving, not only from those he has met formally but from others who are putting forward views. I am sure that that will include the views put forward this evening. The Government do not underestimate the difficulties, but my right honourable friend believes that there is a strong desire on all sides to make progress. He has made it clear that he intends to pursue this vigorously.
In the meantime, this order is needed to pay teachers an increase next year. I commend it to the House and ask that noble Lords give it their approval.
Moved, That the draft order laid before the House on 7th November be approved. [31st Report from the Joint Committee, Session 1988–89].—(Viscount Davidson.)
7 p.m.
Baroness Blackstone: My Lords, I am most grateful to the noble Viscount for his kind remarks. I greatly look forward to debating with him on many future occasions. However, I am afraid to say that I do not think I shall be able to reciprocate the kindness he expressed in his general comments in what I have to say about the proposals in the order before us today. This is a sad day for education and a sad day for teachers. I say "sad" because we are witnessing yet another broken promise to the teaching profession.
I do not wish to seem pompous, but governments who fail to fulfil their commitments and do what they promise to do eventually lose the support of those who elected them. Noble Lords may have noticed that the opinion polls are, perhaps, reflecting that fact at present.
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The fact that the Government have yet again reneged on their promise to restore a fundamental right in a democratic society that employees, or the representatives of employees, should be able to negotiate their terms and conditions of service is yet another nail in the coffin of their credibility. Why should teachers, or others for that matter, believe what the Government say when their promises are not fulfilled?
Perhaps I may remind noble Lords of the sorry history of this matter. The last time teachers were able to negotiate their pay was way back in 1986. Then, early in 1987, the Teachers' Pay and Conditions Act came into force. Few people will want to defend the old Burnham Committee, which had become an over-cumbersome shambles. I recognise too the great difficulty in replacing it; indeed, it is a very complex matter. However, the shambles of Burnham is not the point at issue here. The point is that, when the Act which we are now being asked to extend was introduced, it was made absolutely clear that it was a temporary measure. In 1987 in answer to a Question in another place, the then Secretary of State said:
"I do not think it will be possible to get agreed new permanent machinery by April 1988. However, that does not mean that we will not be able to get it in place by April 1989—that is, before 1990—and we must strive to do that".
Clearly the Secretary of State did not strive very hard, since we are nearly nine months past April 1989, by which time he implied it would be in place. Little progress has been made since that date, or earlier, in developing proposals for a new system—despite what the noble Viscount said about recent meetings with trade unions. Indeed, all Mr. Baker's strivings consisted of was one round of meetings with interested parties in the summer of 1988 and some tentative proposals given across the table to the unions in July 1989 which showed little sign of having been thought out. In fact, they were really very much lacking in coherence.
What on earth was the Secretary of State doing for all that time? It is difficult to know whether it was deliberate procrastination, whether it was mere inefficiency, or whether it was a case of too many eye-catching initiatives and gimmicks, so loved by the previous Secretary of State, leading him to neglect something less publicity generating but more important like devising the proper machinery for teachers' pay negotiations.
While nothing was apparently going on in his department, the last Secretary of State and his Minister of State continued to assure Parliament that new proposals would be in place. Early in July 1988 the Minister of State, Mrs. Rumbold, when referring to the interim arrangements lasting until 1990, said:
"The Government have always made it clear that that was the target date for establishing and having in place the permanent machinery and that remains so".
In January 1989 the Secretary of State, Mr. Baker, also in reply to a Question in another place, said:
"The Government hope to introduce new permanent machinery in time for the 1990 settlement".
As a consequence of the extension of this Act by order and of the Government's broken promises to

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Parliament and the unions, it will now not be until 1991 that teachers' fundamental rights are restored. Will the noble Viscount now assure the House that there will be no further delay in the matter? I heard what he said about the Queen's Speech next year, but this matter has gone on for far too long. Can he assure us, therefore, that by 1991, after five years of having their salaries imposed from above, teachers will be treated as proper partners in the pay negotiation process? If not, and if the noble Viscount cannot confirm this, I have little doubt that the unions will make a further complaint to the ILO. Should that happen, Britain's reputation in Europe, and elsewhere, as a model of fairness in the application of democractic rights will be dented yet again. Indeed, it has been dented quite often during the past 10 years.
When the teachers' organisations first complained in 1988, the Government were found to be in breach of ILO Convention 98, Article 4. I am afraid to say that the Government's defence was dismissed. The ILO ruled that the Interim Advisory Committee, set up after Burnham was abolished, did not give effect to the fundamental principle of voluntary negotiation of collective agreements contained in the convention. I do not doubt that the Interim Advisory Committee has been doing its work to the best of its ability but it should not be allowed to continue.
The ILO also asked its committee of experts on the application of conventions and recommendations to follow developments in the situation. No doubt it is doing so at present. However, for how much longer will the Government continue to ignore an international convention to which they are a party? Do we want our signature to be seen as worthless by the rest of the world? Can the noble Viscount, therefore, say how the Government will respond to further questions from the ILO?
The frustration and anger created by denying teachers the right to negotiate their pay and conditions must be seen against a growing demoralisation in the profession. In turn, this is leading to a serious shortage of teachers which is worse in some subjects than in others and worse in some parts of the country than in others.
Teachers are faced with a wide range of changes at present; for example, the national curriculum, new forms of assessment and local financial management. Those are enormous changes, which require very significant adjustment. Moreover, much extra work is entailed. At the same time, because of under-investment in buildings, many teachers often have to work in pretty poor working conditions. In the inner cities they are at the raw end of conditions which prevail in the most deprived areas. They also have to cope with difficult children and great skill is required to motivate and teach such children effectively.
Large numbers of teachers are leaving the profession. Four out of 10 teachers leave within five years of entering. Three out of 10 who qualify as teachers do not enter the profession the following year. Moreover, the proportion of graduates who entered teaching fell from 8 per cent. to 4 per cent.
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between the years 1980 and 1988. If that trend continues, we shall be in a most serious situation.
We have already witnessed the appalling spectacle of children being sent home from school because there are no classroom teachers available to teach them, especially in some parts of London. Thousands of secondary school pupils are being taught subjects such as physics by people who have no qualification in the subject.
One of the reasons the Government have been so reluctant to participate in the Lingua programme is that we are so short of modern language teachers. In fact, it will be most difficult to deliver the national curriculum requirements in modern languages, let alone the Lingua programme, because of those shortages. If we are to avoid a really serious crisis there must be greater recognition by the Government of the central role of teachers in our society and more appreciation of the efforts they make on our behalf.
I welcome some of the comments made by the noble Viscount opposite as regards the measures which the Government intend to take to restore teachers' morale. Perhaps he will also say how we can get out of the current mess in which the number of people with teaching qualifications who are not teaching is equal to the number of those who are doing so.
One way of resolving the problem must be to pay teachers more. I welcome the increase to £600 million in the envelope provided for the Interim Advisory Committee. However, I doubt that it will be enough. Moreover, I cannot see that it is desirable to set such cash limits before discussions about needs have even begun. What is required is a radical restructuring of teachers' pay to provide much more generous rates than at present. The pay of teachers relative to that of other occupational groups is much worse than in many other European countries.
I welcome the fact that in his remit to the IAC the Secretary of State has asked it to look at the special problems of inner London and the pay of head teachers and their deputies; but it is the experienced classroom teachers who should be paid more if we are to attract more people into the profession and, what is more important, keep them when they arrive. If teachers or potential teachers are to feel that they have the respect they deserve they cannot continue to have pay settlements imposed upon them without proper negotiations. For those reasons, this side of the House cannot support the order.
Lord Ritchie of Dundee; My Lords, I too should like to thank the noble Viscount for his clear exposition of the matter that we are discussing. I cannot give it any warmer welcome than has been given by the Benches next to me. I echo everything said by the noble Baroness, Lady Blackstone. What worries me in particular is that weighty matters such as this are discussed in your Lordships' House at a time when there is a small presence, the House cannot be given the opinion of a large number of your Lordships and we cannot vote upon it. These matters are weighty. We are prolonging by a year the suspension of negotiating rights for an important

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profession. When the Bill was first brought in in 1987, a number of us were concerned at the possibility of that happening. It has happened as we feared. We devoutly hope that it will not continue happening.
There is no need for me to rehearse everything said about the situation in the teaching profession by the noble Baroness. The education service is going through dark times. For all the much vaunted improvements of the Education Reform Act, there is a serious shortage of teachers, especially in London, where children are being sent home because they do not have a teacher. That is an appalling condemnation of the Government's policy over the past few years. I need say no more about that aspect, but it is evident that one of the first steps that could and should be taken to encourage teachers and restore their morale is to restore their negotiating powers.
So far as I can gather from the NUT, the events of the past few years have been as follows. The Teachers' Pay and Conditions Bill was published in November 1986. Immediately afterwards there was a meeting between the big teacher unions (the NUT and the NAS) and the Secretary of State to protest at the abolition of teachers' rights. In April 1987 the first order for teachers' salary structures, levels and conditions of service was issued by the IAC. In July 1987 there was a deputation from the TUC-affiliated unions to the Secretary of State. In October the Green Paper was published. A deadline for responses to the Green Paper was set for January 1988. From then until September 1988 nothing apparently happened. The Secretary of State received the responses in January 1988 and nothing happened until September when the NUT met the Secretary of State for Education to discuss the proposals in the Green Paper; and then nothing happened again until July 1989 when there was another meeting between the NUT and the Secretary of State for Education.
Those time lapses are unaccountable. Perhaps the Minister can explain them. It is exactly what we feared would happen when we discussed the Bill. The months would go by and the Government would know perfectly well that all they had to do was to choose a quiet time such as now and obtain the extensions that they required.
It is over three years since the publication of the Bill. Meanwhile, as the noble Baroness has said, in May 1988 the ILO found the UK in breach of Article 4 of Convention 98 on free collective bargaining. Three main proposals were put forward in the Green Paper. One was for a national joint council which was favoured by all the teacher unions except the Professional Association of Teachers. Another was that there would be a review body. That was supported by the Professional Association of Teachers only. I agree that the situation is awkward. Finally, the Government's option was a teachers' negotiating group. The union found that difficult to accept because it had no ultimate opportunity for arbitration.
Paragraph 7.44 of the Green Paper states:
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"It could not be right for the management side to submit to arbitration when it has already offered the maximum that can be afforded".
That is the stumbling block for the union. Somehow those difficulties must be got over. It may be my stupidity, but I cannot understand why it is necessary to postpone the ending of the committee and the setting up of negotiating machinery for a whole year to bring into effect the pay settlement for 1990–91 agreed by the committee. How long will that continue? The Opposition fear that it could go on indefinitely.
The committee has spoken highly of the teaching profession. Its words have an important resonance to me. The committee says in paragraph 6 of its introduction to the second report of the Interim Advisory Committee which was produced in February this year:
"As last year, the Committee has been impressed by the commitment and dedication of teachers in all types of schools visited. Despite some of the public criticisms aimed at teachers over recent years, which happily Government spokesmen are now going some way to redress, we found a high degree of professionalism in support of the education of the nation's young people".
Those are important and impressive words from the committee considering the matter. I hope that the Government will take those words to heart and with all speed restore teachers' basic rights to negotiate their own pay.
Lord Dormand of Easington: My Lords, even for this promise-breaking Government, the order plumbs new depths. Ministers have given unequivocal undertakings to restore the negotiating machinery by March 1990. Some of them were given outside Parliament and some in another place. We assumed that they would be implemented. The Secretary of State has talked about,
"the deep differences of opinion between the six teacher unions"
as the main reason for not having the new arrangements in place for April 1990. I believe the argument to be suspect, to say the least.
The NUT and the NAS/UWT, separately or jointly, through the TUC have met the Secretary of State on no fewer than five occasions to discuss the restoration of negotiating rights and/or the Government's proposals for new negotiating machinery. That is one indication that there has been plenty of time for the Government to have new negotiating machinery in place in time for the 1991–92 pay round.
Responses to the Green Paper had to reach the Secretary of State by 29th January 1988, but consultations with the unions did not begin until September of that year. That point has already been made by my noble friend and by the noble Lord, Lord Ritchie. To repeat it emphasises how important it is. We are entitled to know why there was such a long delay, particularly when the Government keep repeating that they regard this issue as of considerable importance and urgency.
There has never been more agreement among teachers' unions simply because the Teachers' Pay and Conditions Act 1987, is an affront to the principles of trade unionism. We are not talking

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about the details of what that pay and those conditions are. We are talking about the right to negotiate, which all modern civilised societies accept as normal—rights which in other countries are taken for granted.
Perhaps on this side we have been a little naive. This is the Government which took away from workers at GCHQ the right even to belong to a trade union. And there have been no fewer than six employment and trade union Acts which have eroded the rights of trade unionists on a wide range of issues. Noble Lords will know the kind of thing I am referring to. The difference in this case is that the Government have broken a firm commitment for the flimsiest of reasons. It is no wonder that the teachers' unions are united as never before.
That is not the whole story. The Interim Advisory Committee has been told that there is a limit to what it can do. The Secretary of State says that he has provided for the teachers' pay bill for 1990–91 to increase by the "fair and substantial" sum of £600 million. He calls it "fair and substantial" against a background of teacher shortage and the lowest morale in the profession ever known. Again, that has been stated already in the debate.
I am sure that the members of the IAC are most worthy and intelligent people; but I sometimes wonder how they react to being asked to do such an important job with both hands tied behind their backs. I was interested to read an exchange in another place on 4th July when the then Secretary of State, the right honourable Kenneth Baker, said that conditions could not be so bad in the teaching profession because 25,000 people had been recruited to teaching. When pressed to say how many people had left in the same period, he replied 25,000. So much for dealing with the teacher shortage. How is the IAC, in its straitjacket, to deal with the problems? The answer is that it cannot. The whole structure is as artificial as it is unnecessary.
I turn to the breach of the ILO Convention 98, Article 4. On 26th May, following a reference by teachers' organisations, the Government were found to be in breach of ILO Convention 98, Article 4. The ILO ruled that the Interim Advisory Committee system for determining teachers' pay and conditions of service did not give effect to the fundamental principle of voluntary negotiation of collective agreements which, as your Lordships will know, is contained in the convention.
In evidence to the Select Committee on Education on 28th October, the present Secretary of State said:
"The ILO have indicated that they are satisfied within the terms of the convention with what we are currently doing about the discussions with employers and unions".
The National Union of Teachers informs me that the information officer at the ILO office in London told it that there had been no statement from the ILO saying that it was satisfied with the Government's progress. The NUT has therefore lodged a further complaint with the ILO over the Government's delay in conforming with the ILO's ruling and the extension for a further year of the Teachers' Pay and Conditions Act.
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There is a fundamental difference here of the utmost importance, a difference which calls for an immediate explanation from the Minister. I hope that we receive it when he replies to the debate. I hesitate to say that the House is being misled; I certainly do not say that. But the Government must make it abundantly clear where they stand on the ILO's ruling.
It will not be the first time that this Government have decided to pick and choose from their international obligations. But this is at the very heart of the order before us tonight. We are entitled to a full account of how the situation has arisen. In June 1988, the noble Baroness, Lady Hooper, replied to a Question in your Lordships' House concerning the Government's response to the ILO decision by saying that,
"as a party to the ILO convention naturally we take into account its pronouncements. That is what we intend to do in the context of the present teachers' pay and conditions negotiations".—[Official Report, 24/6/88; col. 1055.]
That clearcut, unequivocal statement was made 18 months ago. Here we are today, after promises and yet more promises, having to listen to still more excuses from a government who are bringing a new definition to the word "truth". Any objective observer would recognise the justifiable grievance which teachers have about the way in which they have been treated since the imposition of the Act. They have worked hard to implement the many and fundamental changes which are taking place in education such as those to which my noble friend from the Front Bench referred. They have done it without disruption. I suspect that other professional organisations would not have given the Government such an easy ride as they have had.
Despite this co-operation, the teachers see a government depriving them of basic rights and imposing a cash settlement which incidentally reduces their standard of living. While pretending to be a government of law and order, they are flouting in the most disgraceful way a clear directive from the International Labour Organisation.
I have always felt that one basic reason for troubles in the world of education under Tory governments is that they have no real commitment to state education. They send their children to private schools where the system is cocooned from the kind of trouble we are debating today and from other issues constantly referred to in your Lordships' House.
This is yet one more sad day, not just for teachers but for the education of the children of this country. The Government are placing what might well prove to be an intolerable strain on the professionalism and dedication of our teachers. Let the Government say tonight in the clearest possible terms that this really is the last occasion on which teachers will be asked to forgo such basic rights. I get no comfort from what the Minister said tonight. If I heard his words correctly, he said that the Secretary of State was aiming to put it right next time. I find that quite a disturbing phrase. If the Government do not, they themselves will have to accept the consequences.
7.28 p.m.
Lord Houghton of Sowerby: My Lords, I see that we still have to deal with the Scottish clergy widows. Widows are very impatient people these days, so I had better be brief. There has been trouble over teachers' pay ever since I can remember. That dates back to about 1912. I had my share of it 13 years ago when, at this time of year, a committee over which I presided was beavering away late into the night in order to get a report completed and printed by Christmas and a £ 100 advance on arrears of pay in the pockets of every teacher. For several months before that when we had our lunches alongside our work there were bottles of Teacher's whisky on the table. None of us dared touch it. Not until we had completed our report did we drink any of it, and then there was soon none left. But the serious part of this is that we were trying to do an impossible job in too short a time. I believe the same thing will happen again. Whenever there is a target that can be extended, it is nearly always extended. When there is a target that cannot be extended, there is nearly always a desperate rush at the last minute. That appears to be human nature.
I regret two things about my inquiry. One is that we were not allowed to deal with conditions of service and the second is that I was not allowed to say what I wanted to say in the chairman's introduction. As regards conditions of service, no one seemed to want them dealt with alongside pay. There was some magic about teachers which decreed that they were in a professional vocation and they did not have conditions of service. They worked, they taught and they did, but they needed no conditions of service. Teachers are very proud of what they call voluntary services. They carried out voluntary services with a feeling that they were doing something special. They also thought that, in case of difficulty, there was something they could threaten to withdraw.
I had never been used to negotiating pay without conditions of service because they are very closely tied together. However, in the event we did not do so. Perhaps I should have mentioned a third thing I was disappointed about. That was that there was no time to consider the future structure of staff and employer relations in the teaching profession; in other words, to see what could be put in the place of Burnham, which had proved a failure. If that had not proved a failure, we would not have been appointed at all. We were appointed to do what Burnham's system had failed to achieve. It was not the first time that Burnham had failed to solve the problem. I remember this problem from years before when Burnham was under constant criticism. It was always difficult to find the answer.
However, everyone was in a hurry. The Government wanted the report quickly and the Scottish teachers were already on strike. They were nearly always on strike. The English teachers were restive. They have nearly always been restive. We were told that we must get the report out by Christmas. We did it but, by Jove, it was a difficult job. I have never met a committee—and I have presided over many—that worked so hard to find an answer to the problems. What is wrong here? We
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hear that the Minister responsible for the matter is trying hard and that he has issued a list of firm principles. We hear that he is holding discussions and other things, but in his speech in another place the Minister said he was heartened by the present round of talks with the unions that had begun in July. Those talks must presumably be bearing fruit by now.
Some blame the difficulty in getting a satisfactory machinery for settling teachers' pay upon the unions. They say there are too many unions, that they are in conflict with each other, that they seek members from each other, and other such things. I admit straight away that there is a great difficulty there. Some of the teacher unions are where they are for historical reasons and not for vocational reasons. They derive from the past. As unions they have wanted to maintain their livelihoods and work and so they have adjusted themselves to the new situation without a clear role. However, it is not the unions which are the trouble here. I can say from experience that it does not matter what diversity there is among unions; one can get unity among them if one sets about it the right way. The right way is that at the end of the day there has to be one voice or one set of voices. That is the basis of negotiation, and it rarely ever fails.
However, the real trouble with teachers' pay occurs on the other side, among what are called the employers. Instead of one employer we have a three-headed monster which comprises the local education authorities, the Department of Education and the Treasury. Those are the employers. It is astonishing that all the local education authorities—there are lots and lots of them under different management, with different outlooks and in different geographical locations—have been rolled into one for the purpose of negotiations on teachers' pay. They are the employers. However, they are dealing with the hybrid state of funding the education service. This hybrid state comprises local authority interests, because of local government control to an extent and the obligation for financial support to a considerable extent, and the Government, who have a very big interest in their side of the account.
When the employers can become one, when they are able to settle their position as employers and deal with the employees and when they can settle their differences and come as a body for negotiation, then there is a very good possibility of getting agreement. However, it does not work that way. There is so much bickering going on between local authorities, the Treasury and the Department of Education that the unions do not know where they are. To deal with this matter comprehensively and satisfactorily would involve a complete change in the funding of our education service, or at least a big change in the funding of salaries and conditions of service of teachers. That does not necessarily mean that education as a system would be controlled by central government. However, it means that one body would be responsible for the recruitment, the salary structure, the requirements and all the other conditions of employed teachers. That would also

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introduce a great deal more mobility into the teacher service.
It is quite ridiculous that jobs have to be advertised to the extent that they are and that applicants have to appear before local education authorities in large numbers before appointments are made. One finds an element of political influence at work which is quite disturbing. The Royal Commission on Standards in Public Life discovered some very worrying procedures in local government. In one local authority appointments for school caretakers were dished out to the different wards in the local Labour Party and no one else got a look in. I am not saying that the same thing occurred with teachers' appointments. But there is not the slightest doubt that the outlook of local education authorities on politics and social affairs finds its way into the selection of teachers.
However, I do not suppose that what I have proposed will come about, so the Government and the teachers' organisations will have to grapple with the system as it is. They will find that to obtain a satisfactory system is a very tough job. I wish them well, but I sincerely hope that we shall not have this matter dragging on. It makes teachers feel that in some way they are unfit for the responsibilities of negotiation of their salaries and conditions of service. They feel that they are sub-teachers in terms of prestige, standing and sense of responsibility. That is very bad. There are so many factors in the education service at the moment which are lowering morale among teachers. The spirit of the teaching profession is too low for comfort from the point of view of the efficiency and well-being of the education service. Teachers now have to grapple with a flood of circulars and directions, guidelines and the rest of it from the Ministry about the curriculum and all those matters for which the Minister now has responsibility under the Education Reform Act. That is very unsettling.
Some posts which have been securely fixed in the local education system are apparently to be floated out to contract. That is because no local authority wants to maintain the posts on the payroll if they can be put into roving commission and the services obtained when needed and paid for by the authorities as they go along. I refer in particular to teachers who are looking after children with special needs. It looks as if in some education authorities their posts are to be put into a floating pool without the security that the teachers would ordinarily have. All that is most unsettling.
Teachers believe that when head teachers apply their minds to their budgets they will try to persuade the senior staff who are at the top of the incremental scale to leave so that someone can be appointed who is at the bottom of the scale in order to balance their budgets.
There are all sorts of uncertainties and fears abroad in the teaching profession at the moment. One of the issues which must be settled is the machinery through which teachers can raise all their troubles and express them in terms of negotiated conditions of service and remuneration. That is most important. However, as soon as the Government
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have a review body of this kind they become lazy. They think that it will see them through. The Minister thinks that it will last for his time and he will be in another post before the period expires. It will then be somebody else's job to deal with the problem and he will be so pleased at being promoted that he will not mind finding a tough nut waiting for him.
I find the situation most dispiriting. It does not help to reward those who were engaged at different times. That does not solve the problems which neither the profession nor the Government seem able to solve themselves.
I ask forgiveness for burdening the House with this diatribe. However, having seen what has happened in the 13 years since the report was published, and its aftermath, I have had a good deal to worry about. Somehow or other the biggest pay rise given to teachers, which had the right spirit behind it and was accompanied by a pretty good indication of what was required of teachers to meet the needs of the new situation and justify the higher level of pay that was being given, seemed to get lost. It got lost very quickly. It must have been because the employers felt that the amount of public expenditure had risen so much that they did not want to do any more than they need in the next few years.
I was accused by Sir Douglas Wass, who was the Permanent Secretary to the Treasury, of wrecking the Labour Government's economic policy with the report which I brought out 13 years ago. The action was amply justified at the time. The catching up process is a cruel thing to have to try to achieve, from everybody's point of view. It costs too much; there is too much leeway to make up. However, we made up that leeway and we put teachers on a level from which they could go forward. But they slipped back and we then had all the same troubles of falling behind. It was not possible for the Government to meet the bill for catching up at that time.
I have said enough. I wish that I had had an opportunity to do more for the teachers rather than having to do the rush salvage job that we did 13 years ago. It might have made a great difference. However, one does not always have the opportunities that one seeks. After 30 years in the Civil Service I thought that I knew what to do about teachers' pay, their position and conditions of service.
7.45 p.m.
Viscount Davidson: My Lords, I am grateful to the noble Baroness, Lady Blackstone, and the noble Lords, Lord Dormand of Easington, Lord Ritchie of Dundee and Lord Houghton of Sowerby, for their contributions to this debate. The debate has ranged far more widely than the subject of the order and I do not intend to stray from the order in my brief reply. As I said in my opening remarks, my right honourable friend is considering all the views that have been put forward and will no doubt include in his consideration the views that have been put forward tonight.
Perhaps I may first remind the House that the order we are considering this evening is needed if teachers are to receive in their pay packets next year

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whatever increases flow from the recommendations of the Interim Advisory Committee. If the order is not approved the Secretary of State will not be able to make the necessary provision to achieve that. For that reason alone I am sure that your Lordships will wish to agree the order.
We have heard much about the remit given to the Interim Advisory Committee this year. Perhaps I may remind noble Lords opposite of a few facts. Teachers' pay has gone up by 40 per cent. in cash terms since March 1987. It has risen by 30 per cent. in real terms since 1979. The Government have increased the number of incentive allowances from 100,000 to over 170,000 since 1987. My right honourable friend the Secretary of State has provided for the teachers' pay bill for 1990–91 to increase by the fair and substantial sum of £600 million—55 per cent. more than this year's remit and twice last year's. The committee has been asked to report by the end of January and I am sure that its report will be of the same high standard as its two previous reports.
My right honourable friend the Secretary of State is aware of concern about teachers' morale. That point was raised by the noble Baroness, Lady Blackstone. He is keen to do all that he can to assist. He has made it clear on many occasions, most recently in a letter to all head teachers, that he believes that teachers deserve gratitude, recognition and respect for their professionalism and the commitment that they show their pupils.
The vast majority of teachers support the aims of the national curriculum, which is founded on current best practice. I acknowledge that its introduction, together with other education reforms, places extra demands on teachers. My right honourable friend has responded to pleas that further reforms might overstrain teachers' goodwill and commitment. We intend to ensure that we implement the reforms at a reasonable pace while retaining the momentum already gained. The evidence shows that teaching is a very attractive career for many people. About 25,000 people enter or re-enter the profession every year. Applications this year for entry to primary initial teacher training are up by 15 per cent. The population leaving teaching for other paid employment is less than I per cent. a year.
The noble Baroness, Lady Blackstone, and the noble Lord, Lord Dormand of Easington, asked me about the situation vis á vis the ILO. We are well aware of what the ILO has said. The ILO in turn is well aware that our aim is to re-establish permanent pay machinery. That is what we are working hard to achieve. The three new options tabled this summer and the Secretary of State's recent constructive meetings with unions and employers bear witness to that. The new arrangements must operate effectively to stand the test of time. That is unlikely to be achieved unless there is sufficient consensus about what the arrangements should be. The Secretary of State is therefore considering very carefully all the points that have been put to him in his recent discussions and will reflect on what has been said this evening. As he made clear, no decision has yet been taken on the best course to pursue.
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The noble Baroness. Lady Blackstone, and the noble Lord, Lord Ritchie of Dundee, asked for an assurance that new permanent machinery will be put in place for the 1990–91 settlement. As I said earlier, that is our clear aim. However, I do not underestimate the difficulties of achieving it given the wide difference of view among the six competing teaching unions. The task now is to find a way ahead that commands the widest possible acceptance, and we are indeed aiming for legislation. What matters—I think the noble Lord, Lord Houghton of Sowerby, would agree—is getting the new arrangements right.
The Government are anxious to find workable and lasting new permanent arrangements for determining teachers' pay. They will be pursuing that vigorously with the interested parties over the next few months. In the meantime this order is needed to ensure that teachers can receive next year's pay rise. I commend it to your Lordships.
Lord Dormand of Easington: My Lords, before the noble Viscount sits down, will he be so kind as to say a little more about the points that some of us made concerning the ILO? He has just said that the ILO is aware of what the Government are doing to achieve the ultimate objective of free negotiations. The ILO has said that the interim action—the body which has been established—is in contravention of the ILO convention. That is the point. Will the Minister say something about that matter, because he is missing the point?
Viscount Davidson: My Lords, no. I have already moved the order. I shall write to the noble Lord.
On Question, Motion agreed to.

Medicines (Intermediate Medicated Feeding Stuffs) Order 1989
7.50 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington) rose to move, That the draft order laid before the House on 30th November be approved [2nd Report from the Joint Committee].
The noble Baroness said: My Lords, this order is part of a package of controls on medicated feeding stuffs. The package has been developed and implemented in stages since the early 1980s, when it became evident that the legislation that then existed was open to abuse and did not adequately implement existing or proposed EC controls. This order is the only one subject to affirmative resolution, which is why it is before the House today. A further seven statutory instruments which are to be adopted by negative resolution will also come into force on 1st January 1990.
The House will recognise that the responsible use of medicated feedings stuffs is an important feature of modern livestock husbandry. It can bring significant benefits in terms of animal welfare and of safety and quality for consumers of animal produce. The need, however, is to ensure

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responsibility by all concerned in the manufacturing, distribution, incorporation and use of those products.
Since 1985 we have progressively introduced tighter controls on what medicines can be incorporated into feed and a registration system for manufacturers of medicated feeding stuffs. Our purpose in the present package is to build on those earlier measures by ensuring that medicinal additives and intermediate medicated feeding stuffs are available only to registered manufacturers and by requiring merchants dealing in intermediate medicated feeds to be registered and to observe certain conditions. In addition we shall limit incorporation to medicinal products which have been licensed as feed additives and make a number of more minor improvements to the controls.
The order, which is made under Section 130(3A) of the Medicines Act 1968, will enable us to achieve the same level of control on the distribution of intermediate medicated feeding stuffs as for medicinal feed additives.
Why should we do that? The basis of control of medicines in the United Kingdom is the licensing system under the Medicines Act 1968. This ensures that products are not put on the market until we are satisfied that they are efficacious—in other words, that they work—that they are of appropriate quality—in other words, no undesirable contaminants—and above all that they are safe. "Safe" in the context of veterinary medicines includes safe for the animal; safe for anyone who may come into contact with the product and for the environment; and safe for the consumer of animal produce.
Incorporation of medicines into feed can sometimes be a difficult business. Because of that it is common practice for a specialist manufacturer to prepare intermediate medicated feeding stuffs; that is, mixtures of medicinal feed additives with a feed base. These can be more easily and safely mixed with the main ingredients to form the final feeding stuff. Such intermediates can be more safely handled by the general run of manufacturers. That practice is therefore eminently sensible. We have no wish to stop it. However, we wish to ensure that it leaves no loopholes for avoiding Medicines Act controls.
That is the reason we propose to make the order. It provides that intermediate medicated feeding stuffs should be treated as medicinal products for the purposes of the Act. Taken together with the other elements of the legislative package, it will ensure that licensing requirements for those products and statutory controls on their sale and supply can be implemented at all stages. It is therefore a further step towards the goal of safety throughout the food
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chain—a goal which the Government are also pursuing through their Food Safety Bill. That Bill includes complementary provisions to allow tighter control on the use on farm of medicated feeding stuffs in order to ensure that residue levels are consistently within safe limits.
I spoke earlier of responsibility. Before I finish I should like to acknowledge that our efforts to develop and apply sound rules have depended heavily on the co-operation of organisations representing compounders, merchants, farmers, veterinarians and enforcement authorities. Although they cover a wide range of different interests, they have recognised a common responsibility and have worked together with government to agree on fair and efficient controls. I beg to move.
Moved, That the draft order laid before the House on 30th November be approved [2nd Report of the Joint Committee.]—(Baroness Trumpington.)
7.55 p.m.
Lord Gallacher: My Lords, perhaps I may first thank the noble Baroness for explaining so clearly, as always, the purpose of the order and the underlying thinking behind it as well as the fact that there are seven complementary orders, if I may so describe them, which are subject to the negative procedure and which are also due to be updated from 1st January 1990. We support the order and the other orders to which she referred and it follows that we support the intention behind the order.
My only query is a straightforward one concerning the publicity for the new position which will apply after 1st January 1990. The noble Baroness has already paid tribute to those involved in the industry. May we rest assured that farmers, large and small, will be made fully aware of the changed position which is to apply under this and the other orders to which she referred?
Baroness Trumpington: My Lords, as usual, I am most indebted to the courtesy of the noble Lord, Lord Gallacher, for his welcome and kind words in respect of this and the other orders. I can assure him that we shall take all possible steps to make the new regulations known to farmers. It is in their own interests to follow them.
On Question, Motion agreed to.

Scottish Episcopal Clergy Widows' and Orphans' Fund Order Confirmation Bill
Considered on Report.
House adjourned at three minutes before eight o'clock.