Lords Sitting of 23 January 1989

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

Homelessness
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What further measures they are contemplating to deal with the deteriorating situation regarding homelessness highlighted in the recent report of the Institute of Housing.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, the Institute of Housing's report on homelessness is one of a number that have recently been or are about to be published. We wish to assess the findings of all these studies before finalising our review of the homelessness legislation.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that reply. Is he aware that since this report there has also been a report issued by the organisation Shelter which shows a similar trend? Is the Minister aware that it is calculated that there are now over 120,000 households homeless? In terms of numbers of people this is over 200,000. It should be borne in mind that the legislation came into force only recently, since when a representative of small landlords has said that they expect rents to double in the near future. That means that wherever they have the opportunity they will double rents. How does the Minister expect the homeless to be able to obtain rented property in order to leave the homeless queue?
The Earl of Caithness: My Lords, the noble Lord, Lord Dean, is right to say that there are about 120,000 households which have been classified as homeless and which have been found accommodation by the local authorities. As the noble Lord will know, there is a substantial programme of money devoted to the housing associations. They have had an increase of 80 per cent. over the next three years in the moneys that they are to receive from the taxpayer. That, combined with the continued resources to local authorities and the improvement in local authority efficiency and the private sector, should make a great dent in the homelessness figure.
Lord Moyne: My Lords, does my noble friend not agree that the problem of homelessness would be reduced if councils were allowed to retain for new building more than 20 per cent. of the receipts from the right to buy?
The Earl of Caithness: My Lords, I do not think I agree with my noble friend. It is important that this matter is the responsibility of the local authorities and, if they brought back into use a proportion of the
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100,000 empty properties that they possess, it would make a great difference.
Lord Mellish: My Lords, is the Minister aware that this is primarily a London problem?
Noble Lords: No!
Lord Mellish: My Lords, I repeat, it is primarily a London problem. It is like talking to yourself, with some of these people. It is primarily a London problem and relates to only about four London boroughs. May I appeal to the Minister to consider this as a matter of national urgency, to set up a statutory authority whose problem it will be to deal with homelessness and to give it the money and power to solve the problem? It should have the power, for example, to take away from some of the local authorities the empty properties that they possess.
The Earl of Caithness: My Lords, the noble Lord has come up with an interesting idea which I should like to study with care. However, before one takes powers away from local authorities, one should give them one more chance to put their own house in order.
Baroness Seear: My Lords, will the noble Earl explain a little further his answer to his noble friend? The noble Lord asked about the use of moneys from selling council houses. It is not at all clear to me why the noble Earl thinks that placing more money at the disposal of local authorities for them to spend would not be a means of increasing the stock of housing. On the face of it, that seems self-evident.
The Earl of Caithness: My Lords, if the money were used precisely for the homeless and targeted in that way, it might help. However, as the noble Baroness knows, it is up to local authorities how they spend their money. I can tell her that from December 1987 until just recently we had given the local authorities a further £74 million specifically targeted towards helping the homeless.
Lord Graham of Edmonton: My Lords, the Minister has said that the cost of housing homeless people in bed and breakfast accommodation is far greater than the cost to a council of housing them in normal housing. What is the Minister doing to reduce the use of bed and breakfast accommodation and to encourage an extension of council house occupation? The Minister has referred to the percentage of housing owned by councils which is unoccupied. Will he confirm that the amount of housing in the ownership and gift of the Government is far greater than the unoccupied housing belonging, to councils?
The Earl of Caithness: My Lords, the noble Lord, Lord Graham of Edmonton, asks what the Minister is doing. The question is what are the local authorities doing about empty housing? One sees vast differences between certain London local authorities which use a lot of bed and breakfast accommodation and others with virtually identical problems but which use no bed and breakfast accommodation.

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As for the difference between the empty local authority housing and the empty government properties, the local authorities have something over 100,000 empty properties and central government have about 16,000.
Lord Murray of Epping Forest: My Lords, does the Minister accept that the figure of 120,000 to which both my noble friend and others have referred relates to families which are in principle eligible for support by the local authorities? Does he further accept that beyond that, there are scores of thousands of single homeless people, many of them in great need, who are not covered by this Act? Will the Minister take into account in his further deliberations upon how to tackle this national problem the needs of single homeless, both in London and elsewhere?
The Earl of Caithness: My Lords, the noble Lord raises a very important point about the definition of homelessness. Of course the single parent or single person, particularly the young single person, does not tend to qualify under the definition in the 1985 Act. That is the responsibility of my right honourable friend the Secretary of State for Social Security. I know that there are special hostels, and he is looking at the matter.
Lord Dean of Beswick: My Lords, is the Minister aware that, during the passage of the Bill, when the Minister was questioned he placed great emphasis on the fact that when the Bill became an Act it would help with the rehousing of homeless people? If rents double as the representatives of the landlords predict, will the Minister give an undertaking that if people who are registered as homeless are able to negotiate a tenancy with one of these private landlords, irrespective of the doubling of the rent, the prospective tenant will be funded by housing benefit? Or is the whole thing "kidology" and a hoax? If so it is most unfair on the people concerned.
The Earl of Caithness: My Lords, as the noble Lord is fully aware, Part I of the Act relating to assured tenancies only came into effect on 15th January, a week ago yesterday. There is a lot of interest in the ability of the private sector to provide an increasing part of the market which it has been forced out of since the introduction of the Rent Acts. I confirm that housing benefit is available.
Viscount Hanworth: My Lords, does the Minister agree that part of the reason bed and breakfast is used extensively by some local authorities and also the reason there are unused properties is the problem of finding capital, as opposed to the day-to-day expenditure, to produce the new buildings that are required?
The Earl of Caithness: My Lords, that is indeed one of the problems. The other is the need for more efficient management of those properties and a proper housing policy. I am sure the noble Viscount would wish to support that. He will be aware that there has been no restriction on the use of accumulated receipts for capital repairs. If some local
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authorities had used that route, we might have got a lot further.
Lord Donaldson of Kingsbridge: My Lords, will the Minister give us some idea at what speed the Government are reducing their admitted figure of 16,000 empty houses? The Minister mentioned that figure earlier.
The Earl of Caithness: My Lords, I cannot give the noble Lord a detailed answer. All I know is that there is a big drive within central government to ensure that when properties become available they are disposed of.
Baroness Fisher of Rednal: My Lords, according to the latest figures from the DoE, since this Government took control the number of homeless people has doubled. Does the Minister agree that one cannot put all the blame on the shoulders of local authorities? If one looks at the statistics of local authority spending on housing, one sees that every year the figures have gone down and down because of the lack of government subsidies on new build.
The Earl of Caithness: My Lords, the noble Baroness will be aware that the HIP allocation for next year is up 12 per cent. It is not just local authorities that provide housing. The private sector and the housing associations also provide housing, and they are being heavily funded.

London Transport: Studies
2.45 p.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
Whether it is their intention to carry out an urgent review of the problems of London's transport as a whole.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, we do not believe such a general review is required. However, a number of specific studies are under way or on the point of publication. Meanwhile, significant extra capacity is being provided, mainly by the public sector but with important contributions from the private sector.
Lord Ezra: My Lords, does the Minister agree that London's traffic is becoming increasingly congested and that public transport facilities in particular are proving unequal to the increased demands being put on them? Bearing in mind that all forms of urban transport are interdependent, are the Government right in pursuing this policy of reacting to particular situations as they arise? Has not the time come to look at London's transport as a whole?
Lord Brabazon of Tara: My Lords, I agree that traffic in London is becoming congested. That is why we are looking at a number of ways of tackling the problem. However, we do not believe that a strategic body needs to be set up. We want action, not bureaucracy. Past attempts at master plans have failed. They have taken too long to prepare and they have been too inflexible.
Lord Strabolgi: My Lords, will the studies that the department is undertaking include one about the long-distance coaches in London which at the moment have to be served by one coach station in Victoria? The number of coaches passing through the residential parts of that neighbourhood is becoming increasingly intolerable.
Lord Brabazon of Tara: My Lords, London Regional Transport has been asked by the Government to examine the current and future terminal requirements for express coach services in London. It is considering alternative options to Paddington and possible short-term improvements to Victoria coach station. It is also talking about alternative arrangements to the Battersea wharf site.
Lord Orr-Ewing: My Lords, will my noble friend consider whether it is not also a question of doing what so many other nations with similar problems have done; namely, setting up a special traffic side to our police force which is solely concerned with the flow of traffic and the discouragement of transgressors who wilfully block traffic for their own convenience, to the great inconvenience of masses of users in London? Should not this matter be now reconsidered in the light of what every other nation has discovered on this issue?
Lord Brabazon of Tara: My Lords, I shall certainly take away my noble friend's suggestion on a specialist traffic police force. Illegal parking is one of the main problems in central London. We have made significant progress on that problem with the introduction of clamps, but it is a fact that illegally parked vehicles cause a disproportionate amount of delay.
Lord Molloy: My Lords, in addition to the proposals suggested by the noble Lord, Lord Orr-Ewing, is it not possible to have more special lanes for London's buses? Is is not also possible to put on more Underground trains at the rush hours? That is the main problem that people appear to face. I believe many more Underground trains should be running during the rush hours and that there should be full enforcement of the bus lanes as well as additional bus lanes. All those things, together with special assistance from the police, might ease the problem.
Lord Brabazon of Tara: My Lords, bus lanes are kept under review. They are brought in when they can be justified. As regards investment on the Underground, I believe the largest ever programme of investment will take place over the next few years. That should bring relief for some of the congestion on that system.
Lord Underhill: My Lords, does the Minister appreciate that his original reply to the noble Lord, Lord Ezra, was extremely disappointing? Is he not aware that to carry out separate London rail and road assessment studies without any correlation is sheer nonsense? Does he agree that there must be an all-inclusive discussion of London's traffic problems rather than such piecemeal inquiries? The Minister
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referred to bureaucracy. On 16th January his ministerial colleague referred to an invitation to London boroughs to send an elected member and an official to an annual advisory consultative meeting on London's traffic. Does the noble Lord realise that that is not the way to achieve an all-embracing discussion of the problems of London's traffic?
Lord Brabazon of Tara: My Lords, I should have hoped that that would be a helpful suggestion on the part of my noble friend. I said that we did not want too much bureaucracy and that we wanted action. I remind your Lordships that had the GLC—which has been gone for only three years—been able to solve the problems of London's traffic we should no doubt be enjoying the results now, and we are not.
Lord Bottomley: My Lords, can the Minister say whether the heads of London's transport have ever got together to discuss the problem and to consider whether collective action can overcome it? If they have not, will the Minister consider calling them together for that purpose?
Lord Brabazon of Tara: My Lords, a central London rail study is currently being undertaken and the results will be reported shortly. The study group consists of representatives from London Regional Transport and the British Rail network, so that there is a body such as the noble Lord described.
Lord Cledwyn of Penrhos: My Lords, the noble Lord said that congestion in London was getting worse. Is he aware that it is now appalling and will shortly be chaotic? Is he aware that there exists a major problem which he does not appear to be taking seriously? Will he say when a government statement will be made about steps to be taken to ameliorate the position in the interests of the metropolis and of the country generally?
Lord Brabazon of Tara: Shortly, my Lords.
Lord Wallace of Coslany: My Lords, is the Minister aware that I raised the question of travel problems, particularly on British Rail, in 1946 in another place? At that time people travelled not so much by car but by train; today more people travel by road and more people travel by train. Does the Minister agree that something has to be done about a chaotic situation which, for many of us who do not use road transport, is becoming unbearable?
Lord Brabazon of Tara: My Lords, so far as concerns the rail system, both the Underground, about which I have already spoken, and British Rail Network SouthEast, there are plans to invest £1 billion over the next five years to improve the situation in the area.
Lord Blyth: My Lords, does the Minister have any plans to protect Battersea Bridge from attacks by water?
Lord Brabazon of Tara: My Lords, I recognise that the noble Lord asked me a question on that subject a short while ago when the bridge was closed as a

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result of being hit by a barge. I am deeply disappointed that that has happened again and that further repairs will be necessary.
Lord Donaldson of Kingsbridge: My Lords, is it true that it was the same company which owned the first barge that attacked the bridge a second time?
Lord Brabazon of Tara: My Lords, I cannot give the answer to that question. I shall look into the matter.
Eggs: Price Increases
2.54 p.m.
Lord Bethell Lord Bethell asked Her Majesty's Government:
By how much the retail price in supermarkets of eggs has risen in the past compared with rises in the retail prices in supermarkets of sugar, butter, potatoes and olive oil, and whether they consider this increase to be justified in terms of fairness to the consumer.
The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, information from the retail prices index, in which supermarket sales are not separately identified, shows that the price of eggs has risen by 6·9 per cent. between December 1986 and December 1988. Over the same period sugar prices have increased by 13 per cent., butter prices by 10·4 per cent. and vegetable oil prices (olive oil prices are not separately monitored) by 0·9 per cent. Potato prices have fallen by 1·5 per cent. The price of food in the United Kingdom has risen by less than the rate of inflation for each of the last four years, to the considerable benefit of British consumers.
Lord Bethell: My Lords, I am grateful to my noble friend for that Answer, but is she aware that in my local supermarket a dozen eggs which cost about £1 a year ago now cost between £1·30 and £1·35, representing an increase of about one-third? Is she further aware that that compares with an increase in the price of butter of only one penny from 52 pence to 53 pence for 250 grammes? Does she not feel that egg producers should try not to increase the price of their product by so much in one calendar year, and that it would help to solve the economic problems which they have faced in recent weeks if they were to keep their prices down?
Baroness Trumpington: My Lords, care has to be taken in making comparisons regarding retail egg prices. Prices differ according to the grade of the egg. For example, size 4 eggs are currently between 10 pence and 15 pence a dozen cheaper than size 2 eggs. Prices also differ between outlets reflecting the type of eggs sold and the services offered—for example, by local corner shops. As with many foods, prices will reflect any promotional offers, which can result in enormous variations in shop prices at any point in time.
Lord Hooson: My Lords, is there not a free market in eggs and do the Government not believe that that is the way to achieve fairness to customers?
Baroness Trumpington: My Lords, support arrangements, trade barriers and many other factors influence food prices. The Government believe that the determination of prices by market forces results in the most efficient allocation of resources and brings the best deal for the consumer. In recent years significant progress has been made in that direction.
Lord Morris: My Lords, I share my noble friend's concern or indeed apparent affection for a good potato salad, but does the question compare like with like?
Baroness Trumpington: No, my Lords.
Lord Bethell: My Lords, surely my noble friend would agree that an egg is an egg and that an increase of one-third in the price over one year is quite extraordinary, bearing in mind the general level of inflation?
Baroness Trumpington: My Lords, I presume that the noble Lord who spoke previously assumed that a potato was like an egg since potatoes were included on my noble friend's shopping list. This Government's policy of fostering free and fair competition in the High Street, and our policies in relation to the common agricultural policy, have made a significant contribution towards containing food price increases, bringing considerable benefits to the consumer who has a wider variety of food available than ever before.
Baroness Seear: My Lords, in view of recent events is the Minister not somewhat relieved and perhaps surprised that the price of eggs has gone up?
Baroness Trumpington: My Lords, I am delighted to say that sales of eggs are rapidly returning to normal, thanks to the measures taken by my ministry.
Lord Gallacher: My Lords, will the noble Baroness agree that three of the four commodities with which comparison is invited by the noble Lord are subject to commodity regimes under the European common agricultural policy? Will she further agree that the effect of that policy is to turn the laws of supply and demand on their heads? Does she agree that an enlightened revision of the common agricultural policy would be to the advantage of consumers and taxpayers alike, and that that ought to be the object of government policy at the present time?
Baroness Trumpington: My Lords, the prices of many foods are very little higher than a year ago and some foods are cheaper. Prices of lamb are 2 per cent. lower than a year ago, processed fruit is cheaper and fresh vegetables are an average of 3·4 per cent. lower in price than a year ago. The list is long but on average food prices are over 15 per cent. lower in real terms than they were 10 years ago.
Viscount St. Davids: My Lords, would the noble Baroness not agree that the happiest state in relation to the price of eggs is when, as is now occurring where I live, two large supermarkets fight each other over prices?
Baroness Trumpington: My Lords, that is a matter for them.
Baroness Fisher of Rednal: My Lords, does the noble Baroness agree that the market is subject to supply and demand? Because the demand for eggs has fallen as a result of the recent scare would it not be better for egg producers to reduce the price in line with the suggestion of the noble Lord who put down the Question?
Baroness Trumpington: My Lords, in point of fact egg prices are now lower than they were before Christmas and, as we have just heard from the noble Lord, many retailers are actively promoting the sale of eggs. Retail egg prices did not fall immediately following the salmonella scare because retailers have to take account of lower turnover and the need to reduce the levels of stocks held. During this period it was not price that was restricting the sales of eggs but rather confusion in the public's mind owing to media reporting.
Building Societies: Investor Protection Limit
3 p.m.
Lord Constantine of Stanmore Lord Constantine of Stanmore asked Her Majesty's Government:
Whether they will consider raising the ceiling on guaranteed refunds on money deposited with approved building societies from £20,000 to a level nearer to the accumulated sums on deposit.
Lord Brabazon of Tara: My Lords, the latest available figures show that over 93 per cent. of all share and deposit account balances held by individuals in building societies stand at £10,000 or less. The existing statutory limit of £20,000 therefore already provides generous protection for the vast majority of investors.
Lord Constantine of Stanmore: My Lords, I thank the Minister for that reply, but can he give some assurance to the many elderly people who have more than the amount that he has named in a building society and who are covered only by a ceiling of 90 per cent. of £20,000? Will they be more generously treated in view of the rise in inflation which is now foreseeable?
Lord Brabazon of Tara: My Lords, the figure of £20,000 can be reviewed from time to time to take account of inflation. I do not know whether there are any plans at present to undertake such a review as that figure was, I think, only set when the Act was passed in 1986. However, as I said in my original Answer, the vast majority of people have less than £20,000 on deposit with a building society. If people have more they are able to spread their deposits around more than one building society.
Lord Williams of Elvel: My Lords, would the noble Lord indicate what arrangements would be made if building societies convert themselves into banks, and also say whether these are better or worse than those at the moment pertaining under the Building Societies Act? In order to obtain conversion, would the Government agree that the present arrangement proposed by the Abbey National, namely, to dish out fairly free shares to their depositors, is an arrangement of which the Government approve wholeheartedly?
Lord Brabazon of Tara: My Lords, if a building society converts to a bank it comes under the banking level of protection for depositors, which is 75 per cent. of up to £20,000. I emphasise that when putting the idea of conversion to its members, a building society would have to point out that fact. As far as Abbey National's conversion is concerned, that is a matter between the building society and its members. The Government remain neutral as to whether building societies should or should not convert.
Lord Constantine of Stanmore: My Lords, is the Minister aware that any sum exceeding £20,000 is not guaranteed but is dependent upon the sums of residual money in the building society, the society's legal obligations and its present policy in the event of such loss exceeding £20,000?
Lord Brabazon of Tara: That is right, my Lords. The statutory deposit scheme is applicable only to sums of £20,000 and under.
Lord Taylor of Blackburn: My Lords, will the Minister say whether there have been any consultations between the Government and the Building Societies Association as to whether or not the Building Societies Association wishes to change that arrangement?
Lord Brabazon of Tara: My Lords, I am not aware of any consultations that have taken place with the Building Societies Association. Obviously, if the Building Societies Association wishes to approach the Government with a view to changing that situation, we should be happy to hear from it.

London Regional Transport Bill
3.4 p.m.
Read a third time, and passed, and returned to the Commons with amendments.

London Regional Transport Bill

  European Financial Area: ECC Report
  3.5 p.m.
  Lord Kearton Lord Kearton rose to move, That this House takes note of the report of the European Communities Committee on a European financial area [21st Report, 1987-88, HL Paper 109].
  The noble Lord said: My Lords, I beg leave to introduce this debate on the report of the Select Committee on the European Communities, the

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  subject of which is the European financial area. The investigation was carried out by Sub-Committee A of the Select Committee. I should like to express my thanks to the hardworking members of the Select Committee, to its specialist adviser, Professor Begg of Birkbeck College, and to the sub-committee's indefatigable clerk, Mr. William Sleath. I should particularly like to thank also the eminent witnesses who were uniformly helpful.
  It is an unusual but most welcome development that one of our witnesses, the noble Lord, Lord Cockfield, will be taking part in today's debate. The noble Lord has just concluded a distinguished and most successful term as a commissioner and vice-president of the European Commission. His energy, extraordinary abilities and advocacy as well as the reports that he has sponsored have been decisive in the second half of this decade in getting Europe moving briskly forward—movement after a long period of comparative stagnation.
  The Single European Act was the political decision which ended that stagnation and set the stage. The follow-up was the remarkable Brussels White Paper of three-and-a-half years ago which listed some 300 specific proposals for action and set up a timetable in which those actions should be achieved. It was a timetable with completion set for the end of 1992, a date which now dominates Europe. The White Paper, the wide range of specific proposals, the timetable and the very considerable progress to date all result from the commissionership of the noble Lord, Lord Cockfield. His manifold services to this country in the Civil Service, industry and commerce, the chairing of commissions and finally in government had already established him as a great Englishman. His four years in Europe have established him as a great European too and a key figure in building up a Europe in which he sees Britain as a pillar of strength in every sense with the opportunity to play a major part in Europe's development and destiny.
  The basis of the committee's inquiry was the Commission's proposed directive and regulation of November 1987 in line with the White Paper to complete the liberalisation of capital movements within the Community and to move towards the liberalisation of capital transactions between the Community and third countries. After consultation with the European Parliament the Council adopted the proposals in June 1988. Most member states are to implement the directive by 30th June 1990. The exceptions are Spain, Greece, Ireland and Portugal, where compliance may be delayed until 1992.
  The directive is not absolute. It provides for exceptional circumstances. With the authorisation of the Commission, reimposition of capital controls (under certain conditions) is allowed for a period of no longer than six months. The regulation accompanying the directive consolidates existing Community instruments for medium-term balance of payments support and sets up a permanent facility with considerably increased resources.
  The European financial area which is in the making requires a free internal market in financial services. That is an objective which goes back to the Treaty of Rome itself. Following the White Paper of
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  the noble Lord, Lord Cockfield, that freedom is now being established by a series of proposals and directives. For instance, the "own funds" directive harmonises the definition of bank capital to be used in banking supervision; the solvency ratios directive sets out the formula to determine capital adequacy for credit institutions; and the second banking co-ordination directive establishes the principle of a single banking licence, which would allow firms to create a Europe-wide banking system with consequent Europe-wide competition. There has been the adoption of the 1987 directive on mutual recognition of prospectuses. After many years of deadlock, there is movement in the insurance market; large risk services to major corporations are now expected to be fully integrated in an open market by next year. There are also the recent proposals on the control of mergers, and so on. The impetus to a free internal market in financial services is now unstoppable.
  In all this activity the freedom from capital controls is a more fundamental step than the others. It raises important questions to which at this time no certain answers can be given. It was to air these questions that the committee carried out the inquiry.
  In the introduction to the committee's report the post-1945 developments in the international monetary system are set out, the keystone being the Bretton Woods Conference of 1944, which initiated the various post-war international financial institutions. There were four key objectives at Bretton Woods: free trade in goods and services; free international capital movements; exchange rate stability; and national automony over domestic economic policy. However, it was recognised that those four goals could not all be reconciled. Fixed exchange rates was the chosen option with free trade in goods and services the target, with retention of national autonomy in ecomic policy. Free movement of capital was the goal which was sacrificed.
  The Bretton Woods systems provided a framework for the worldwide dramatic post-war increase in production and trade. The fixed exchange rate regime lasted until the 1970s. Events since then are another story. But one might remark in passing that today's G7 meetings are in the spirit of Bretton Woods. The architects of the Treaty of Rome in 1957 had the same dilemma as was evident at Bretton Woods and there was no immediate liberalisation of capital movements within the Community of Six, although it was an objective. Some modest but abortive attempts at liberalisation in the 1960s were removed in the 1970s after the oil price shock and exchange rates between member states were themselves highly volatile. Such volatility was a hindrance to the development of the Common Market, fast though its economic growth proved. Various attempts were made to reduce the volatility, including the short-lived so-called "snake" of currency parities which followed the accession of the United Kingdom to the Common Market in 1973.
  The successful attempt to stabilise exchange rates within the Community was launched in 1979 with the founding of the European monetary system. The European monetary system depended on the twin pillars of a European currency unit, the ecu, and an

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  exchange rate mechanism. The ecu was to be used as a unit of account in settling transactions between European governments and between their central banks, but with the hope that in parallel a private ecu market would develop. The value of the ecu has derived from the weighted average of the value of the individual countries of the Common Market, including the pound sterling. The exchange rate mechanism sets a central value for a country's currency against the ecu with fluctuations allowed within a narrow and defined band for each currency. A European monetary co-operation fund provides credit facilities between member governments. Changes in a country's exchange rate outside the band can be made but only with the consent of all the members.
  The United Kingdom is a member of the European monetary system but not of the exchange rate mechanism. The United Kingdom Government have said at various times that they will join the exchange rate mechanism when the time is right. That pledge was repeated by Mr. Peter Lilley, the Economic Secretary to the Treasury, in his evidence to the committee. It must be stressed that the absence of the UK from the exchange rate mechanism is regretted by other members of the Community.
  The exchange rate mechanism is regarded by those participating as having constituted a major success. Since 1983 exchange rates between the respective currencies have been remarkably stable. Adjustments have indeed been made but they have been small and managed in an orderly fashion. The anchor currency of the system has been the deutschemark and over the years the inflation rates of the participating countries have converged to the very low inflation rate of Germany. That convergence also owes much to the growing co-ordination in the monetary policies of the participating countries.
  For most of the period of the exchange rate mechanism only Germany, with its strong export performance and export surplus, has had freedom from exchange controls. It lifted them in 1981. The Netherlands followed suit in 1986. France recently introduced partial liberalisation and with Italy hopes to accomplish complete liberalisation by 1990. However, meanwhile France is pressing for harmonisation of Community rules to protect savers and depositors and for measures to prevent tax evasion when all controls have been lifted. With Italy, it would like such arrangements to be introduced and in place before 1990. The Commission has considered whether harmonisation of company taxes should also be encouraged.
  The position of Italy is interesting. A considerable budget deficit is at present largely financed by internal savings which currently cannot be deposited outside the country. Freedom of capital movements will almost certainly have to be matched in Italy by considerable fiscal changes.
  Retention of capital controls enabled the weaker countries of the original Community of Six to adjust their policies to preserve exchange equilibrium and to help move towards economic convergence. It is that success which now permits capital liberalisation. For
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  the poorer countries of the enlarged Community, being locked into fixed exchange rates, with no control over capital movements, implies a considerable degree of risk for the development of their economies. That is the reason why such countries have been so insistent on support by way of grants from Brussels to develop their infrastructures especially in transport and provision of energy. Whether the increased flows agreed by the Council last year, and which it is intended will be co-ordinated with increased investment by the European Investment Bank, will be sufficient is a moot point. Certainly future regional aid will have to be more carefully thought through and more closely monitored. In my view these transfers will have to be considerably increased—far beyond anything at present envisaged.
  The United Kingdom has so far stayed outside the exchange rate mechanism. Has that caused any economic harm? Until two years ago I think the answer could be unequivocally "no". The United Kingdom's economic performance since 1979 was initially a sharp recession followed from 1981 by vigorous and sustained growth—faster than in the rest of the Community. Many reasons have been attributed: the benefits of North Sea oil; the reduced power of the unions; the encouragement of an entrepreneurial climate; the removal of many restrictions from business; and the reduction of government activities and government intervention in industrial affairs. It must be remembered that this growth was a catching-up process with the rest of the EC. After the oil price reduction of 1985 our country also had the advantages of a modest exchange rate and low import commodity prices. There were considerable increases in the money supply, plentiful credit, and significant reductions in taxation. Not surprisingly, the UK has had three boom years.
  The UK lifted exchange controls in 1979, when the prospect of large external oil revenues was immediate. The freedom helped the City of London in its role as a world financial centre, and in the 1980s it has permitted a large capital outflow and a major build up of private overseas assets. However, in 1988, again not surprisingly, the boom has meant that the country has experienced a large deficit on the balance of payments. The high interest rates for short-term money have provided the incentive for capital inflows compensating for the trade imbalance. The high interest rates have pushed up the exchange rate of the pound and there has been a sharp rise in inflation in 1988. The United Kingdom now has one of the highest inflation levels in both the Common Market and the OECD countries.
  As I have said, there is no evidence that United Kingdom membership of the exchange rate mechanism of the European monetary system would have improved the UK economy or UK growth prospects, at least until 1985. Whether the disciplines of the exchange rate mechanism would have helped prevent the post-1985 system is a question which may give a guide to the UK's future course of action.
  The evidence that the committee received on the implications of all the recent steps to provide a European financial area and freedom of financial services is summarised in Part 3 of the report. The

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  verbatim accounts of the interviews with witnesses are in the report and make interesting reading, so diverse were the views expressed. At one extreme were those who saw the resultant pressures on the European monetary system being such that the adjustment bands in the exchange rate mechanism would have to be so widened as to lead to a breakdown of the system. The hard won gains of greater financial freedom would be in peril.
  In the centre were those who thought that the pragmatism of the European Community nations and their habit and experience of working ever more closely together in monetary affairs would bring a new equilibrium. A framework would be established, capable of withstanding jolts, tensions and temporary mismatches between economic growth and fiscal management.
  At the other extreme were those who thought that the inevitable and logical conclusion of the present package of liberalising financial measures and the intimate welding together of the economic and financial apparatus of the individual nations must be a common currency, managed by a European central bank. Even on this flank there was no agreement on timetable or on the powers, constitution or independence of such a central bank. But it was maintained with fervour that a common currency, with the common concomitant of a central bank, was necessary to achieve the full economic potential of the European Economic Community, and that the pooling—a favourite word—of national sovereignty in such financial and in due course fiscal matters was a fair price to pay. The prize was worth the price.
  It is highly significant that the Commission, with the agreement of the Council, has set up a special exploratory committee under the presidency of Monsieur Delors to look into the whole situation, with a remit to give a provisional report to the European Finance Ministers by April this year. The views of your Lordships' House as expressed in this debate will be timely.
  The sub-committee, in summarising the evidence, used a series of headings to aid consideration. These headings included, "The benefits of liberalisation"; "The effect on taxation and regulation"; "The ecu and a common European currency"; "A European Central Bank"; and "The drawbacks of monetary union". The contributors to the debate will, I am sure, develop these themes.
  The committee's opinions are given in Part 4 of the report and a summary of conclusions is in Part 5, paragraphs 93 to 105. In brief, the committee welcomed the liberalisation of capital movements and all the steps being taken to create a European financial area. It considered that considerable benefits could accrue—I stress the word "could"—to the United Kingdom, and wanted the United Kingdom to be in a strong position to exercise leadership in the Brussels debates. The committee favoured a pragmatic step-by-step approach to the development of the European monetary system. It felt that the United Kingdom should now take any early opportunity to join the exchange rate mechanism, although recognising that that is not an
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  immediate prospect. It was against any promotion of "fortress Europe" in financial matters.
  The committee considered that it would be some time before the Community and not just Britain was ready either economically and, even more important, politically for full monetary union with a common currency. Nevertheless the committee emphasises that the Community—all the nations of the Community—by ratifying the Single European Act has accepted closer monetary co-operation as an agreed policy and notes that the Act provides that if institutional changes are necessary then treaty amendment can he considered.
  The full implementations of the momentous developments which the Single European Act and the White Paper that the noble Lord, Lord Cockfield, put in train, are worthy of the closest attention from your Lordships' House. I am sure that the present debate will be both informative and constructive. My Lords, I beg to move.
  Moved, That this House takes note of the report of the European Communities Committee on a European financial area [21st Report, 1987–88, HL Paper 109].—[Lord Kearton.]
  3.25 p.m.
  Lord Cockfield: My Lords, the House, the country and indeed the Community as a whole owe a debt of gratitude to your Lordships' Select Committee on the European Communities for the very clear, penetrating and impartial reports which it produces on matters of Community interest and policy. The present report is very much in that honourable tradition. I greatly welcome the report's support for the European financial area. This is an integral part of the White Paper programme for the completion of the internal market by 1992 to which the noble Lord, Lord Kearton, referred.
  It is of immense importance to our country because of the stake that we have in financial services. It is wise to bear in mind also that it is important not just from the point of view of the prosperity of the financial sectors, but also because of its impact upon the prosperity of trade and industry as a whole. This was one of the major areas studied in the Ceccini Report, to which the noble Lord, Lord Kearton, referred, which indicates considerable benefits flowing from completion of the European financial area.
  There has been some criticism of the figures that were given in the Ceccini Report, but it is important to make the point that those figures were, if anything, extremely conservative and the benefits likely to flow will be considerable. I welcome also the support that the report gives to full membership of the United Kingdom in the EMS. I prefer frankly to refer to "full membership" rather than to deal in acronyms like the "ERM" because full membership is what is really involved. The argument for our full membership of the EMS goes much further than simply the industrial and commercial arguments. All experience shows that without an external discipline, sooner or later finance Ministers—I am talking not just in terms of this country but generally—will depart from the path of prudence.

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  This is amply borne out by history. For many years the external discipline was provided by the gold standard. After the end of the last war this was replaced by the Bretton Woods system, which remained in being for some 25 years. Perhaps it is relevant to mention that during that period of 25 years the pound sterling was devalued in terms of the dollar only on two occasions—a feat which has not been matched since, I may say—and indeed it was the breakdown of the Bretton Woods system in the early 1970s which ushered in the great inflation.
  I know that it is customary for people to ascribe the great inflation to the oil price increases. But in fact the oil price increases accounted for but a minor part of the ensuing price increases. The major part was due to the failure of governments to react in a proper and prudent manner to those oil price increases.
  The only effective external discipline which exists at present is the EMS and that is the reason why we should join. I know that at present it is said on behalf of our Government that we need no such external discipline. I entirely accept that statement, but the day may well come when our present Government are replaced by another government. That government may well require external discipline, as past events have proved. The time to introduce that external discipline is when it is not needed.
  There is one point on which I dissent somewhat from what has been stated by the Select Committee. Page 23, paragraph 105, of the Summary of Conclusions reads as follows:
  "The Committee note that the Community, by adopting the Single European Act, has accepted closer monetary cooperation as an agreed policy".
  In fact, the commitment goes very much further than that. The Single European Act states:
  "the Heads of State … approved the objective of the progressive realization of Economic and Monetary Union".
  The same point appears in the conclusions of the meeting of the Heads of Government at Hanover in June of last year. On that occasion they stated:
  "The European Council recalls that, in adopting the Single Act, the Member States confirmed the objective of progressive realization of Economic and Monetary Union".
  I shall deal with the implications of that statement in a moment but I should like to make an immediate point. I make it not with any criticism of the Select Committee but as a general point.
  There is a tendency on the part of government—not just the present Government but all governments—to use emollient language in order to gloss over what they believe may be inconvenient or controversial facts. Unfortunately, this is such an example. The difficulty with such an approach is that while it may avoid immediate trouble and embarrassment it stores up a great deal of trouble for the future. Many of the problems which have arisen in the Community have occurred as a result of a failure to realise the extent of the commitments which have been undertaken. The commitment that has been undertaken in the present case is a commitment to monetary union; not simply a commitment to monetary cooperation. Unfortunately, when the unvarnished truth finally emerges it tends to lead to a considerable reaction. That reaction we have seen on a number of occasions.
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  That brings me to the question of the European currency. I have not the slightest doubt that before the end of this century we shall have a single European currency. The path in that direction is already clearly staked out. There is the EMS; the creation of the single banking market; the declaration by the Heads of Government at Hanover; and the appointment of the committee under President Jacques Delors to study and propose (it is most important that we look at the language used):
  "concrete stages leading towards this Union".
  That is where Europe is going and it is where a great majority of the member states intend going.
  The real point at issue is not whether that will happen but whether our own country will be part of that movement. The problem that we face at present is that, because of a refusal to face the commitments which have already been entered into, the debate is taking place on the wrong issue. In other words, people are discussing whether there will be a single currency; while the real issue is whether this country comes into a system of a single currency or whether it does what it did in the case of the EMS. It was to allow the other member states to go ahead and for us to remain outside. It is crucially important that the issue should be faced because it has great implications for this country, for the City of London and our financial services generally.
  I should like to end with two comments. First, I sincerely thank the noble Lord, Lord Kearton, for the kind remarks that he made about myself. Secondly, I repeat what I said at the beginning: that I regard this as a very helpful, constructive and well-balanced report.
  3.36 p.m.
  Lord Banks: My Lords, the House is once again indebted to the noble Lord, Lord Kearton, and to Sub-Committee A for producing another thorough report on the financial future of the European Community. It has also had the benefit of hearing from the noble Lord, Lord Cockfield, fresh from his four years as a commissioner in Brussels. We are delighted to see him in the House, once again taking part in our debates.
  The report deals with the liberalisation of capital within the Community and the establishment of a European banking system. Both of those are to take place by 1992. It is natural that, in that context, the report should discuss the United Kingdom and the exchange rate mechanism to which the noble Lord, Lord Cockfield, referred.
  I am glad that the committee has decided to stick to its previous policy. In the Summary of Conclusions, paragraph 103 states:
  "The United Kingdom should take an early opportunity to join the ERM, and so he in a stronger position to exercise leadership in debates on monetary policy".
  Paragraph 83 states the committee's belief that the exchange rate mechanism has been successful in reducing exchange rate volatility. The noble Lord, Lord Cockfield, said in evidence to the committee that the European monetary system had been of immense value to the participants.

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  Ben Patterson, a United Kingdom MEP, explained the difficulty which he had in defending to his colleagues from other countries in the European Parliament the current British position on the exchange rate mechanism. I hope that the Government will take the advice of the committee on that important issue.
  The report discusses wider issues. It appears that there are two intertwined themes running through the report from the beginning to the end. The first is the old argument between the visionaries and the pragmatists. The visionaries are there proclaiming the brave new world, perhaps even setting out target dates for the different stages which must be reached if we are to see it established. The pragmatists are also there, singing the words to the hymn, "'I do not ask to see the distant scene; one step is enough for me".
  The second issue, very much intertwined with the first, is whether the establishment of one European currency and the central bank is a relevant issue for contemporary discussion. Some pragmatists believe that weshall eventually come to one currency and a central bank but they believe that it is a long way off and would prefer not to speak about it now. They would rather leave it to come about by stealth. The noble Lord, Lord Roll of Ipsden, whom we are looking forward to hearing later in the debate, put a question to Professor Goodhart, of the London School of Economics. He asked:
  "do we really need to commit ourselves, knowing the resistances, political and otherwise, however unreasonable they may be, to accepting here and now a need for a single currency and Central Bank? Do we really need to go through the agony of using these words and committing ourselves to these now, much as I personally think that these are inevitable end stations?"
  I suppose we might call that the voice of enlightened pragmatism, but the reply of Professor Goodhart was not encouraging. He foresaw speculative flows caused by the liberation of capital which might blow the EMS apart, to use his phrase. He thought that in that situation the Community would either have to proceed to close monetary union or slip back to something of a looser system, perhaps something akin to the crawling peg concept. However, if economic and monetary union is the aim of the Community in such a situation, he did not believe that that could be done by stages. He thought that we should have to take,
  "A fairly major jump literally all the way to a single currency".
  He also thought that to do that would be a major political act, therefore not something that could be done by stealth. I believe that he is probably right in saying that we shall have to take a fairly major jump and I think he is certainly right in saying that it will be a major political act.
  If that choice between monetary union or slipping back were forced upon us, I should hope that the Community would move to monetary union with all its difficulties and implications and with no resort to a two-tier Community. The point I wish to make is that we may face that choice before the end of the century and that is why we should face up to the possibility now and discuss it now; and it seemed to me that that was also the view of the noble Lord, Lord Cockfield. I certainly await with great interest
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  the results of the deliberations of the Delors Committee.
  Liberalisation, though to be desired, clearly brings its problems. We have seen that speculation may be one. Others covered in the report include reciprocity, company taxation, tax evasion and the establishment of safeguards. However, monetary union also brings its problems and in the pages of the report we again meet our old friend convergence. We have discussed that in this House in the past. I believe we agree that there has been some convergence, but running 12 separate economies with 12 currencies means that there are limits on convergence and we may wait for ever until we come to a moment which seems to be particularly propitious to make the move.
  I suggested once before to this House that what the Community does immediately after one currency is established is important. I am sure that that has to be planned most carefully. Therefore, we should need to take Professor Goodhart's fairly major jump and then follow an agreed course. The completion of the internal market and the establishment of monetary union would tend no doubt to increase the existing disparities within the Community and therefore it would be necessary for the Community to be prepared to provide funds in excess even of the present doubling of the structural fund which is to be achieved by 1992.
  I also believe that it would be necessary for our Government to take a more welcoming attitude to the concept of a social Europe than they appear to have done so far. It is obviously desirable to secure the maximum agreement in this country as to our future course but it would be sad indeed if the price to be paid for that were that we should be always lagging back and always deciding to sail on the most sluggish stream. A clear decision is needed on where the Community should aim to reach on monetary union and then some vigorous and positive leadership to ensure that we reach that point.
  3.46 p.m.
  Lord Seebohm: My Lords, first, I should like to express my admiration of the way in which our chairman, the noble Lord, Lord Kearton, conducted our examination and inquiry. He sometimes went at a great speed, which left us somewhat breathless, but I am sure that all members of the committee are most grateful for the way he conducted the meeting and for the report he produced.
  The chairman has already explained that the decision about the single European currency area was taken last June except for the four weaker territories. I was very pleased that the committee decided to examine that agreement, as there would not only be repercussions which had not been fully thought through but it could be a precursor of further moves towards the completion of the internal market.
  The abolition of exchange controls no doubt puts some strains on the EMS although one cannot tell how great they will be. Mr. Lilley, in his evidence, played down the potential strains and pointed out that many capital barriers are already brought down and those nations with free capital flows have not experienced wild exchange rate fluctuations. It was

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  suggested that bands within which exchange rates fluctuate may have to be widened and that the powers now given to the Commission to borrow up to 16 billion ecu from capital markets in order to counteract speculative attacks on a member's currency should be of considerable help.
  I should be utterly dismayed if the EMS were to collapse as I am convinced that it has been genuinely effective in stabilising exchange rates. Also the ecu is now beginning to have an expanding commercial role and, although it will not be a common currency, it brings many of the advantages that monetary union would bring. It is also my view that the UK should join the ERM as soon as practicable as that would strengthen the EMS generally and avoid the danger of the deutschemark taking its place, which is on the cards and which would diminish the standing of London as the centre for world financial markets. It could also bring about a two-tier Europe, which would be a disaster for this country.
  As regards monetary union, that is clearly a long way off but its value for international trade when it comes, will be very great. I remember with considerable nostalgia, at a time when I was in charge of what might be called a Commonwealth bank, what a great advantage it was to operate in the sterling area. keeping the reserves in London and moving them around our colonial territories to meet the large seasonal, fluctuating demands for financing crops and raw materials without needing to have any regard to exchange rates or, for most of the time, to the balance of payments. Of course that ceased with a bang in 1967 when the United Kingdom devalued and floated the pound.
  A recent survey of a thousand leading EC businessmen shows that 80 per cent. want a common currency. There is now a clear conflict between the commercial world and politicians. Politicians do not want to give up what they call sovereignty and would retain it at the expense of some prosperity; the commercial world wants prosperity and would not in the least mind giving up a certain amount of sovereignty.
  The single financial area means that it would no longer be necessary to operate through a mass of local companies. One will be able to return to employing local branches, if that is thought to be more advantageous. As the noble Lord, Lord Cockfield, said in giving evidence, the role of the Commission must be the provision of a framework of minimum standards for financial institutions: it should not legislate on matters which are better done by national legislators, leaving market forces to determine the details.
  If financial barriers are removed, the question of other barriers will clearly have to he given serious consideration. Mrs. Thatcher has said that national frontiers must remain because of the dangers of terrorism and other problems; but we have signed the Single European Act, which clearly lays down the goal of completion of the internal market by 31st December 1992 and that the market is to be an area without internal frontiers in which goods, persons, services and capital moves are free. That is contained in Article 13 of the Treaty.
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  I cannot reconcile the Prime Minister's statements with the signature to the Single European Act. If the fear of terrorism is to make a substantial reduction in the standard of living of the whole Community the terrorists will have obtained a substantial victory. I cannot see that being accepted as a reason for maintaining barriers.
  Much more difficult is the question of indirect taxation. Here it is a question of bargaining and of deciding how much to leave to market forces. The Select Committee has already studied this problem and reported in 1986 (its 11th report of that session). The Select Committee did not underestimate the difficulties and said, in paragraph 114:
  "Despite the manifest advantages for all member states in completing the internal market, despite the commitment of the Commission and the European Parliament to achieve this aim, and despite the declaration of the European Council, the Committee expect the Commission's proposals in the area of indirect taxation to be resisted at every stage by member states concerned for their fiscal sovereignty, their taxation policies, their tax revenue and the undeniable difficulty of finding solutions to the many problems explored by the Report."
  Nevertheless, the committee looked forward to the day when frontier controls are abolished altogether. It also received evidence that the benefit to traders was estimated at anything up to 10 per cent. according to the type of merchandise concerned. Since the report was issued, the Single European Act has been completed and some progress in ironing out differences has already been achieved. I look forward to comments from the Government Benches on this subject.
  Finally, I wish to make some comments on monetary union. It is clearly a long way off but it is firmly on the agenda, whatever the Prime Minister may say. The noble Lord, Lord Cockfield, said in evidence:
  "If you are going to reap the full advantages of European integration, then you have to go through the route of a common currency."
  I fully concur with that.
  UNICE (the Union of Industrial and Employers Federations of Europe) and ICI, in evidence, predict a common currency. Mr. Lilley criticised the "teleological" approach (as he called it) and preferred the practical, piecemeal, step-by-step approach. That, of course, begs the question: approach to what? The point I wish to make is that the subject cannot be left to drift but must be studied and preparations made for implementation.
  We have been told over and over again that the main advantages that America and Japan have over Europe are: first, a common language; secondly, no internal barriers; thirdly, a common currency; fourthly, common fiscal policies. Are the Government going to rule out all those points? If so, the Single European Act makes no sense and the prosperity of Europe will never catch up the high standard of living that those countries enjoy. Let us hope that the single financial area will show the way to further progress towards a meaningful internal market.
  3.55 p.m.
  Lord Reay: My Lords, we are much indebted to the Select Committee on the European Communities and

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  in particular to Sub-Committee A, which is so brilliantly led and the proceedings of which have been so dominated by the noble Lord, Lord Kearton, for this opportunity to debate the report.
  It is also a great pleasure to welcome back my noble friend Lord Cockfield who is returning after what gives all the appearance of being a triumphant success in his turn at the Commission. My noble friend was the commissioner responsible for launching the campaign to complete the internal market in 1985 and it is remarkable the degree of success it has had in galvanising both official and private effort into making this aim a reality. Indeed, the whole world has had to react and if the internal market is achieved it will be a milestone of enormous significance in the Community's development.
  The single market in services, goods and capital will undoubtedly be hindered by the existence of multiple currencies. They add to transaction costs and so inhibit trade within the area. So, of course, do multiple languages; but as regards languages English, not in all respects to our advantage, seems to be becoming the common language—the Latin of our time.
  Is there any sign of a desire for a common currency? It is fair to point out, as the noble Lord, Lord Kearton said, that alignments within the EMS in recent years have occurred less frequently and have been contained within narrower bands than previously. This reflects a degree of convergence in economic policy, particularly in so far as the containment of inflation is concerned, between member states which may be supposed to have had exchange rate stability as one of its aims.
  The call of business for greater exchange rate stability, which is already quite considerable, is likely to intensify after the completion of the internal market as currency instability will then stand out more as a surviving impediment to trade within the Community. I suggest that in the short and medium term all this is, and will remain, far short of the conditions which are necessary for a common currency. A common currency requires a common monetary policy and a co-ordinated fiscal policy. The Community is some distance from having those at the present time. Incidentally, it also requires a substantial and well-developed regional aid policy, which the Community has, and the unrestricted flow of capital, which the Community is about to have. Therefore, while the Community can be said to be moving towards the conditions necessary for monetary union, it is far from being about to arrive there.
  Whatever happens I am sure that the commercial use of the ecu will grow. In some member countries it has made more progress than here. In Italy and France ecu invoicing accounts for 1 per cent. of foreign trade. Ecu invoicing is replacing dollar invoicing in the oil trade to parts of the Community. It is also evolving in the travel trade: IATA is to offer the ecu alongside dollar and sterling as a method of clearing payments between airlines. The use of the ecu will grow as the market educates itself into its possibilities. Her Majesty's Government have given a
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  welcome boost to these developments by the recent issue of ecu denominated Treasury bills.
  However, this increased use of ecus, however far it is developed, will not amount to a common currency. A common currency needs a central bank to issue and manage it. The ecu is merely an alternative denomination for existing currencies against each of which it necessarily fluctuates.
  It follows from what I have been saying that there is no immediate need for a central bank. I am sure that it would be a mistake to create such a bank before it has such a role to play. I go along with my noble friend Lord Cockfield in that we certainly should not refuse to enter into discussions about it. We must be there from the start. We are entitled to enter discussions with a sceptical attitude, but what would be inexcusable would be for us to put in jeopardy London's position as Europe's principal financial centre by absenting ourselves from the first discussions on the grounds that these were premature. We have too often already allowed events in Europe to overtake us. If anyone doubts the importance of this issue let him look at the example of New York whose pre-eminence as a financial centre has quite a lot to do with the fact that it is the Federal Reserve Bank of New York that undertakes all currency intervention in the United States.
  But I strongly doubt if we shall be the only member country wanting to resist the premature establishment of a central bank. When it comes to creating new Community institutions or adding to the powers of existing ones, there are other member states just as jealous of unnecessarily giving away their national sovereignty. I believe that the Community will move inexorably towards a greater degree of economic integration or, as the noble Lord, Lord Cockfield, reminded us, of commitment to economic and monetary union. I hope that the Delors Committee will recommend concrete steps in that direction.
  I suggest that it is a process that will happen in little steps and often invisibly. It is something that must be allowed to develop naturally. I believe that new institutions should be introduced to make existing practices more efficient, not to anticipate the requirements of tomorrow's conditions. I am sure that this country will continue to play a constructive part in this process and that once we have joined the exchange rate mechanism, which I am sure we eventually shall, we will then be able to play a leading part.
  This country has been one of the first to issue ecu-denominated Treasury bills and it is now 10 years since the decision was taken here to abolish exchange controls. Europe needs economic integration if it is to be able to meet the United States and Japan as an equal. It needs economic integration also to underpin political co-operation. Political co-operation needs to be reasserted in the face of the crisis in Eastern Europe. As an excellent article in today's Independent by Patricia Clough sets out, members of the German public are starting to entertain all sorts of romantic and fanciful notions that are uncorrected by their leaders and yet which need contradiction. Events in the East will bring untold trouble to us, as they have

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  done before, unless we hurry on with the construction of the European house.
  4.3 p.m.
  Lord Roll of Ipsden: My Lords, we must be grateful to my noble friend Lord Kearton for the manner in which he has introduced this important debate. Those of us who had the privilege of serving under him on the sub-committee that produced this report have had many occasions upon which to admire the masterly way in which he has steered us through this jungle of highly contentious and very perplexing issues.
  The newspapers have referred to this report as having very balanced conclusions. When one considers the contentious nature of the matters with which it deals and the great differences of opinion not only among economists but among many practical men and women who have responsibility for decisions in government and business, it is indeed a highly balanced document. It is a complement to an earlier report produced by my noble friend Lord O'Brien of Lothbury which dealt more particularly with the European monetary system and with the position of Britain in that system. Noble Lords may recall that it reached a positive conclusion. It also complements the recent report of the Select Committee on the structural funds, which is highly relevant because, in a system of a single market and free exchanges, there will obviously be a greater demand for the support of the structural funds.
  The work of the Community in this whole area I believe can be conveniently divided into two parts. One deals with those aspects which directly and immediately affect the activities of the financial services industry—that is to say, the regulatory provisions for entry into the different markets such as banking, insurance and so forth and the rules concerning conduct within those markets. I shall have a few words to say about that in addition to what is in the report. I must declare an interest because I myself am engaged in certain aspects of the financial services industry. In this area the work of the Community covers a very wide range of matters. It is designed to ensure free competition and financial services side by side with the creation of a single market in goods. On all these matters progress has been made, and my noble friend Lord Kearton has given a number of examples.
  I believe it is important to stress that recent developments in this area as regards the Community show a considerable desire to be guided by the principle of the mutual adoption of standards rather than by the often frustrating search for an immediate adoption of single uniform standards for all member countries. I believe that the work of the Community thus offers considerable promise that sensible solutions will be found for those matters that are still outstanding, such as takeovers. The noble Lord, Lord Alexander of Weedon, has recently published his own views on the matter. He is the chairman of our own Takeover Panel and I believe that his analysis shows that the rules now being drafted in the Community are very similar to, and may be inspired by, the operations of the Takeover Panel, which has been extremely successful in this matter. Further
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  work and consultation lie ahead and there may be difficulties in enabling an efficiently working non-statutory sytem like our own to continue to operate side by side with statutory systems, though those systems themselves are inspired by the same objectives and purposes and work to the same rules.
  Another related problem is the principle of competition and the question of preserving the public interest in that matter as regards mergers and acquisitions. That goes much wider than the financial services industry but it does affect its operations to a considerable extent. The resolution of these matters will no doubt give rise to many problems.
  However, what I believe to be important to recognise is that from the experience so far it would be very wrong to assume, as it is sometimes done in some quarters, that those concerned with these matters in Brussels are motivated by a malign urge to bludgeon the members of the Community into an artificial and premature uniformity. That is certainly not the case. All the experience to date shows exactly the opposite. Any bureaucracy has to be constantly watched for signs of exuberance and excessive growth. But even if such tendencies did exist in the Community, the checks and balances in the system are such that if anything is to be feared it is the lack of progress rather than a headlong rush into artificial and compulsory uniformity.
  The evolution of a single European financial area raises a question that has been pointed to by a number of noble Lords; namely, the future of the financial services industry of this country and the future of London as an important financial centre. There are perhaps dangers in the fact that the rules of business conduct will not be uniform to start with and will probably remain so for quite some time. As regards the fact that this may lead to undesirable practices seeking a haven in whatever environment is the most lax in this respect, that is not a new problem. We have it now and unfortunately there have quite recently been some cases of that kind, quite apart from the development of the single financial area. I suppose that the development of a single European financial area should make for improvement as regards the Community. It is reasonable to expect that the evolution of standards will be to the higher rather than to the lower level.
  The single area for financial services will lead to increased competition. That is what it is designed to do and that is what it will do. This need not affect the position of London, which has been to a much larger extent than Continental centres an open house for foreign enterprises. The City, which contains several hundred foreign banks, has long been used to a high degree of competition from all comers. The open door policy has served London well and the opening of other markets must be beneficial to the position of the City.
  One important point is the attitude of the Community towards non-members. The creation of the single market has already aroused a certain amount of concern in the United States, in Japan, in the developing world and among the European non-member countries. The Commission has so far taken great care to make very reassuring noises in that regard. However, now and again the word

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  "reciprocity" is still mentioned rather prominently, particularly in regard to financial services. While I sympathise, as we all must, with the desire of the Commission to have bargaining counters, I support strongly the conclusion of the Select Committee that insistence on reciprocity can be self-defeating. Liberal policy in these matters, like mercy, is twice blessed—it blesseth him who gives and him who takes.
  The second part of the committee's report deals with monetary unification. This has been a major theme in our debate so far. This is a concomitant of the Community's commitment to a single market by 1992 and the abolition by 1990 of exchange controls with only a few exceptions. The European Council has decided that a committee under M. Delors should study this matter, one on which economists differ greatly and which also arouses considerable concern among politicians.
  The first question to ask is surely this: does anything need to be done in the monetary sphere at the Community level if the single market is to function effectively? The fact that the Delors Committee has been set up suggests that the heads of government believe that there is at least a prima facie case to be examined. I would certainly go much further, as would many others, and say that a single market will not work unless there is—I put this as a minimum—a high degree of stability of exchange rates within the Community. For 10 years now, even before the commitment to a single European market, the objective of stable exchange rates has had its practical expression in the European Monetary System, albeit without the membership of the pound sterling in the exchange rate mechanism. It follows therefore that for the existing members of the exchange rate mechanism, the need for greater exchange rate stability must—with 1992 in view—have even higher importance than hitherto. Indeed, such stability seems essential if the single market, let alone any further economic integration of the Community, is to have any real meaning. To my knowledge the British Government have never questioned the desirablity of a high degree of stability of exchange rates, not only within the Community but on the world scale.
  Differences arise on how this stability is to be achieved and maintained and what priority it is to have over other economic objectives with which it may conflict. It may surprise some of my noble friends to know that I regret that the public debate on future developments has been so much in terms of a single European currency and a European central bank. These are perfectly proper terms for an academic discussion. They are by no means ignoble objectives—in fact they are ones which I thoroughly support—but they have a highly emotive effect in international negotiations since they touch on sensitive symbols of national sovereignty or autonomy, or at any rate perceived autonomy. The thought of Britannia on our 50p coin being replaced by Europa—presumably with the bull—would make many throw up their hands in horror.
  A long period of great stability of exchange rates is needed. We may then have to consider a single
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  currency. As for talking of a European central bank rather than asking which, if any, functions of a national central bank must now be put upon a Community basis—for example, within a strengthened European monetary committee—this raises questions of how the governor is to he appointed, where the bank is to be located and to what political authority it should be responsible. Much as I believe in the eventual need for a single currency and a European central bank, I do not think that these questions are of such urgency that they must be tackled now. If pressure for them now increases, however irrational is resistance to Britain's entry into the exchange rate mechanism, I would rather leave them over for a while.
  The entry of the pound into the exchange rate mechanism is probably the single most important immediate step that should be taken. The entry of the pound into the ERM is a long way from the more lofty objectives which I have just mentioned. It may be regarded by some as a first step which would inevitably drag one along this road which leads eventually to a single currency and a single central bank. Noble Lords may remember what the Marquise du Deffand said about the legend that Saint Denis had walked two miles after his head had been cut off. She said:
  "The distance does not matter, it is only the first step that is difficult".
  I fully share and strongly support the committee's view that we should take an early opportunity to join the exchange rate mechanism. I regret that we have not long since done so. It would have been good for us and good for Europe. Noble Lords may remember that I likened the attitude of the British Government to Saint Augustine's prayer. He prayed to the Lord:
  "Oh Lord give me chastity and continency—but not yet".
  Saint Augustine was, however, shrewd enough not to add the words, "but when the time is right", thereby saving himself the embarrassment of constantly being asked to define the right time. As the report points out, many of the earlier arguments against our membership of the exchange rate mechanism have lost their validity.
  The argument which is heard most nowadays is that exchange rate stability cannot be attained if there are substantial divergences in economic policy leading to substantial differences in such matters as growth and, above all, inflation rates. These indicators are of course influenced by many other factors, but they are—particularly inflation rates—especially under the influence of monetary policy. Monetary policy is one of the most important instruments for affecting exchange rates. It has been argued that further steps towards greater monetary unification via relative exchange rate fixity would restrict the efficacy of an important instrument of national economic policy. It would follow, therefore, that one cannot move on the exchange front until there has been considerable convergence—somebody called it "our old friend convergence"—of national economic policies.
  I have two comments on this view. It seems to me inconsistent to cling to an absolute automony of national economic policy, which many of us would in any event regard as increasingly illusory, while urging

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  convergence as a precondition for exchange rate stability. On this basis, exchange rate stability will be postponed to the Greek Calends. The other point is that this view also ignores the fact that maintenance of stable exchange rates is a powerful factor for directing national policies towards greater convergence. The history of the EMS, as indeed the older history of the gold standard and the history of Bretton Woods, demonstrate that, as the noble Lord, Lord Cockfield, pointed out, although I shall have a word to say about a further point he made in that regard.
  They have shown how great is the importance of this commitment to exchange rate stability in actually furthering convergence of national economic policies. Of course, convergence produced by an obligation to maintain stable exchange rates is not always welcome. France and Italy may complain that, given the position of the deutschemark in the EMS and the rigour of the monetary policy of the Bundesbank, the effect of the system has been unduly deflationary. We have heard an echo of that argument in this country when it has been said that if the pound were in the ERM it would be tied to a deflationary deutschemark. It seems rather odd that this argument should be used side by side with an insistence on the fight against inflation having priority over all other economic objectives.
  The noble Lord, Lord Cockfield, has spoken about discipline in that regard. He has drawn a distinction between the necessity for discipline according to different governments of different political colour. Sitting where I am, I shall not follow him in that. In fact, I would go further than he, because I would say that a truly liberal trading and financial policy, whether within the Community or on the world scale, cannot be had without a degree of discipline; that is to say, without some restraint on national economic policy, whether that is explicitly recognised and institutionalised or not. It inevitably brings about a restraint on monetary policy.
  As for Europe's money system in the longer term, I hope that whatever one's aspirations—I share some of them—the question could be discussed in practical terms of what the next step should be. I put that point to the Treasury Minister who was good enough to give evidence to the sub-committee under the chairmanship of the noble Lord, Lord Kearton. He agreed that that was entirely in accord with the Government's philosophy and approach. When I went on to suggest that if that were so it would be highly appropriate for the government of a country which over 150 years ago was the cradle of monetary economics, and which has the oldest central bank, to say what those practical steps might be, I was told that that would mean "leap-frogging" the Delors Committee. I find that hard to understand as there has already been a certain amount of "leapfrogging"; indeed some powerful pre-emptive strikes have already been delivered.
  I would therefore respectfully suggest to the Secretary of State that in those matters a touch of glasnost might be appropriate. I also note that the Chancellor of the Exchequer will be speaking on the subject of this debate later this week at the Royal
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  Institute of International Affairs. I hope that he will be less coy than his Treasury colleague and that he will indulge in a certain amount of "leap-frogging".
  4.22 p.m.
  Lord Butterworth: My Lords, I should like to pay a tribute to the skill and industry of the noble Lord, Lord Kearton, in bringing the report to the House this afternoon and to thank him for his chairmanship of the sub-committee.
  A number of noble Lords this afternoon have drawn attention to the fact that the European financial area is an important stage in achieving one of the aims of the Treaty of Rome—economic integration—and much of the debate has turned on that point. Economic integration is an aim which was repeated in the Single European Act and it is therefore neither new nor revolutionary; but it has been accepted as Community policy from the beginning.
  Since the war, a disproportionate share of wealth and influence has tended to cohere around the superpowers—the United States, Russia, Japan and, probably before long, China. The question behind the report is: can Europe become so militarily organised and achieve sufficient economic integration to become the equivalent of a superpower? Its potential is enormous. It has a population of 320 million. Together EC countries have 22 per cent. of world GNP and 37 per cent. of world trade. Can the EC therefore get its act together in time and, by economic integration, seize the rewards which crude statistics of population, economic activity and military strength suggest are within its grasp?
  It has been suggested that economic integration demands that the European states should surrender sovereignty and that the internal market is one stage towards some form of political union. There is no authority for that proposal in the Single European Act. My noble friend Lord Cockfield pointed out that the Single European Act refers to European unity; but it resolves to implement it:
  "on the basis, firstly, of the Communities operating in accordance with their own rules and, secondly, of European Co-operation among the Signatory States in the sphere of foreign policy".
  That clearly foresees a relationship between sovereign states—a confederation rather than a federal constitution—with only the minimal loss of sovereignty. The Single European Act is an attempt to reinvigorate the European economy by a complete change of principle. The original approach of the EC was harmonisation—a crippling notion that a single European norm or set of norms must be found for each area. The White Paper on The Completion of the Internal Market does something new. It builds upon the crucial decision of the European Court of Justice in the Cassis-de-Dijon case. It proposes the mutual recognition of norms. The norm of any member state would he recognised by all the other states. In short, the Community is released from centralisation, and instead of the enormous dinosaur in Brussels, to which the Prime Minister quite rightly objects, whatever is legitimated by any member state, within European guidelines, will be recognised throughout Europe.

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  At a stroke, the wind of competition will, unless thwarted by bureaucratic action, be allowed to blow into every part of the economy; and if it is allowed to do its work, will raise efficiency and liberate growth. In his evidence to the sub-committee, my noble friend Lord Cockfield stressed the importance of the move from harmonisation to frameworks; from the futile attempt to impose identical rules on all member states to frameworks which lay down guidelines for each area, leaving it to member states to draw up their own rules within the frameworks.
  That approach will give to the consumer the widest possible choice of goods and services; and far from threatening sovereignty, if properly exercised, will draw the minimum necessary into the legislation at the centre—that is to say, to Brussels—and will allow national governments freedom to legislate within the overall frameworks.
  Much of the debate this afternoon has assumed the existence of the internal market and has spent time looking forward to what are the next stages. We have as yet no guarantee that the internal market will work or that it will not be thwarted. In 1992 the single market will of course be far from perfect. Let us remember, it took the United States 200 years of amending legislation to improve its market; 1992 is only the beginning, not the end, of a process.
  The big question is: shall we be tough enough to allow the market to work or will interventionist groups be constantly interfering with the market. through Brussels, to preserve this or that industry; to save a particular group of jobs? The Poitiers incident is still fresh in our minds. If governments meddle to protect some particular national interest, if trade unions cry "social dumping" whenever jobs are threatened, if their pressure raises wages in countries such as Spain, Portugal or Greece to the point where any competitive advantage in intensive production is lost, the internal market will buckle under the strain. We cannot assume the success of the internal market unless we ourselves make it successful. Economic rationalisation is bound to be painful and the social and political tensions will he difficult to contain. The new approach, if rigorously followed through, may provide solutions for many of the problems that we have been talking about this afternoon.
  In our evidence it seemed almost as though two major views emerged, one the "teleological" view that we are embarked upon a journey towards certain fixed, final and ultimate objectives and that all future moves should be judged by the extent to which those ends are achieved. The other view involves a practical step by step approach to the market, accepting change when we can foresee that its benefits will exceed its costs. However, whichever view one takes, what has already happened in the Community has brought about a much greater approximation of monetary policy than existed a few years ago.
  Perhaps I may return for a moment to the question of joining the EMS. It is my submission that it would be imprudent for Britain to join until Europe has successfully achieved free movement of capital and then sustained it for some time, for we cannot be sure that the EMS itself will survive the pressures which
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  the market will impose by the free movement of capital and the scrapping of exchange controls. Professor Curzon-Price described the EMS as,
  "a cartel of central banks attempting to anchor their currencies on the wing of a butterfly. It works fairly well on a fine summer's day".
  I admit that a more difficult question is whether full economic integration can be achieved without the introduction of a common currency and a European bank. The balance of the views before us suggested that monetary union would not be possible until member states achieved a much greater degree of convergence in economic policy and a much closer co-ordination of fiscal policies. Member states still need to agree what those policies should be. Moreover, as we saw in the debate on the structural funds, it will also be necessary to acquiesce in substantial transfer of wealth, on suitable occasions, between rich and poor regions of the Community.
  I submit that there is no economic reason to regard monetary union as essential for the completion of the common market and our first overriding priority should be to see the completion of that market. Monetary union would necessarily involve a loss of sovereignty over economic and monetary policy and it would seem to imply some close political integration and institutional changes the ramifications of which have not yet been contemplated.
  In the meantime, with the internal market, if it is successful, the unified capital market will put currencies in competition with each other, causing national inflation rates to converge. In such a situation, is it entirely fanciful to suggest that, if Europeans really become free to bank in any European currency which they choose, a single European currency may not spontaneously begin to emerge from the market?
  The creation of the internal market will require an enormous effort of collective will. Economic integration will require a sufficiently strong body of European opinion in its favour, a deep conviction to bring it about, and once that is present the necessary legal and administrative changes will cease to be difficulties.
  4.36 p.m.
  Lord Benson: My Lords, I do not think anybody will dispute the principle that the economic and financial barriers of the common market should be removed as soon as possible. I do not doubt the principle; I have grave doubts about the timing. I gravely doubt whether the administration of the Community is strong enough to make it possible or practicable to achieve this for a great many years.
  Let us look at the facts. The structural organisation of the Community comprising, as it does, six separate layers of authority is complex and not conducive to efficiency. There is no single line of responsibility or authority from the decision-making body at the top down through the various levels to the member states where the bulk of the revenue and expenditure takes place.
  Secondly, fraud and irregularity in the Community is acknowledged to he rife, which is a sure sign of weak administration. Political will to stop it, to prevent these corrupt practices, is absent. Thirdly, the

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  financial controls operating in the member states are weak or non-existent. Fourthly, we watched with alarm the mismanagement of the common agricultural policy, which absorbs 70 per cent. of the budget and has accumulated huge stocks of unsaleable goods which are carried at figures far above their realisable value.
  Virtually every report by the Court of Auditors which has been made in recent years has drawn attention to mismanagement or inefficiency or both. Year after year, the Court of Auditors has drawn attention to grave defects in the administration and they have not been corrected adequately or at all. The report of the Court of Auditors on the accounts of the Community for 1987 implies—and I use a moderate word—that the accounts are not true and fair. I think that if any one of your Lordships cared to glance at the first chapter of that report you would be gravely shocked. Added to all that, the Community is labouring under the enormous burden of overhead expenditure in attempting to carry out the administration with translation of everything into nine separate languages.
  Unless these defects are corrected now, what can we look forward to in 1992 is an even more ragged and inefficient administration in which there will he gaping holes and wide inconsistencies. Fraud and irregularity will no longer he rife; it will be rampant.
  I turn now to my second point. There has been much talk of a single currency and a central bank. The strength and weakness of any currency depends on the strength and weakness of the economy in which that currency circulates. I do not believe that the nations outside the Community will have any faith in a currency which can be eroded by any one of the 12 member-states at any one time.
  As the noble Lord, Lord Cockfield, has pointed out, finance ministers sometimes depart from prudence. For those reasons I do not think it is possible to contemplate a single currency until there is some form of federal government which can control the economy of the Community as a whole. I do not believe that that is politically possible until deep into the 21st century.
  If your Lordships would care to glance at page 82 of the report before this House, Question 289, it will be seen that the Economic Secretary to the Treasury did not see a single currency arising within this century. It follows that it will be deep into the 21st century, if then, before we can look forward to a single, efficient Community market. The removal of cross-border barriers, the necessary harmonisation of legislation and of taxation, the free movement of people, services, goods and capital, and the establishment of a single currency and a central bank are a long way off. In short, I believe that the objectives proclaimed for 1992 are not attainable. We have been hypnotised for too long by gazing at pie in the sky.
  4.40 p.m.
  Lord Geddes: My Lords, I hope that today of all days is not a poor one to start with a cricketing analogy. I am batting at No. 9 and frequently that position is occupied by a quickish bowler, so I intend to be pretty quick this afternoon.
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  I should like to thank our captain, the noble Lord, Lord Kearton, for his very able stewardship of Sub-Committee A. As the noble Lord, Lord Seebohm, said, he left us breathless on a number of occasions, but I think we just managed to keep up with him. He did a masterful job in chairing the committee.
  The committee heard evidence, as has been heard from many witnesses, and found a great diversity of opinions on almost every subject covered. On most matters it was hard to find a consensus. least of all on the question of Britain's participation in the exchange rate mechanism (ERM) and thence, I submit, a common currency.
  London is the financial centre of Europe. Should not every effort be made to retain that prime position? As my noble friend Lord Cockfield pointed out both in his evidence and in his speech this afternoon, the importance of the financial services lies not only in the industry itself but also in the fact that those services are the "essential underpinning" of manufacturing industry. It is surely of vital importance to the whole economy that the financial services sector is in flourishing health.
  Concern has already been expressed in some quarters of the City that our relatively new stringent controls could make London less attractive than other European member states in an internal market. No opportunity of reinforcing the City's continued pre-eminence should be lost.
  The committee drew the conclusion that Europe will gain substantial benefit from the internal market in financial services and the liberalisation of capital movements. Some witnesses felt that London in particular would benefit.
  Again I unashamedly quote my noble friend Lord Cockfield. He said:
  "The United Kingdom has more to gain than anybody else in this field simply because we have a strong, active, enterprising financial services sector".
  Mr. Anthony Loehnis of the Bank of England agreed that the consequences of the creation of an internal market as far as concerned London should be "positive".
  The committee went on to conclude that the gains of the internal market and liberalisation would be even greater if those achievements were followed by more stable exchange rates, which in turn would reduce the exchange rate risk which businesses now suffer and would mean that resources would be released for new development.
  Many have asked both this afternoon and outside this House how more stable exchange rates are to be achieved. We think that the machinery is there in the ERM, and I strongly endorse that. Members of the ERM have found that it has been successful in reducing exchange rate volatility and in combating inflation.
  It is the policy of Her Majesty's Government—at least until my noble friend the Secretary of State speaks this afternoon—that Britain should join the ERM when the time is ripe (I think the word is "ripe", though some say "right"). The committee heard from Mr. Patterson, the MEP, that the other member states feel very strongly that Britain should join the ERM without further delay. It is considered

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  that the old arguments for Britain's non-participation are no longer applicable. In my submission, my noble friend Lord Cockfield was right when he said, "the time is now getting very ripe indeed".
  I said at the beginning of my comments that we found it hard to find a consensus from witnesses on most matters. However, nearly all, whether they welcomed it or not, saw a common European currency as the inevitable and logical final step to full financial integration. The noble Lord, Lord Seebohm, has already quoted the comment of my noble friend Lord Cockfield—and I wholeheartedly endorse it—that:
  "I have no doubt at all that if you are going to reap the full advantages of European integration, then you have to go through the route of a common currency".
  As recently as last week first Mr. Delors and then Mr. Van der Klugt, president of Philips. added their considerable voices in support.
  Given that Europe is committed to economic integration, half measures are surely to be avoided. Proposals such as the abolition of exchange controls are to be welcomed, but these half measures should not be seen as an end in themselves. While they may facilitate internal movements within the EC, they may also make us more vulnerable to the rest of the world.
  I quote from one witness, Mr. Costa of the European Commission, who asked:
  "What is the point of harmonising this and standardising that, when eventually the ultimate barrier is still there and commodities cannot move because one country has an exchange parity too low?"
  He for one felt that a single market without a single currency would be "highly unstable".
  Surely the essential stepping stone to a common currency is that every member state should be a member of the ERM. Discussions as to whether or not Britain should join the regulatory system of the EMS have been going on for long enough. It is time to dispense with political rhetoric and join the ERM before Britain's standing as a Community member and that of London as the financial centre of Europe are thrown into jeopardy.
  Finally, on a much wider note, it might help the overall climate in this and other contexts if we in this country gave overt recognition by saying so to the fact that we are in Europe. Not just the media but most individuals are prone to refer to the Continent as Europe and to these islands as the United Kingdom. Both are part of Europe, and the sooner we British realise that and—more important—say so, the better.
  4.50 p.m.
  Lord Bruce of Donington: My Lords, on this side of the House we wish to thank the noble Lord, Lord Kearton, for having presided over Sub-Committee A and, to use a term which has already been aired in this House, steered it towards its report. We are also grateful for the very comprehensive way in which he has presented the report to your Lordships' House this afternoon.
  I wish to join the noble Lord, Lord Kearton, in welcoming back to this House the noble Lord, Lord
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  Cockfield. His party and mine are in frequent and violent disagreement and the noble Lord himself, with considerable ability, is occasionally able to give a non-partisan gloss to an intensely partisan speech. Nevertheless, we welcome him back. I welcome him hack because of the clarity with which he expresses his ideas and the honesty with which he presents his case. I do not know who was the author of the term, and although he may have "gone native" we are very glad to see him repatriated here.
  The debate this afternoon on the completion of the internal market with particular reference to the European financial area is part of the process of what has been termed, somewhat quaintly I think, "the completion of the internal market". It is common ground, as has been expressed in many official documents, that most of the internal market has already been established. What is now required is a few finishing touches on the side of our visible trade and a fairly considerable extension of the freedom to establish financial services and to liberate capital movement.
  I say that because I was under the impression that we entered the Common Market in 1972 and that we had been operating it ever since. Some 95 per cent. of the Common Market has already been in existence, as regards Great Britain, for some 17 years. There has been a very free flow of goods across the frontiers, not least—as the noble Lord well knows—into the United Kingdom, amounting almost to a flood. So the Common Market has already been with us for some time. What we are concerned with is putting the finishing touches to it.
  It is sometimes the practice, and it grows more and more into a habit in political and academic gatherings, to discuss such questions in almost abstract terms. Thus the term "internal market" acquires a life of its own. The single market becomes almost a physical concept. But the Community does not only consist of bankers, heads of great financial institutions, politicians of eminent rank, captains of conglomerates all over the world. It is not only confined to the perhaps quarter of a million people in Western Europe and in the Western world who control the masses of capital either in its corporate or in its individual form which have such a profound influence on the economies of the world and the individual nation states.
  If we talk of the Community and Community countries, we are talking not merely of people in very august places, many of them in your Lordships' House; we are talking about millions of individual people in Europe—not all of them rich, some of them very poor. We are talking not merely of people but also of communities of people. When we congratulate ourselves on the progress that we have made and when we make known ideas that we seek to pursue in order to achieve further progress on the lines that we have ourselves considered very beneficial, perhaps it is wise to examine just what has happened so far. Otherwise we tend to have our minds diverted from what can be factually and historically established to yet another star in the future. We must not allow our fixation upon a new Holy Grail to divert us from the facts that unfortunately lie under our noses.

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  It is regrettably a fact that under the Common Market rules so far and with the progress that has been made, unemployment has now risen to 15 million in the Community from about 5 million in 1972. I know that there have been differences in the number of members, but it should also be remembered that that can be compensated for by the fact that alien workers from Portugal and Turkey, at any rate in Germany, who have now been sent hack were not counted in the original unemployment figures.
  According to a report concerning poverty, which was recently published as a European parliamentary document, the poor now number 45 million in the Community. Moreover, there are still vast regional differences. In spite of the existence of the social fund and the regional fund, regional disparities have become progressively worse.
  In ordinary economic terms, growth in the Community, according to its own economic reports, is still substantially below the growth rates which obtain in the United States and Japan. Moreover, the whole balance of trade as between the individual countries of the EC has turned and has become greatly unbalanced. I only need to mention as regards the United Kingdom that from the position of a current balance of trade on a balance of payments basis in 1980 and 1981 we now have a position where our trade deficit on visible accounts with the European Community has reached some £13 billion in the 11 months to the end of November. It is likely to reach £15 billion by the end of the year.
  Our entire adverse balance on current account in the United Kingdom is accounted for by our adverse balance of visible trade with the remainder of the Community. These facts can be checked and I mention them because, are we to assume that the completion of the process which we have already undergone over the last 17 years is likely to produce any different results?
  These are the matters which we ought to be discussing or thinking about. It may be all very well for the very rich and powerful throughout the Community and in the world that this should be done, but what will happen to ordinary people? It is against those five considerations that I venture to lay before your Lordships that we now consider the financial services a part of the process. Let me say straight away that in our view there should be an increase, and a benefit to the United Kingdom in particular, of the right to establish insurance other than life assurance services throughout Europe.
  The noble Lord, Lord Reay, will perhaps recall that I took a leading part when I was in the European Parliament in urging just that in order that there could be a freedom of establishment. I have no doubt that as regards employment opportunities and the general facilities of commerce, the right of each member state to establish financial services over a whole range, including insurance in various member states, will facilitate matters.
  As regards the freedom of movement of capital, once again I can conceive of advantages to corporate
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  bodies, vast institutions, financial institutions and banks. I can see that. I can see that freedom of movement of capital will greatly facilitate mergers and acquisitions across a far wider area than is the case at present. But we need not be so intoxicated to think that in all circumstances this drive for mergers and acquisitions will necessarily be to the benefit of the people in the member states involved. In our own country—this is not a matter of great controversy, in fact the CBI tends to agree with me—this massive devotion of capital and of leverage by banks and operations of this kind lead to the adoption of shorttermism within manufacturing industry. We are faced with the necessity of producing short-term solutions to problems rather than long-term plans for the benefit not only of companies and their employees but also for the benefit of the nation as a whole.
  We have to face the fact that in many instances the financial world itself, and the limited number of people who comprise it, are more powerful than governments. That may be considered advantageous by the noble Lord, Lord Young of Graffham. His position obliges him not to determine any kind of a national economic policy, but to allow the free play of ordinary market forces. As I say, that fact may be agreeable to a comparatively small minority of rich and powerful people in the world. But I suggest to your Lordships that on the basis of what has happened so far it has not been a very conspicuous success among that vast number of people who are in a less fortunate position than ourselves.
  There are among us those, including the noble Lord, Lord Cockfield, who welcome external discipline, provided of course that his own party's policies have been established before the external disciplines are exercised against any government of a different political complexion. The drive towards the establishment of a financial area has, as has been accurately pointed out, evoked different opinions among members of the committee. Indeed there were many differing views among those who gave evidence before the committee. I was present at most of the committee sittings and I am still unable to discern just how all these plans, and the capital rationalisation, which the noble Lord, Lord Butterworth, admitted would be painful, will affect the fortunes of the ordinary man and woman in the street. I ask for whom it will be painful. I am not talking just of the ordinary people in our own country but of those in Germany, Spain. Portugal, France, Italy and the other EC countries.
  If we are genuinely convinced that these provisions are to the benefit of the mass of people, then we should support them. But in the meantime many of us will regard—I do not want to get too involved in any argument that may arise between the noble Lords, Lord Young and Lord Cockfield—the maintenance of the nation state with its own democratically elected government, subject to the will of the people, as being the ultimate determinant of the destinies of the people in whose political system they function, rather than the imposition upon them of an external discipline which is impersonally applied by nonelected people with no responsibility whatever to the body politic at large.

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  We hope that the co-operation between the member states of the Community and the cooperation between sovereign states will progressively increase. We hope that it will become ever more harmonious and will result in agreed common objectives to which political assent has been obtained. We value ever increasing co-operation within the European Community. But for our part we prefer and indeed insist that in the final analysis it is the people through their elected representatives who determine policy and not those who are in the fortuitous and perhaps pleasant possession of great financial power and who occupy positions of great financial responsiblity.
  5.7 p.m.
  The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, I should like to take this opportunity to thank the noble Lord, Lord Kearton, and his committee for producing this comprehensive report on an important and wide-ranging subject. It is not only a useful contribution to public debate, but it has also been the focal point for our debate this afternoon. I understood clearly why so many compliments were paid to the noble Lord, Lord Kearton, for the way in which he chaired the committee when I heard the way in which he introduced his report today. His speech was an admirable model for us to follow. It expressed the very essence of a report which, I believe, will be a great contribution to our thinking.
  The European financial area is an essential element of the single market. It will enhance competition in the provision of financial services and it will give more choice to individuals and businesses. It will offer a major challenge for the United Kingdom financial sector. I am sure we will seize this as an opportunity to build on our traditional strength.
  I am pleased that the committee has emphasised releasing rather than constraining market forces and that it sees liberalisation and deregulation, rather than bureaucratic harmonisation, as the way forward for Europe. It is not up to governments to create a successful European economy. The role of government is to encourage individual initiative and enterprise, which is the key to the future prosperity of Europe as a whole. Surely the British experience in the 1960s and 1970s showed how an increasing burden of government doomed enterprise. Only in the 1980s, when we reduced the burden of government, did Britain become the fastest growing major European economy.
  Lord Molloy: My Lords, it was also the country with the most unemployment.
  Lord Young of Graffham: My Lords, I shall certainly come to the matter of unemployment where our record is as good as that of any other state in the Community.
  The Community's commitment to the free movement of capital in Europe is an important element of a free market in financial services. In Britain we abolished exchange controls in 1979. I
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  hope that member states that have not already done so will liberalise all capital movements, as they are already committed to doing.
  I know that some member states fear that as a result capital will flow out on a large scale. Our experience was the opposite. When we removed exchange controls the financial markets saw it as a sign of the economy's strength and money flowed into the United Kingdom at an almost embarrassingly fast rate. Other members states have argued that dismantling exchange controls will lead to widespread tax evasion. I am sure that those fears are overstated: there was certainly no evidence of massive tax losses as a result of our own removal of exchange controls.
  Much more needs to be done to create a truly integrated financial market which will enable the European financial services industry to develop in competition with Japan and the United States. For example, progress needs to be made to secure common standards of banking supervision and capital adequacy. That is an issue about which my department is concerned. Banking and financial services were identified at the Hanover Council as one of the four priority areas for the internal market.
  Your Lordships' committee has concluded that the ambitious goals of full monetary union, with a common currency and a European central bank, are neither economically nor politically practical in the foreseeable future. I welcome their common sense approach. Equally the committee recognises that there are practical steps on which early progress can be made. The Government firmly share that view. Action speaks louder than words. It was the United Kingdom which first abolished all exchange controls, well ahead of most of the rest of the Community. It was the UK which last October first issued Treasury bills denominated and payable in ecus. So, contrary to the widespread perception, we are in the forefront when it comes to making practical contributions to monetary developments in Europe.
  The report focuses on the creation of a European financial area. That is a development that the Government support wholeheartedly. But we want to see a European financal area open to third countries: the so-called "fortress Europe" is no more appropriate in the financial sector than in any other. That is why the United Kingdom has the same freedom of capital movements with third countries as within the Community and why we have urged others to follow our lead. That is also why we consider the Commission's proposals for reciprocity in financial services to be undesirable in principle and unworkable in practice.
  The noble Lord, Lord Kearton, in introducing the debate, gave a history from Bretton Woods to G7, from the snake to the exchange rate mechanism. He drew attention to the lifting of exchange controls, which is one of the more important if not the greatest of the hurdles that have been overcome in the drive towards a single market. He said that he felt that we should be a member of the exchange rate mechanism although until 1985 it had been in our favour to be outside the mechanism. He thought that since then it would have been in our favour to join. The Government's position is very clear; no one can say

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  it is not. It is, "when the time is right". The determination of when that time comes is less clear, but I hope that as I continue my speech I shall make the position a little clearer.
  The balance of payments deficit to which a number of noble Lords have referred is something that we do not want. However, it is only one side of a coin. The other side is our substantial investment overseas which even last year was considerably in the favour of the United Kingdom. What the noble Lord, Lord Kearton, said was in line with our approach to this subject and our general approach to the European Community as a whole, which was the theme of the Prime Minister's speech at Bruges last year. It is a step by step approach. It is only by progressing step by step and looking at the practical consequences of what we do that Europe will become a real working body.
  I am delighted to be able to welcome back my noble friend Lord Cockfield. I hope that he will not mind too much if I describe his speech as his second maiden speech in your Lordships' House. He has been absent—in word if not occasionally in presence—for the past four years. He returns with a greater claim than any to be father of the single market. It was his White Paper which gave it its impetus and thrust; it was his intellectual vision which drove it forward. He left the Commission at a time when he could feel great satisfaction that of the 300 or so measures that are necessary not only had the majority gone through but most of the difficult ones are already agreed.
  On the other hand, the noble Lord seemed to feel that we require some kind of collective discipline in financial matters. The effective discipline is the market. It is the effective discipline of exchange rates—fluctuations in exchange rates are perhaps as unwelcome to governments as they are to industrialists—which imposes some discipline on the actions of governments. The noble Lord seemed to feel that the great advantage of fixed exchange rates is demonstrated by the fact that we had only two changes in the many years after the war until the late 1960s. Those who were engaged in industry in those days saw the over-priced pound contribute to the erosion of our industrial advantages around the world. It may well be that had we had floating or more flexible exchange rates in those days we should not have seen many of our competitors rise to a preeminent position by the end of the 1960s.
  All that has been said today relates to a single European currency. My noble friend Lord Cockfield said that he could foresee a single European currency within 11 years—by the end of this century. I find it difficult to understand—and the point has been made by others during the debate—how one can have a single European currency without a single European economic policy. The two should go together. However, let us consider the latest OECD figures for fiscal budgets. As indicated in the Autumn Statement the United Kingdom will show a fiscal surplus of 0.5 per cent. of GDP, and I read in the newspapers that that may well be higher. France shows a deficit of 1.6 per cent. of GDP, which is three times as great, and Germany a 2 per cent. deficit which is four times as
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  great. Italy shows a deficit of 10 per cent. which is 20 times as great. Those are matters on which there must be some convergence of the economies.
  There are other areas of concern. For example the German chamber of trade here reported that German industrial production is emigrating; it is leaving Germany and coming to the United Kingdom. The VDI (the German CBI) told me not many months ago that it was losing many members to the United Kingdom. I asked the reason: it is that German payroll tax is over 100 per cent. and its corporation tax 50 per cent. I hope that that issue will be dealt with. I believe we can live in a competitive Europe in which good taxes, I venture to hope, will in the end drive out bad.
  The noble Lord, Lord Banks, also thought that there would be need for monetary union by the year 2000 but characterised it as a leap in the dark. A leap in the dark is something that none of us would wish to take. We should have to be absolutely certain of where we were going.
  The noble Lord said that we should not forget "social Europe". That is a matter which a number of noble Lords have mentioned. Looking at what has happened in Europe over the past few years one can see that in terms of "social Europe" it is the United Kingdom which is leading the way. It is the United Kingdom which today has the fastest falling rate of unemployment in the Community. It is the United Kingdom which of the major countries in the Community can boast of having more people in paid employment than at any time in our history, disregarding those on YTS and other schemes. It is the United Kingdom that has shown during the 1980s the greatest growth in productivity of any nation in the world, including Japan. If it is a social Europe that is sought, by far the best protection that can be given to any employee is a job. It is not simply a matter of providing statutory protection of work, because companies do go into liquidation.
  The noble Lord, Lord Seebohm, said that the commercial world wants a single curency. That is not quite the message that I receive when I travel around the country. Many industrialists who are exporters press me for a lower pound. At almost every level they are prepared to have a lower pound. Importers, who are people whom I do not encourage too much for reasons which are self-evident, feel quite happy, I am afraid, with the thought of a pound that goes higher and higher. In all these matters we must find a balance of opinion. As a whole the CBI wants stability; it sees a low rate of inflation as the most important matter.
  Over the next few years I hope that we shall see an increase in growth in the use of the ecu. There are ways in which we could start to use the ecu as a trading currency. We could perhaps have contracts denominated in the ecu; certainly there could be more Treasury bills made out in ecu and perhaps more private loans also. That is one way in which we may see the growth of a single currency in Europe.
  The noble Lord made a point that concerns me greatly. He said that Article 13 means that we must have a Europe that is open to both goods and people. We will do our level best to streamline the movement

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  of both, and we shall succeed. However, the single market is not intended to provide a haven for those who push drugs or practise terror. All of us in Europe must work together to find ways of eliminating both those modern scourges of our time. It is the growth in the use of drugs which is today causing increasing concern throughout the Community, to Ministries of the Interior and to our own Government. Terrorism is a concern that needs no further words.
  My noble friend Lord Reay said that there was no immediate need for a central bank and reinforced his point that a single currency would entail a single financial policy. He drew attention to the growth in the use of the ecu, which is something that I should hope would not merely be discussed but practised. I should like to consider the comment that we are not prepared to enter into discussions about a central bank. The Governor of the Bank of England is a member of the Delors Committee which is looking at the question of the creation of a central bank. Your Lordships' Committee also felt that that would not be appropriate at the present time. My noble friend also endorsed a step by step approach.
  The noble Lord, Lord Roll of Ipsden, drew attention to dual standards in financial markets. I hope that the dual standards that exist will gradually go and that home standards will be practised abroad and extended all over the world. He expressed concern—a concern that has also been voiced to me during my travels overseas in the United States and Japan—about the single market representing some kind of shield for Europe. I think that we must take great care in the use of reciprocity. If we are not careful reciprocity itself will become a shield that prevents us from entering markets overseas.
  The noble Lord drew attention to the need for long periods of stability in exchange rates. That would have to continue for some considerable period before one could see the evolution of a single currency and a single bank; in other words, one comes back to the step by step approach.
  Finally the noble Lord made an appeal for more glasnost. I believe that one cannot perhaps have glasnost without more perestroika. We are talking about devolution of responsibility and not about putting everything together into a central body.
  My noble friend Lord Butterworth was the first speaker in this debate to mention those whom I consider to be the principal beneficiaries of the European Community; namely, the consumers. There are over 320 million consumers within the European Community. They are the ones who will benefit from a competitive economy. It is only by having a competitive economy in which the benefit to the consumer is put first at all times that the economy of Europe will grow and flourish, our exports will sell and our standard of living will rise.
  My noble friend also laid great stress on the working of the market. He said that there were some influences that we should ignore, such as trade unions and social dumping. I shall offer him another issue: what about European industrial strategy? That is something which is mentioned to me from time to time and it sends a shudder of fear down my back. He
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  said that it is imprudent to join until the Community achieves free movement of capital for some time. That is a definition of when the time is right. I do not say today that that is necessarily the Government's definition. We have a number of hurdles still to overcome and we must see what happens then. The noble Lord spoke about the spontaneous evolution of a common currency. I believe that that concept is more and more coming through in our discussions.
  The noble Lord, Lord Benson, drew attention to the fact that collective agreement is not the same as collective wisdom and took as his example the common agricultural policy. At one time when he referred to the qualified accounts of the European Community I thought that he was about to make a request that I send in my department's inspectors. Happily, the noble Lord did not go that far. However, he certainly made the point again that a single currency would need a single market. I believe that we can achieve a single market without having a single currency and indeed do it in our present position, because the single market is about the removal of non-tariff barriers. That is what we must achieve in order to have the free movement of goods and services.
  How do we pay for them? We have already received testimony from the great increase in trade between us that it can be achieved by present practices. My noble friend Lord Geddes was an advocate of the theory that the time is right today. Membership of the ERM is not the same as having a common currency. It does not mean that once we are members of the ERM there will not be future variations in exchange rates.
  I turn to the remarks of the noble Lord, Lord Bruce of Donington. I hope he does not mind my saying that when he approached this matter he gave me the impression of being a firm non-believer in the Community. He reminded me irresistibly of a vegetarian extolling the virtues of a fillet steak. That is because I believe that he did not understand the great advantages of being part of a single community in Europe. He seemed to be under the impression that we entered the Common Market in 1972 and thought that we had been in it all along. It may well he that we thought we were doing just that in the early 1970s, but it quickly became apparent that the non-tariff barriers were far more important indeed than the tariff barriers that we did manage to eliminate.
  The whole thrust of the work of my noble friend Lord Cockfield in the last four years, which I believe will come to fruition in the next four years, shows how much the single market will mean for the living standards of the Community as a whole. I could not follow the argument of the noble Lord, Lord Bruce, when he said that freedom of movement of capital gave advantages to great corporations. No, it does not; it gives advantages to ordinary people—to the consumer.
  I have already made the point that it also acts as a discipline on governments. I am happy to confirm to the noble Lord that my job, and that of the Government, is not to determine a national industrial policy. That is not the role of this Government. It is only in the last 10 years, when governments have

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  avoided trying to create such a national industrial policy, that we have seen the enormous outpouring of wealth creation and growth.
  Lord Bruce of Donington: My Lords, perhaps the noble Lord will permit me to correct him. I did not say "national industrial policy". I said "national economic policy". The two are slightly different.
  Lord Young of Graffham: My Lords, I am very happy to say economic policy has been in the hands of two Chancellors of the Exchequer since 1979 and we have seen the enormous benefits that have occurred as a result of that. If the noble Lord is in any doubt, I suggest that he leaves your Lordships' Chamber at the conclusion of this debate and wanders around the United Kingdom. He will then see the enormous differences that have taken place over the last 10 years.
  However, all these matters are not the point of today's debate, which is simply this. Your Lordships' committee has had a thoughtful and I believe a thought-provoking report which has been commented on by many in your Lordships' House. We are very glad to welcome back the noble Lord, Lord Cockfield. We can see that the time is coming when there will be a convergence of economic policies in Europe, hopefully through negotiations to a single market, in the way that we look on industrial and commercial behaviour. Step by step we have to work closer together to achieve the working of the single market, closer economic union, and all those matters which the noble Lord, Lord Cockfield, pointed out quite correctly were matters which we had agreed to do when we signed the Treaty of Rome. Indeed Article 102A talks about the need for co-operation in economic and monetary policies. However, it does not impose an obligation on member states to introduce the economic and monetary union as such. Indeed, the Article 236 procedure makes it abundantly clear that we must have unanimity in this and that we have to call intergovernmental conferences and ratification by national parliaments.
  We must work towards the completion of the internal market. We have to work closer together step by step so that we can all achieve a Europe which will bring about the one endeavor that Europe can and should achieve: that of great wealth creation and better living standards for all 320 million members.
  5.33 p.m.
  Lord Kearton: My Lords, I should like to thank all those who contributed to the debate. At the beginning I expressed the hope that the debate would be both informative and instructive. It has indeed proved to be just that. We have had a remarkable range of speeches of great depth. All aspects covered in the report have been touched upon by the different speakers. We had from the noble Lord, Lord Bruce, a contribution which, if I may say so, we have come to expect—but we are none the worse for that. I should like to thank in particular the Secretary of State for his thoughtful, constructive and positive reply to the points made in the report. He left me, and I am sure the whole committee, satisfied that he—representing the Government—is moving in the
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  direction that the committee recommends. I beg to move that the House takes note of the report.
  On Question, Motion agreed to.

  Children Bill [H.L.]
  5.34 p.m.
  The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
  Moved, That the House do now again resolve itself into Committee.—(The Lord Chancellor.)
  On Question, Motion agreed to.
  House in Committee accordingly.
  [The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES (BARONESS SEROTA) in the Chair.]
  Clause 50 [Registration and regulation of voluntary homes]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 205A:
  On Page 45, line 40, at end insert ("; or
  (e) any home which is exempted by regulations made for the purposes of this section by the Secretary of State.").
  The noble and learned Lord said: This amendment will enable the Secretary of State to exempt certain homes from having to register as voluntary homes under this clause. This is necessary as there are a number of establishments which would otherwise be required inappropriately to register as voluntary homes. These include some establishments which are essentially day nurseries and homes which would need to register simply for the purpose of their use for holiday play schemes.
  An equivalent power has already been provided for in Clause 54(4)(b) in respect of registered children's homes and this amendment would align the powers in respect of each type of home. I beg to move.
  Lord Elwyn-Jones: Here we have an early example of government by regulation. We shall be discussing the significance of that at a later stage in consideration of the Bill.
  Lord Renton: I do not dissent from the amendment moved by my noble and learned friend. However, it is a little difficult to fit it into subsection (3). It defines voluntary homes and then states that the expression does not include—and it lists a number of exclusions. The first one is described as a
  "nursing home, mental nursing home or residential care home".
  That exclusion is so wide that it makes one wonder whether there will be much in my noble and learned friend's regulation. I had it mind to raise this matter on the Question, that the clause stand part. However, this is a more convenient moment to do so.
  For example, in a home where mentally handicapped people of various ages are cared for for life—they are residents, they are called residents generally—presumably they are in a residential care

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  home. It could be said that some of them require mental nursing. Therefore it is a mental nursing home also. It would be very helpful at this stage if my noble and learned friend explains why we have such a wide exclusion in subsection (3)(a), and how that will affect the content of his regulations.
  The Lord Chancellor: On my noble friend's question, "voluntary home" means,
  "any home or other institution providing care and accommodation for children which is supported wholly or partly",
  and so on. It therefore cannot include a mental home for people who are to be in for life in the manner that he has suggested.
  Nursing home, mental nursing home or residential care home, and so on, are defined in Clause 77. However, the concept is that homes which have a primary medical content in them would not be regarded as coming within "voluntary home" for this purpose. The need for the regulations that I have mentioned is to deal with some rather special situations that can arise. These are best dealt with by regulation because one cannot envisage every possible type of voluntary home. Matters change. After all, this Bill is designed to last for a considerable time. Social conditions and social customs will vary. One has to have some degree of flexibility in the regulatory structure which is used to control them.
  Lord Renton: I am very much obliged to my noble and learned friend, especially for drawing my attention to the definitions in Clause 77. He is attempting to dovetail his new definition which affects children, as he says, with what is already in the Registered Homes Act 1984. That makes the position perfectly clear. I am most grateful.
  On Question, amendment agreed to.
  Clause 50, as amended, agreed to.
  Clause 51 [Duties of voluntary organisations]: [Amendment No. 206 not moved.]
  Baroness David Baroness David moved Amendment No. 206A:
  Page 46, line 25, at end insert—
  ("(4) Where a child is—

  (a) accommodated by or on behalf of a voluntary organisation, and

  (b) is not being looked after by the local authority by virtue of section 18(1),

  the voluntary organisation shall be under a duty to review the case of the child.
  (5) In carrying out its duty under subsection (4) of this section the voluntary organisation shall comply with any regulations made by the Secretary of State for the purposes of this subsection.").
  The noble Baroness said: In moving this amendment, I shall be speaking also to Amendment No. 206F. The aim of the amendment is to place voluntary organisations under a duty to review the case of any child not in care. I hope that this will be an uncontentious amendment, since few voluntary organisations now look after children who are not in care to local authorities. Most voluntary organisations ensure that all children in their homes have their cases reviewed regularly.
  However, there are still a few voluntary organisations which look after children directly
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  referred to them by their parents. Obviously these children should be protected by a regular case review secured by a statutory duty. My Amendment No. 206F is similar, but deals with private children's homes. That amendment seeks to place private children's homes under a duty to review the cases of children who are not in care. The reasons are the same as those for Amemdment No. 206A. I hope that that is sufficient explanation. I beg to move.
  The Lord Chancellor: The point that the noble Baroness makes in relation to this amendment is a point well taken. We shall certainly consider how best this shall be done. The precise form of review may be a little different from the one provided for the local authority which we have discussed already, but we shall consider this matter further. I hope that in the light of that assurance the noble Baroness will feel able to withdraw her amendment.
  Baroness David: Yes, I shall. May I ask whether the noble and learned Lord was speaking also to Amendment No. 206F?
  The Lord Chancellor: It is particularly this amendment that we have in mind.
  Baroness David: With that, and knowing that the matter will be considered, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 51 agreed to.
  Clause 52 [Duties of local authorities]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 206B:
  Page 47, line 32, leave out ("that power") and insert ("any power conferred by subsection (5) or (7)").
  The noble and learned Lord said: This amendment serves to clarify the offence which is provided for in Clause 52(8). As currently drafted, it could be interpreted that it will be an offence under subsection (8) to intentionally obstruct others only in the exercise of their power to inspect records as referred to in subsection (7) of that clause. What is actually sought is that the offence should apply in respect of the intentional obstruction of a person exercising any of the powers under subsection (5). I beg to move.
  On Question, amendment agreed to.
  Clause 52, as amended, agreed to.
  Clause 53 agreed to.
  5.45 p.m.
  Schedule 5 [Voluntary Homes and Voluntary Organisations]:
  Baroness David Baroness David moved Amendment No. 260C:
  Page 100, line 4, at end insert ("and in particular prohibiting the use of secure accommodation").
  The noble Baroness said: In moving this amendment, I should like to speak also to Amendments Nos. 206D and 207A. The aim of these amendments is to prevent voluntary organisations from maintaining secure accommodation. At present

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  voluntary homes—homes not run for profit by voluntary organisations such as Barnardo's or the Church of England Children's Society—do not maintain secure accommodation. The regulations governing these homes, the Administration of Children's Homes Regulations 1951, do not mention restricting children's liberty and theoretically at least voluntary homes could lock up children in care. The Government intend to revise these regulations as soon as the Bill receives Royal Assent and have told the Children's Legal Centre unequivocally on a number of occasions that the new regulations will specifically prohibit the locking up of children in such homes.
  As long ago as 1983, the relevant Assistant Secretary of the Department of Health and Social Security wrote to the centre:
  "We share your view that the liberty of children in care should be restricted only within accommodation specifically approved as secure accommodation by the Secretary of State, and that such accommodation should be approved only where it is provided in a Community Home".
  Paragraph 7(2)(f) of Schedule 5, which provides for the approval of secure accommodation in voluntary homes, has therefore come as a shock. The centre has been assured that the Government have no present intention of approving secure accommodation in voluntary homes, but this provision has been inserted in the Bill in case the Government at some future date change their mind on this matter.
  Both the law and social work practice are agreed that children's liberty should be taken away only as a last resort when children are a danger to themselves or to others and cannot be accommodated in open provision. Research shows that locking up children is not a very effective way of helping them. It also shows that where lock-ups are available, they are used.
  Department of Health officials have quoted statistics showing that local authorities which maintain secure units lock up proportionately more children in care than those that do not. Where there are beds, they will be filled. At present there is a regional shortage of secure unit places. There is also great pressure on the two voluntary organisations to take over the youth treatment centres and the London borough of Lambeth would like a voluntary organisation to take over Cumberlow Lodge, which is a secure unit for girls.
  Locking up young people is an inappropriate and improper role for the voluntary sector. It is inappropriate because the voluntary sector should be trail-blazing in progressive constructive provision for difficult young people. For example, it should be creating alternatives to locking them up, such as residential care with well-trained intensive staffing or specialist foster-care. It should not be making up the deficiencies of the statutory sector. It is improper because secure units are, when all is said and done, a form of imprisonment which should be the responsibility of the state alone. This part of the Bill looks like the privatisation of prisons by the back door.
  Given the current absence of lock-ups in voluntary homes, despite their theoretical right to provide
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  them, it is clear that voluntary organisations do not want to run them. If the Government have no intention of approving secure units in voluntary homes, they could pin their colours to that mast and specifically prohibit it in the Bill.
  Amendment No. 207A seeks to prevent private chidren's homes from maintaining secure accommodation. Schedule 6 relates to the regulation of private children's homes; that is, homes run for profit. No one knows how many such homes there are or whether any lock up children, since at the moment they are entirely unregulated. This amendment seeks to delete the possibility of such homes maintaining approved secure units and specifically to prohibit them from locking up children. In speaking to the previous amendment I explained how the Government had changed their position on this point by inserting paragraph (f) in Schedule 3.
  As I have said, Schedule 5 sets out the Government's apparent volte face on this issue. It is obviously even more important that profit should not be made out of locking up children in private homes. Given the ease with which secure beds are filled with troublesome teenagers, the number of private lock-ups could proliferate. Even if the Government will not agree to a specific ban on voluntary homes running secure units, I hope they will accept that it would be quite improper for private children's homes to do so. I beg to move.
  Lord Campbell of Alloway: I shall be brief in my support of Amendments Nos. 206C and 207A. These amendments are related to Amendment No. 208, which seeks to leave out paragraph 10(2)(i) of Schedule 6. Amendment No. 208, which is related to these amendments though not grouped with them, was referred to in the course of the debate but has not already been debated, as stated in the list of groupings. Amendment No. 208 proposes the deletion of paragraph 10(2)(i) of Schedule 6. "Such homes" include any registered homes. They include voluntary homes, dealt with in Schedule 5 (hence the nexus) and children's homes.
  It is an important problem. When speaking to Amendment No. 208 during the debate on Amendment No. 52, I maintained that the novel provision as to the use of secure locked accommodation for children was neither justifiable nor acceptable. At col. 1278 of the Official Report, my noble friend Lady Faithfull expressed a serious concern and a hope that voluntary homes would not be used for secure accommodation. She also sought elucidation.
  My noble and learned friend the Lord Chancellor dealt fully with the arguments on the merits of Amendment No. 52 for which I sincerely thank him. He expressed sympathy. Therefore, with the constraints of time, it is hardly surprising that he did not provide the elucidation sought in connection with Amendment No. 208. No doubt that has been deferred until either later today or now when my noble and learned friend may be pleased to deal with it.
  Irrespective of a redraft of Amendment No. 52 being produced by the Government or the amendment proving acceptable to them—and the

  501
  matter is under active and serious consideration—or whether Clause 21 shall stand part on the assurance given to look into the question of secure accommodation, the amendments tabled by the noble Baroness, coupled with Amendment No. 208 dealing with the same point, raise a related question to Amendment No. 52 on secure accommodation. However, it is a wholly distinct question upon which the advice and assistance of my noble and learned friend is most respectfully sought.
  Clarification is sought at this stage hut, because I have spoken to Amendment No. 208 by leave I shall say that it is a probing amendment tabled in order to seek elucidation. My support for the amendments tabled by the noble Baroness, although wholehearted, is given at this stage—and I emphasise the words "at this stage"—in order that the position may be elucidated and a measure of assurance given.
  Lord Simon of Glaisdale: I should like to raise two points in connection with this and the related amendments. First, it is extremely inconvenient to discuss at the same time a number of amendments which are not directly dependent on each other.
  Earlier in Committee there was an example of the noble Lord, Lord Mottistone, moving an amendment and being satisfied that my noble and learned friend the Lord Chancellor had effectively answered it. I ventured to agree. However, the noble Baroness and my noble friends Lord Henderson of Brompton and Lord Seebohm had concentrated on another amendment which was not directly related. Three-quarters of the debate was given to dealing with that matter.
  When the Question was put it was understandable that the noble Lord, Lord Mottistone, should seek to withdraw his amendment, being satisfied that it had been effectively answered. However, the noble Baroness, Lady David, was not satisfied that her point had been met and therefore objected to withdrawal of the amendment.
  The result was that the amendment put to the House was that tabled by the noble Lord, Lord Mottistone. There was then the somewhat bizarre position where the noble Lord, obviously satisfied that the noble Baroness had been effectively answered, voted against his amendment. The amendment was defeated by only four votes.
  I venture to deprecate what the Committee has again done today. I doubt whether a vote will be taken on this occasion. In other words, we are discussing a number of amendments which are not directly and effectively related one to the other.
  The second point that I should like to make relates to Amendment No. 206C, tabled by the noble Baroness, Lady David. It is the amendment that has been directly moved and the one we are now discussing. The structure of this part of the schedule raises a matter which I have already pointed out to Members during Committee. Paragraph 7 provides that the Secretary of State may make regulations and gives him a general regulating power. It then states:
  "The regulations may, in particular".
  502
  They are particular examples of the general regulating power. Both are permissive. Paragraph 7(2) adds nothing to what has gone before. Although the noble Baroness made her point most effectively, if the amendment was carried it would have no effect because it is merely a permissive particularity of a generality, also permissive, which has gone before.
  At a later stage I shall seek to raise the point by way of formal amendment. However, I now venture to suggest that, even if it were accepted, the amendment tabled by the noble Baroness would have no practical effect owing to the structure of the paragraph.
  Lord Mottistone: I should like to intervene in order to clarify one matter because the noble and learned Lord, Lord Simon of Glaisdale, mentioned my earlier amendment. I do not believe that he has the position correct. On that occasion I tabled Amendment No. 102 and the noble Baroness, Lady David, tabled Amendment No. 101. She moved her amendment because it was the first in the grouping. At col. 137 of the Official Report I explained that I preferred her Amendment No. 101 and that we should forget about Amendment No. 102. However, at a later stage my noble and learned friend the Lord Chancellor to my mind made such a very good argument that I thought he had answered all the points which we had discussed. I said that at col. 145, and I was then referring to my Amendment No. 102 which I should not have moved if I had not already killed it—if Members of the Committee see what I mean. I said that it was not as good as Amendment No. 101, but I was trying to dissuade Members of the Committee opposite from pushing the matter to a Division because I thought that my noble and learned friend had answered the situation very well and that if they felt it right, it would be proper to come back to the matter at a later stage of the Bill.
  In the event, when the noble and learned Lord, Lord Simon of Glaisdale, asked her, the noble Baroness rightly said that the Division would take place on Amendment No. 101 which was nothing to do with me. I wanted to clarify that because I do not believe that the noble and learned Lord quite understood the point. I do not believe that it was wrong and I believe that everybody did the right thing.
  Lord Simon of Glaisdale: I never for a moment suggested that the noble Lord, Lord Mottistone, did the wrong thing. In fact, I believe that I said the opposite. In any event, even if I thought he had done the wrong thing, I should not say so to Members of the Committee.
  6 p.m.
  The Lord Chancellor: I believe that the question of which amendments one takes together is largely a matter of discretion. Sometimes one takes a larger group than one otherwise might have done in the hope of making particular progress because there are many important issues to be discussed. I believe that in this Committee we have sought to discuss issues and I have not troubled with the precise result in terms of drafting. I believe that the same is true of nearly all Members of the Committee who have taken part in the debates.

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  Therefore, while I entirely appreciate that there can be difficulty in taking groups which are not absolutely dependent on each other but raise the same principle, I believe that in this Committee it has been possible to do that without too much difficulty.
  As regards the second point raised by the noble and learned Lord, Lord Simon of Glaisdale, I agree with the view that the headings which we assign to regulation-making powers may not be strictly necessary. However, knowing the particular desire of the Members of the Committee to have an idea of what the Secretary of State has in mind for regulations and in order to keep the headings in question, we have put them in. I believe that they are useful in indicating the matters which are likely to be an issue in the view of the Committee at present. I agree that, strictly speaking, Amendment No. 206C of the noble Baroness would not be particularly effective, but if I were to accept it then I would do so in principle—and I hasten to add that I am not proposing to do that—with the view that it could be given effect to in some way, because we should not be in the business of accepting amendments which have no effect, although that could be forced on us by voting. However, I should not agree to that as a matter of deliberation.
  I propose to deal with the question of principle raised by Amendments Nos. 206C, 206D, 207A and 208. Paragraph 7 of Schedule 5 and Paragraph 10 of Schedule 6 deal with the power of the Secretary of State to make regulations governing the conduct of voluntary homes and registered children's homes. Sub-paragraphs (2)(f) and (2)(i) provide him with a particular power to make regulations requiring his approval for the provision and use of accommodation for the purpose of restricting the liberty of children in such homes, and enables him to impose other requirements regarding such placements. It follows that once the regulations are made, unless and until the Secretary of State gave his approval for such provision and use to be made, it would be unlawful to restrict the liberty of any child in a voluntary home or registered children's home.
  As the noble Baroness said, the Secretary of State has no present intention of granting his approval to the use of secure accommodation in voluntary homes or registered children's homes and thus the restriction of liberty of children in such homes will not be permitted on the basis of the Secretary of State's present intention. However, it was thought prudent in the Bill, for the reasons which I mentioned earlier; namely, that the Bill is intended to last a long time, to regulate the provision and use of such accommodation should circumstances change at some stage in the future.
  The effect of these amendments now before the Committee would be to remove this particular regulatory power and to replace it with a regulatory power to prohibit the use of secure accommodation completely. In other words, the Secretary of State would not have the flexibility to respond to changing circumstances if circumstances dictated that this was necessary and appropriate.
  The underlying suggestion is that it would be inappropriate for the voluntary sector or even the private homes sector to provide secure
  504
  accommodation. I believe that we should recognise—and I am sure Members of the Committee will agree—that a number of the national voluntary organisations have a long and proven track record of dealing with difficult and disturbed young people. I very clearly wish to dissociate myself from the idea that secure accommodation for children is in any sense a prison or has any connotation of that sort. The whole emphasis of the secure accommodation provision is to protect the child against injury.
  I entirely agree that the Secretary of State has no present intention of granting the power to add secure accommodation to any of these groups; namely, voluntary homes or registered children's homes. However, in principle I cannot see why, subject to the proper safeguards, in this manner a voluntary organisation should not be able to protect a child against himself. I cannot see why the mere fact that the organisation is voluntary makes it impossible for the organisation satisfactorily to provide that help to the child if it should be necessary. As I say, we have no present intention of doing so, but as a matter of principle I cannot see why it can be said that in no circumstances whatever that anyone can foresee would it ever be right to allow a national voluntary organisation, however long and distinguished its record, which saw the need for it, to make that provision.
  Lord Elwyn-Jones: Can the noble and learned Lord give an indication as to what sort of change of circumstances he contemplates will justify a departure from the basic view that these voluntary homes should not be used to deprive children of their liberty and otherwise submit them to a form, at any rate, of imprisonment?
  The Lord Chancellor: I cannot see any reason why a voluntary organisation with great standing would not be at least as good as other organisations in looking after disturbed children who needed that form of protection against themselves. I cannot see why the mere fact that the organisation is non-voluntary should make it better in that respect.
  These amendments hinge on what I recognise is an important point of principle; namely, whether or not voluntary homes or registered children's homes should have the ability to restrict the liberty of residents under any circumstances. To the extent that the Secretary of State has no present intention to exercise his power of approval under sub-paragraphs (2)(f) and (2)(i), I do not think there is anything between us. The Government do, however, take the view that it would be sensible not to close the door completely on this possibility.
  Members of the Committee know the characteristics which are required to be taken into account and satisfied in imposing that particular form of help for a young person. I cannot see any reason to be certain that in no circumstances whatever would that reason arise in respect of the child who happens to be looked after by a voluntary organisation. This would impose in all circumstances a duty to move the child out of that place altogether for what might be only a short time, perhaps until its condition is resolved, into

  505
  another place simply for the purpose of restricting its liberty for its own protection.
  Paragraphs (2)(f) and 2(i) therefore give the Secretary of State the ability to exercise his power, if he thought it appropriate and necessary, at some stage in the future to give approval for use of such accommodation, applying—this is important—the same strict standards that he currently sets for the provision and use of secure accommodation provided by local authorities. Amendment No. 52 of my noble friend Lord Campbell of Alloway is, as I understand it, designed to provide a regime that would apply to any form of secure accommodation, wherever it was. That is the purpose behind the amendment.
  With that explanation, I hope that the noble Baroness will feel able to withdraw the amendment.
  Lord Campbell of Alloway: Before my noble and learned friend sits down, perhaps I may thank him for that clarification and for accepting the rectitude of speaking to Amendment No. 208 in this context.
  However, I ask whether it does not come to this. The Government are seeking reserve powers in order not to close the doors on a possible situation, there being no present intention to implement those powers. For my part, I do not see the justification for conferring wide powers of this nature in relation to secure accommodation. If the Secretary of State wishes to use powers on some future occasion, in circumstances which no one has been able to explain or envisage, is it not right—I speak on a question of principle—that the Secretary of State should then return to Parliament to explain the circumstances, justify his use of the powers, and then no doubt have the consent of Parliament? Surely it is wrong that it should be pre-empted by the grant of reserve powers which there is no present intention to use.
  Baroness Faithfull: We are in some difficulty here. My noble and learned friend said that it is the intention that voluntary homes should not be used for secure accommodation. However, there is justification when a child perhaps becomes seriously epileptic or is in similar great difficulty and one does not want to move the child away from the home but it is necessary to put him in secure accommodation. That may be necessary for only a short time; perhaps a week, three weeks or a month.
  It is a question of time. If one can never use secure accommodation in a voluntary home one might damage a child by moving him. Therefore, it is also a question of whether the secure accommodation is registered or whether it is possible, on certain occasions in difficult circumstances, to use a room for the purpose. I give an example. I know of a voluntary home where a child had gone home for the weekend and returned having murdered his mother. It was felt that the child should be in secure accommodation. That home allocated a single room as secure accommodation for the child for the difficult time that the child was going through. The child slept in that room accompanied by a member of the staff.
  The whole matter comes down to the definition of secure accommodation and whether in certain circumstances it would be possible to use a voluntary
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  children's home as secure accommodation in the interests of the child.
  6.15 p.m.
  Lord Simon of Glaisdale: Before the noble Baroness deals with the substance of the matter, perhaps I may deal with the argument put forward by my noble and learned friend the Lord Chancellor. On the point I made he said that he agreed in principle that sub-paragraph (2), being connected with sub-paragraph (1) and both being in permissive terms, is strictly speaking unnecessary. However, my noble and learned friend said that he thinks it may be advantageous for Parliament to know what the Secretary of State intended to do in the regulations.
  Two points must be made on that. First, the argument would be valid only if the Secretary of State's regulating power were to be made mandatory. Members of the Committee might then want to know what sort of regulations he intended to make. But the argument simply will not wash when the powers are permissive. Secondly, this formula—a permissive, general regulatory-making power followed by particulars of what he might do—occurs at least three times in the Bill. The equivalent of sub-paragraph (2), which takes up over half a page of the statute book, occurs at equal length in the other instances.
  My noble and learned friend Lord. Hailsham referred at an earlier sitting to the inflation of the statute book and I ventured to second that exposition at a later sitting. The fact is that in the 10 years after the Renton Committee reported the statute book ran to six volumes—double what it was in the year after the Renton Committee reported, though there were fewer general and public Acts. We had simply become, adapting Disraeli's words, inebriated with the exuberance of our own verbosity. If we can—we can easily do it—strike out one and a half pages without making a pennyworth of difference to what is enacted, surely that is what we should do.
  The Lord Chancellor: Strictly speaking, that proposal is not the subject of any of these amendments. I know that the noble and learned Lord is well aware of that because he spoke of tabling an amendment at a later stage. I do not go along with the view that this makes no difference at all. It is important in its context. However, perhaps the noble and learned Lord will allow me to leave that matter until he puts it forward by way of an amendment.
  My noble friend Lord Campbell of Alloway suggested that this is a reserve power and that parliamentary time could be taken up, if the circumstances arise, to ask for it to be granted. My noble friend Lady Faithfull, with her great experience in these matters, gave an example of the type which I was seeking to describe in general terms where a child who is in the care of a voluntary home requires secure accommodation for his own protection.
  I can see that in some situations to move the child away from the home and put him in a local authority home would be an additional and unnecessary trauma. One hopes that the time for which he would require it would not be very long and that matters might return to normal. As long as the regulations are adequate and the controls sufficiently precise, I

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  cannot see that the mere fact that the home is a voluntary one or a registered children's home, makes it inappropriate for granting secure accommodation. I do not understand that as a matter of principle. Therefore I believe it is right that the Secretary of State should have this power. As my noble friend said, it may he that at the moment that is possible and that the Secretary of State would require power to regulate it in order to prevent such a situation. That is what he proposes to do, as the noble Baroness knows from what the officials of the Secretary of State have told those who were giving her information.
  On the basic principle of the matter I do not see that it is right to make this fundamental distinction. For that reason I hope that the noble Baroness will feel able to withdraw her amendment. I am very grateful to my noble friend Lady Faithful] for giving a particular example that I am sure all of us will reflect upon in considering the matter.
  Baroness David: This amendment has certainly provoked considerable discussion. I believe that it is an important matter. The Government have had a change of heart about it. They were not intending to allow these homes, and I know that they are not actually saying that they intend to do so now. They are keeping that possibility. However, they did say fairly firmly that they were going to prohibit the locking up of children in voluntary homes. That seems to be a situation that has changed. We have not had a good reason for the change of heart.
  The noble and learned Lord was speaking about protecting children from themselves and that it was for their own sakes that they needed to be in secure accommodation. Many of the people who have to deal with children in such homes believe that if there is secure accommodation there it is likely to be used. As regards the example given by the noble Baroness, Lady Faithfull, quite clearly a voluntary home did manage to look after the child in a secure way though the home did not have approved secure accommodation. It may be that that can be done.
  I cannot say that I have been satisfied with the answers I have received. The noble and learned Lord, Lord Simon of Glaisdale, has raised the point about this matter being permissive anyway. I must take back this amendment and look at it again. I certainly believe that I shall have to return. I had the support of the noble Lord, Lord Campbell of Alloway, for which I am very grateful. I believe it is a matter upon which many of us feel quite strongly. I shall probably come back with perhaps a slightly different amendment, possibly at a different stage of the Bill, or to amend the main part, namely, that "the Secretary of State may". I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 206D not moved.]
  Schedule 5 agreed to.
  Clause 54 [Children not to he cared for and accommodated in unregistered children's homes]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 206E:
  Page 48, line 19, leave out ("provided under section 44").
  The noble and learned Lord said: In moving this amendment I also speak to Amendment No. 253A. These amendments are designed to improve the drafting of the Bill. Clause 54(6)(a) currently refers to a
  "community home provided under Section 44"
  because the interpretation clause does not contain a definition of a "community home". We are seeking to insert a definition at Clause 77(1) and to delete the words "provided under Section 44" in Clause 54(6). To do so is consistent with the general approach taken throughout the Bill. I beg to move.
  On Question, amendment agreed to.
  Clause 54, as amended, agreed to.
  Clause 55 [Welfare of children in children's homes]:
  [Amendment No. 206F not moved.]
  Clause 55 agreed to.
  Clause 56 [Persons disqualified from carrying on, or being employed in, registered homes]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 206G:
  Page 50, line 12, at end insert—
  ("(2A) Where an authority refuse to give their consent under this section, they shall inform the applicant by a written notice which states—

  (a) the reason for the refusal;

  (b) the applicant's right to appeal against the refusal to a Registered Homes Tribunal under paragraph 8 of Schedule 6; and

  (c) the time within which he may do so.").

  The noble and learned Lord said: This amendment is put forward in pursuance of an attempt to replace with various amendments the currently unimplemented Children's Homes Act 1982. At the same time we are seeking to align various aspects of this Bill. In Clause 56 we are aligning new provisions on the disqualification of persons from carrying on a registered children's home with disqualifications in respect of private fostering. These are relatively severe restrictions and it is appropriate therefore that, whenever a person is refused consent by the local authority, he should be able to appeal against that decision just as a prospective private foster parent is able to appeal against such refusal under paragraph 8 of Schedule 7. In the case of a registered children's home the appeal will lie to a registered homes tribunal, which has a general power to hear appeals from local authority decisions regarding registration and imposition of conditions on the running of children's homes.
  This amendment completes the picture by requiring that where a local authority refuses to give its consent it must notify the applicant of the refusal and of his rights in respect of an appeal to the tribunal. Again this corresponds with the local

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  authority's responsibility in respect of persons disqualified from private fostering in Clause 59(4).
  The drafting follows Clause 59(4) almost exactly. We merely wish to ensure that the applicant is made aware of those decisions and rights of appeal that affect him. I beg to move.
  On Question, amendment agreed to.
  Clause 56, as amended, agreed to.
  Schedule 6 [Registered Children's Homes]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 207:
  Page 104, line 32, leave out ("placement") and insert ("placing").
  The noble and learned Lord said: This amendment brings the drafting of the regulation-making powers in respect of registered children's homes into line with those for community homes and voluntary homes by substituting the word "placing" for "placement". I beg to move.
  On Question, amendment agreed to.
  [Amendment No. 207A not moved.]
  Lord Campbell of Alloway Lord Campbell of Alloway had given notice of his intention to move Amendment No. 208:
  Page 105, leave out lines 3 to 8.
  The noble Lord said: My noble and learned friend has been good enough to acknowledge the relationship between this amendment and Amendment No. 52 which is under active consideration by my noble and learned friend with his advisers. In those circumstances I do not move the amendment.
  [Amendment No. 208 not moved.]
  Schedule 6 agreed to.
  Clause 57 [Privately, fostered children]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 208A:
  Page 50, line 29, at end insert ("and").
  The noble and learned Lord said: Amendments Nos. 208A and 208B and the amendment proposed by the noble Lord, Lord Kilbracken, Amendment No. 254, have the same objective; that is, to avoid the duplication of definitions within the Bill. This is a feature of the Bill that we have attempted to maintain. The noble Lord, Lord Kilbracken, clearly approves of our efforts in this regard. The only difference between these amendments is that the first couple would leave the definition of "relative" in the interpretation clause, that is Clause 77, whereas Amendment No. 254 would have the definition located in Clause 57. I prefer to see the definition in the interpretation clause. I therefore invite the Committee to approve Amendments No. 208A and 208B.
  On Question, amendment agreed to.
  The Deputy Chairman of Committees (Lord Cullen of Ashbourne): I should point out that if Amendment No. 208B is agreed to I cannot call Amendment No. 209.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 208B:
  Page 50, line 32, leave out from ("section") to end of line 35.
  The noble and learned Lord said: I have already explained the amendment. I beg to move.
  On Question, amendment agreed to.
  6.30 p.m.
  Lord Prys-Davies Lord Prys-Davies moved Amendment No. 209AZA:
  Page 50, leave out lines 38 and 39 and insert ("does not intend to do so for more than 28 days from the start of the child being placed.").
  The noble Lord said: I should like to speak in a little detail about the background to this amendment and also to the amendments grouped with it. The amendments are supported by the Save the Children Fund and are based on the experience and advice tendered by the African Family Advisory Service which is closely linked to the Save the Children Fund and is concerned with issues affecting West African families and their children in the United Kingdom. The Committee may wonder why I rely so much on the African Family Advisory Service. It advises that 80 per cent. to 90 per cent. of the children who are placed in private foster care in England and Wales are of West African parents. I was truly amazed when given this figure but I have double-checked that my information is correct.
  It is estimated that there are about 2,300 West African children in foster homes in England and Wales. The figure is almost certainly a significant under-estimate as it is based on notification to the local authorities. The notification is very imperfect indeed. It is interesting that a magazine which contains a regular "homes wanted" column advertised for homes for 497 West African children in 1985–86. The number had increased to 614 in 1986–87 and reached 819 in 1987–88. The number is increasing at a substantial rate. The figures provide a significant guide to the trend.
  Last October and November the African Family Advisory Service conducted a survey into the practice of known private fostering in three local authorities in England. They have not been named; we cannot identify the children involved. However, the information is in the knowledge of the Department of Social Security. Six main findings emerge from the survey.
  First, the number of arrangements of which the local authorities were notified under-estimate the true position. This means that the figures I gave earlier are an under-estimate. Secondly, agents were operating in the areas of the three local authorities to recruit local families as foster parents and to privately foster West African children for a fee. I understand that the payment to the foster parents is about £10 to £20 a week.
  Thirdly, these placements, rapidly made, are terminated with equal rapidity, with little regard to the children's needs either before placement or at the termination of placement. Fourthly, foster parents have scant details of either the children's or the parents' background, medical histories or where the parents live. It is often the case that the parents have returned to West Africa.
  Fifthly, foster parents do not give adequate notice of their intention to receive children into care. The authorities have little or no control over the flow of private foster children into their areas and are faced—these are the words used by the African Family Advisory Service—with "an uphill struggle" to maintain tabs on the children. I shall return to the words "an uphill struggle" later. Finally, all three authorities have received West African children into care as a direct result of inappropriate private fostering arrangements. What emerges is worrying. It is certainly a very grey area.
  Against that background and drawing on their experience the African Family Advisory Service and the Save the Children Fund consider that Part IX of the Bill should be amended along the lines proposed in the amendments. We do not say that the wording of the amendments is perfect but we believe that the Bill should be amended along the lines set out. Advantage should be taken of the Bill to tighten up the legal requirements.
  The purpose of Amendment No. 209AZA is clearly to distinguish between potentially long-term private fostering placements and those arranged for short-term periods by parents who have to make emergency placements for their children. However, as Clause 57(2) stands, the duties imposed by the Bill, including the important duty set out in Clause 58, do not come into play until a child has been maintained and cared for by a foster parent for a period of 28 days. Why should there be a gap of 28 days before the duties come into play?
  One appreciates that paragraph 6 of Schedule 7 confers certain rights on the local authorities in relation to a proposal. The snag is that the local authority may not be aware of the proposal. Where the parties intend and have agreed that the fostering is to be long term, the duty under Clause 58 should apply on the first day of the fostering and not as and from the 28th day. This means that a notification of intention to foster should precede the first day of fostering. It would give the social services department an opportunity to undertake inquiries which could reveal that the placement might be inappropriate.
  Amendment No. 209BZA recognises the crucial importance of prior notification of the proposal to the local authority by both the parents and the person proposing to foster the child. It is submitted that notification should be seen as a crucial stage in the private fostering procedure. Under the Bill, notification may be specified in the regulations which may be made under paragraph 7 of Schedule 7. The noble and learned Lord, Lord Simon of Glaisdale, has already complained about this formula relied upon in the Bill.
  Notification is so vital that the Bill should be specific and clear about it. The Bill is less satisfactory than Section 7 of the Foster Children Act 1980 on the issue of notification. I mentioned earlier that the authorities have said that they face an uphill struggle when keeping tabs on foster children coming into their care. They need assistance. We believe, and so do the two organisations which is more important, that they can probably best be helped by placing in the Bill an effective notification machinery. We hope that the Government will reconsider that position.
  Amendment No. 209BZA places two new duties on local authorities. First, there is a duty on a local authority to make inquiries of the local authority of the child's home area. Secondly, there is a duty to obtain a medical report from the child's doctor. The first duty should help authorities to seek greater control over the movement of prospective foster children into their own area so that they can prohibit the placement where they are satisfied that it is inappropriate. I accept that the need for a medical report is touched upon, by implication, in paragraph 6(1)(c) of Schedule 7. However, bearing in mind that a small number of West African children in private foster care are known to have died in 1988 due to their medical records not being transferred, local authorities should have the right, and be under a duty, to call for medical reports from the child's doctor.
  Amendment No. 211AZA specifies the information which should be contained in the notice to the local authority. The list is obviously not exhaustive. It is the minimum information required by authorities if they are effectively to discharge their duty to the children. The regulations should be specific on the need for that data.
  The reason for Amendment No. 209CZA is that it enables a local authority to have a statutory obligation towards children placed in long-term foster care. It will facilitate the duty of every local authority, as outlined in Clause 58(2)(a).
  I appreciate that I have taken a substantial part of the Committee's time in introducing the amendments, but in the light of the information that we have received we believe that this is a grey area. It reveals a problem and the Bill as drawn does not address itself to that problem. I beg to move.
  Baroness Faithfull: The amendment so well described by the noble Lord, Lord Prys-Davies, illustrates a tremendous problem. Perhaps I may ask him two questions. First, if relatives take a child for money, does he presume that those relatives are foster parents? Secondly, what happens in an emergency? For example, a woman may be rushed into hospital and the father may place the child with someone until the next morning. Does he believe that his amendment covers those two point?
  Lord Prys-Davies: Will the noble Baroness please repeat the first point?
  Baroness Faithfull: If the parents, or a parent, place a child with relatives and pay them, does the noble Lord presume that they are foster parents?
  Lord Prys-Davies: I was under the impression that as regards the first question, the relatives would be exempt by virtue of the provisions of the Bill. As regards the second question, I meant to make it clear that emergency fostering, such as the noble Baroness had in mind, would be excluded from the provisions of the amendment.
  6.45 p.m.
  The Lord Chancellor: The noble Lord has explained a complicated amendment in an amazingly

  513
  short time. I shall do my best to emulate his good example. Perhaps I may take Amendment No 209AZA first. I believe that it is the first in the series. There may be some misunderstanding here because I believe that the noble Lord's amendment will reduce the protection instead of increase it, because the definition in Clause 57(2) provides:
  "A child is not a privately fostered child if the person caring for and accommodating him—

  (a) has done so for a period of less than 28 days; and

  (b) does not intend to do so for any longer period".

  It is an exclusion. A child is a privately fostered child unless those two conditions are satisfied. I shall give an example of where it might be different. Let us suppose that the child is kept for 30 days, but the intention was to keep it for 20 days. Under the noble Lord's amendment it would not be privately fostered, but it would under our provision. If the intention is not borne out; in other words, if the child is kept longer than the 28-day period, the child becomes privately fostered under our definition but not under the noble Lord's. The noble Lord might like to look at this matter again. There is not much between us on principle, but the drafting of his amendment does not result in protection if the child is there for longer than 28 days. We have said that if that happens it does not matter what the intention was, the child is taken to be privately fostered. I shall not take more time on that point.
  Amendments Nos. 209BZA, 209CZA and 211 relate to a complicated subject. The circumstances must be taken into account. As the noble Lord has explained, he relies on his illustration of West African children. I agree that the situation he described must he catered for. The target is to some extent a moving one, and so we believe that the most appropriate and effective way to regulate the matter is by regulations made under the powers contained in Clause 58 and paragraph 7 of Schedule 7. As regards notification, those powers go beyond the requirements which the amendments would insert on to the face of the Bill. For example, notification should be required not only from parents and prospective foster parents but from any third parties who may be involved in arranging a private placement.
  As to the form of the notice, I have no doubt that all the items of information set out in the amendment will be required by the local authority. When we come to draft regulations, we may find other matters which should also be considered. What is required in the notification may, as a result of changing practices, need to he developed. Similarly, I believe that the regulations under Clause 58, taken together with the provisions of Clause 60, offer a more appropriate and flexible vehicle for the most comprehensive and effective safeguards for children that we are seeking to achieve. The requirements and safeguards which have been set out in the amendment are among those we shall consider when makng the regulations under Clause 58 and Schedule 7, as we intend to do as part of the overall implementation of the Bill.
  I am not sure whether the noble Lord intended to cover Amendment No. 211BZA. I think perhaps he did. It is consequential upon Amendment 209BZA. It may be unnecessary given that there is provision in Clause 60 for a local authority to prohibit a person
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  from fostering and there is a right of appeal in paragraph 8 of Schedule 7 against such a prohibition. So I think that the noble Lord may take it that we have very much the same objectives in view, and that the regulation-making powers will have the effect of allowing regulations to be made which would cover the concerns which he has so clearly expressed.
  Lord Prys-Davies: I am grateful for the response of the noble and learned Lord the Lord Chancellor and for its tenor. Basically we seek a common objective and I think it is now for those who have consulted us to consider very carefully the points made by the noble and learned Lord. We shall then decide whether we should come back on this amendment or a variation of it. I am particularly grateful that the Lord Chancellor has in mind that the regulations to be made under the Bill will cover most of the matters which we have mentioned on these Amendments. As I said, on the face of it this could be a common area so we shall consult and possibly come back to your Lordships at a later stage. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 57, as amended, agreed to.
  [Amendment No. 209BZA not moved.]
  [Amendment No. 209CZA not moved.]
  Clause 58 [Welfare of privately fostered children]:
  Lord Mottistone Lord Mottistone moved Amendment No. 209ZA:
  Page 51, leave out line 12.
  The noble Lord said: This is a small amendment which seeks to reduce the amount of verbiage in the Bill. It seeks to leave out sub-paragraph (a)(i) of subsection (2), because it is believed that subsection (2)(a)(ii) and (2)(b) make sufficient provision to ensure that visits by a local authority officer are made on specified occasions and that the Secretary of State can regulate the functions in this area. In those circumstances, there appears to be no need to include provision for prescribed services as set out in subsection (2)(a)(i). The need to maintain privacy and to ensure that the family is not inconvenienced also seems to be amply covered. After all that, the clause as it stands appears to be too restrictive. I hope my noble and learned friend will feel that in this case he can agree to this rather small amendment. I beg to move.
  The Lord Chancellor: The idea of this amendment is to provide for the regulations to deal with, for example, something happening which would require a visit within the prescribed time limits and the normal provisions would operate to require regular visiting. But something might happen. For example, a complaint might be made from some independent source or there might be an accident to the child which would make it desirable that a visit should take place. So the idea is to give power in regulations to require a visit determined not by time but by circumstances of which those are illustrations. There might be better illustrations, but those occur to me. So we are anxious to keep this provision. It is an important matter. It is important that we should have the opportunity to visit as a result of something happening, such as an accident.
  Lord Mottistone: I thank my noble and learned friend for that explanation. I think that I am convinced, but in the event that we are not collectively convinced on my side we might come back at a later stage. At this stage, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 209A:
  Page 51, line 18, leave out from ("that") to ("and") in line 21 and insert—
  ("—

  (a) any privately fostered child is being accommodated in premises within the authority's area; or

  (b) it is proposed to accommodate any such child in any such premises,

  he may at any reasonable time inspect those premises").
  The noble and learned Lord said: I should like to move Amendment No. 209A and speak to Amendment No. 209B. The first of these amendments redrafts the power of a person authorised by the local authority under Clause 58 to inspect premises in which a private foster child is, or is proposed to be, accommodated. The power is drafted in the amendment to reflect more appropriately the requirement under paragraph 7 of Schedule 7 that persons keeping, or proposing to keep, a private foster child should inform the local authority. The references in Clause 58 to premises where a child "is likely to be" kept are therefore replaced with premises where "it is proposed to accommodate" such a child. Further references to the inspection of any part of the premises are removed by this amendment, as they are thought misleading and are not incorporated into other inspection powers in the Bill.
  The second amendment redefines the offence in Clause 61(1) which relates to obstruction of a person exercising power under Clause 58(3) in line with the other offences of obstruction of powers of entry laid down in the Bill. I beg to move.
  On Question, amendment agreed to.
  Clause 58, as amended, agreed to.
  Clauses 59 and 60 agreed to.
  Clause 61 [Offences]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 209B:
  Page 53, line 35, leave out from ("authority") to end of line 36 and insert—
  ("—
  (bb) he intentionally obstructs another in the exercise of the power conferrerd by section 58(3);".
  The noble and learned Lord said: I have spoken to this amendment. I beg to move.
  On Question, amendment agreed to.
  Clause 61, as amended, agreed to.
  Schedule 7 [Privately Fostered Children]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 210:
  Page 105, line 33, leave out ("or paragraph 4").
  The noble and learned Lord said: This is merely a drafting amendment which I am prepared to explain more fully if necessary. In the meantime, I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 211:
  Page 106, line 5, leave out from ("child") to end of line 6.
  The noble and learned Lord said: This amendment removes from paragraph 5 of Schedule 7 the definition of "protected child". It is unnecessary to define this as the interpretation provision in Clause 77 already provides a meaning for the word. I beg to move.
  On Question, amendment agreed to.
  [Amendments Nos. 211AZA and 211BZA not moved.]
  Schedule 7, as amended, agreed to.
  The Deputy Chairman of Committees (Lord Cullen of Ashbourne): The next amendment is Amendment No. 211ZA.
  The Lord Chancellor: I think that this amendment will probably take some time, because it is an important one. So it may be that this is an appropriate time to see whether we can gain some refreshment before we embark on it.
  The Earl of Dundee: In view of that very encouraging advice by my noble and learned friend, I beg to move that the Committee stage be adjourned and we shall begin again at 8 o'clock.
  Moved accordingly, and, on Question, Motion agreed to.
  [The Sitting was suspended from 6.58 to 8 p.m.]
  Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 211ZA:
  Before Clause 62, insert the following new clause:
  ("Review and annual report.
  .—(1) The Secretary of State shall, in consultation with the local authority associations, the Central Council for Education and Training in Social Work and such other bodies or persons as may appear to him to he appropriate, maintain under review the sufficiency of the number of social workers appropriate for the due discharge of their statutory duties affecting the welfare of children and families and all aspects of recruitment and training of social workers concerned with such duties.
  (2) The Secretary of State shall lay before Parliament an annual report as to the state of the review referred to in subsection (1) above.").
  The noble Lord said: Since this amendment was tabled it has gathered support from the noble Baroness, Lady David, and the noble Lords, Lord Seebohm and Lord Henderson of Brompton, whose names appear on the Marshalled List. It also has the support of my noble friend Lady Faithfull. If it were acceptable to the Committee, it would stand in the stead of Amendment No. 213, which it is understood may not be acceptable to my noble and learned friend the Lord Chancellor in its present form.
  On Second Reading it was common ground that adequate training of social workers in their duties affecting the welfare of children and

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  families—aspects of this Bill—could not work satisfactorily according to the intendment of the Bill without adequate provision for training. The amendment is self-explanatory. As time is short, perhaps I may take it as read.
  The hope must be that the common concern as reflected, in the amendment is acceptable to the Committee and also that it will be acceptable to my noble and learned friend. I think my noble and learned friend would agree with me that in this area the question is not whether something should be done but whether the means proposed are available; in other words, what should be done; and whether, as proposed by this amendment, the Secretary of State should be enjoined to discharge a mandatory duty of constant review and to make an annual report to Parliament.
  This amendment differs in material respects from Amendment No. 213. First, it is not in conflict with any provision of the Bill but is in implementation of it. Secondly, its incidence is limited to the discharge of statutory duties by social workers to implement the Bill, though some such duties may derive from other statutes. Thirdly, it does not impinge upon any financial privilege of another place as requiring any general or specific allocation of funds. This is left to the subsequent dispensation of Parliament in the light of recommendations made in the annual report.
  Furthermore, it leaves the conduct of the review within the statutory requirements proposed to the unfettered discretion of the Secretary of State. In addition, it excludes the many duties of social workers which do not affect the welfare of children and families. Those are excluded because, first, the discharge of such duties is beyond the scope of the Bill; and, secondly, their discharge has given no occasion for public concern. It is only the discharge of the duties affecting children and families which has given rise to public concern. Lastly, it provides a system of control; and I stress the need for a regime which has within it the element of control apart from the question of public concern.
  The legal framework of the Bill cannot work satisfactorily unless there is a sufficiency of numbers and recruitment and training of social workers in their duties affecting the welfare of children and families are kept under constant review and an annual report is made to Parliament.
  If those steps as proposed are not acceptable, what other steps should be taken to control, to ensure that our own regime operates satisfactorily? The continuing review proposed enjoins consultation on a very broad base. It is suggested that this is absolutely essential as many of the problems interact. To give but one example, sufficiency of numbers is related to pay, careers structures and terms of employment as affecting recruitment. Length of training is related to content and quality of instruction and the aptitude, intelligence and experience of the trainee. That is why consultation, constant review and a measure of control are requisite.
  Representations may be made to the Secretary of State, and recommendations by the Secretary of
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  State—which may well have financial implications if acted upon—may be made by him in his annual report to Parliament.
  In conclusion, it is accepted in Part X of the Bill—Clauses 62 to 65—that the Secretary of State has certain supervisory functions and responsibilities which he may discharge as a matter of discretion should the occasion arise to exercise those functions. But there is no reference whatever to the subject matter of this crucial amendment. The occasion to exercise such functions arose a long time ago, is extant today, and will continue to arise: hence the justification for a mandatory provision as distinct from a discretionary provision so as to ensure that a matter of public concern, of fundamental consequence to the practical implementation of aspects of this Bill, is brought into control in the public domain, no more and no less, by publication of an annual report and by parliamentary scrutiny.
  I move this amendment as a matter of principle. I await noble Lords' contributions with considerable interest. I beg to move.
  Lord Seebohm: I shall not speak for long—I never do—but I think I have the authority to speak on this matter. In 1961, nearly 28 years ago, I was a founder member of the National Institute for Social Work, concerned with training. This was formed as a result of the Younghusband Report. There was a massive report on social work training showing the inadequacies of the work at the time.
  For the first two or three years we spent our entire facilities on retraining experience for completely unqualified social workers. It sounds as if the major task was completed in three years. We did not quite complete it, but the numbers in those days were very small. In 1968 a report bearing my name was produced which also had quite a long chapter on training, deploring the state of training that still existed at that period after 1961. In those days there were under 10,000 social workers in the field. I think the number was something like 8,700, if hospital workers were included. Today there are approximately 30,000 to 32,000 social workers in the field. The situation is very difficult to quantify for the simple reason that one cannot define what a social worker is nowadays; there are all sorts of grades with different duties. But the number is something like three to four times what it was in 1968. More training is necessary. I doubt whether it has progressed very far since 1968.
  One of the recommendations of the Seebohm Report was that there should be a central council, which in due course became the Central Council for Education and Training in Social Work, to oversee and promote the training of social workers. To my mind it has been deplorably ineffective, until recently, when a new director, Mr. Tony Hall, was appointed. He produced a vigorous report recommending a third year over the small basic two-year training which exists at the present time. This recommendation was turned down by the Government and we have yet to see an adequate answer to his report.
  I do not believe that three consecutive years was the answer. I personally have talked to a number of

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  social workers and to directors of social services on this point in recent months. The general conclusion that I make is that there should probably be up to a year of in-service, on the job training under careful supervision so that one becomes quite acquainted with the normal work of the social worker; but training after that is badly needed in a number of specialities. The most important one is that of children. I have no doubt about that in my mind at all. Quite apart from child abuse and sexual abuse which we hear so much about now and the Butler-Sloss Report, there are battered children—not only babies—and all sorts of problems with children who are mentally ill and mentally handicapped.
  These are all specialisms which must be taught in a quite sophisticated and proper manner. I do not know whether any plans for this could be made yet but I think it is absolutely essential if we are to meet the requirements of this Bill. That is my point. We are loading social workers with yet other responsibilities under the Bill, which is a very important Bill. There are already over 90 statutes about which social workers have to know in order to perform their duties now, and then there is the Bill. So we cannot leave the situation vague and say that we must have more training. Something specific must be done. I think that if this is not the right amendment then it shows the right way to see that this takes place. That is all I wish to say; it is an urgent and very important matter.
  8.15 p.m.
  Baroness Faithfull: Unlike the noble Lord, Lord Seebohm, I do not propose to be brief. I hope that your Lordships will forgive me if I speak at some great length. If I may, I shall speak to my Amendment No. 213 which concerns the training of personnel in the social services and probation departments. The amendment moved by my noble friend Lord Campbell of Alloway is wider than Amendment No. 213 but the spirit and intentions behind both our amendments are the same.
  Lord Justice Butler-Sloss said:
  "The weight given to the training of social workers is of central importance to this Bill. Indeed, when this Bill becomes law it will only be as good as the people who carry it out.".
  That is a solemn thought. I submit that the training of those working in the social services, as the noble Lord, Lord Seebohm, has said, has been inadequate to the task. I refer to those who work in a residential and day care setting as well as in the field social work setting. Further, I should say that there are not enough personnel in the social services to meet the statutory duties which Parliament has laid upon them. Winston Churchill once said, "Learn from history". Perhaps I may briefly give some facts concerning the background. Before 1970—and the noble Lord, Lord Seebohm, will know about this—those seeking to carry out field social work usually obtained a two-year training in basic social work. This was followed either immediately or after some practical experience by a post-qualifying course. The training programme for child care was organised from the Home Office, as was the training for probation officers.
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  The training for the welfare needs of the elderly, handicapped and the mentally ill was organised from the Ministry of Health and various universities ran psychiatric social worker courses, as did the Tavistock Clinic. Later this separate post-qualifying training came under the aegis of the newly appointed Council for Education and Training in Social Work. For some reason which I never quite understood—but I have an uncomfortable feeling that it was financial—the basic separate post-qualifying courses were telescoped into one year, whereas before there had been a basic training of two years and then a post-qualifying course.
  Some years ago in your Lordships' House I moved an amendment to the effect that training for social work should be mandatory. This had overwhelming support in your Lordships' House but, alas! our decision was reversed in the other place. In the light of Cleveland and of the tragic cases of Jasmine Beckford, Kimberly Carlile, Tyra Henry and now the Southwark case, we were conscious of the fact—and it was stated in all these reports—that the training of social workers was inadequate. Have not we at Westminster been penny-wise and pound-foolish in more ways than one?
  Judges have told me of the lack of knowledge of court procedure shown by some social workers. This is not surprising, as I think the noble Lord, Lord Seebohm, said that there were 90 relevant Acts of Parliament. I counted up—obviously my count cannot be very good—and I made it 88 Acts of Parliament relating to social work and court work. Fifty-nine of these Acts directly involve the responsibility of the social services and those 59 Acts of Parliament have been passed since 1972.
  Members of the Magistrates' Association have paid tribute to the work of social workers but consider that to carry out their duties they have a right to a better training which will suit them to the work they have to do.
  If, as is recommended in the Cleveland report, there is to be closer collaboration between those working in the area of child protection, then the social workers must be skilled in their own spheres in order to work with colleagues from the other relevant professions, particularly as the social worker is often the key worker in child protection cases and the one who is usually responsible for taking a case to court.
  The Council for Education and Training of Social Workers, as has been stated by the noble Lord, Lord Seebohm, recommended a three-year course which would have had the advantage of the social workers starting one year older than after two years. It must be remembered that 24 per cent. of newly-qualified staff are at the moment dealing with child protection cases. Furthermore, that provision would be less costly to local government, but it did not receive the approval of Her Majesty's Government.
  However, Her Majesty's Government, the Social Work Inspectorate and the administration in the Department of Health, are to be congratulated. First, they recommended a basic two-year course for all social workers. Secondly, they have set up a working party to look into and make recommendations on post-qualifying training. Thirdly, there has been

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  recognition of the need for training officers in social work departments to organise the practical training of social workers within the departments. Such workers would keep in close touch with the academic world—that is, the universities and the polytechnics.
  Already £8 million has been given for this purpose, but I suggest that between all the authorities in England and Wales that is not enough. We congratulate the Department of Health for these three positive contributions towards better training, but there is a worrying "but": I am given to understand that the post-qualifying course will not be available to all those social workers opting for child care. It is further a matter for concern that the course is likely to he only a short one. One hopes that the working party will look at the Goldsmith's College course which combined academic training on the emotional and psychological health and educational needs of children with sound practical training.
  I have questioned whether £8 million is enough to set up training units for practical work. In the probation service there are 19 training units in 16 areas. If training units cannot be set up, well-trained senior social workers should be placed in social services departments. In the past this has been left to local authorities. Those authorities have not provided the resources for practical training. They maintained that they had been rate-capped and did not have the available resources. I think that my noble friend and the noble Baroness, Lady David, will have something to say about that. It is a very serious and worrying factor.
  The release of social workers who have received basic training is costly to local government. It is costly to local authorities because the student on secondment must be paid and the replacement must he paid. I understand that local authorities consider they do not have adequate resources for that. Finally, courses for older men and women have been closed down. In my experience such courses were invaluable to the married woman of 35 to 40 whose children had grown up and to older men, some of whom were coming out of the forces.
  I know that it is not for this Chamber to make recommendations concerning finance, but I have tried to outline some of the very real difficulties with training courses that local authorities will meet. This country gives a less adequate training to social workers than any of its EC neighbours.
  I end as I began by stating that this Bill will not be the positive reform that we all hope and wish it to be, unless it is properly administered. It cannot be properly administered without qualified social workers.
  Lord Henderson of Brompton: I want to take up a phrase which has just fallen from the noble Baroness and challenge her statement that it is not for this Chamber to propose anything to do with finance. It is indeed a part of the duty of this Chamber, if it so wishes, to make such proposals. We may propose but it is for the Commons to dispose. I do not think that we should limit ourselves in that regard. I feel sure that, having said that, the noble Baroness will agree that we are not in any way trespassing on the
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  preserves of the House of Commons by suggesting that training in social services, or anything else which may be the cause of financial expenditure, should be freely aired in this Chamber.
  I am very glad that that matter has been aired by the noble Baroness, Lady Faithfull, and by the noble Lord, Lord Campbell of Alloway, to whom we are indebted for this amendment. I believe it is an improvement on the amendment standing in the name of the noble Baroness, Lady Faithfull, if only because it is wider. I do not know whether it is in the right place in the Bill, but that is a matter of very little importance. However, I feel that something of this nature must be incorporated in the Bill.
  The noble Lord, Lord Campbell of Alloway, when introducing the amendment spoke eloquently about the element of control it contained. I feel sure that he is right to draw attention to that. It is a matter of very great importance, and of such importance that Parliament should pay annual attention to it. The noble Lord was then followed by two extremely authoritative speeches, one slightly shorter than the other. They were delivered by the noble Lord, Lord Seebohm, and the noble Baroness, Lady Faithfull, who both have unequalled expertise in social services. They made a great and unanswerable case for the development of education and the general deployment of social services in the public interest.
  This is a matter with which Parliament should concern itself, partly because it is a matter of such emotional concern in the public domain. There is no question that the public is emotionally concerned with the treatment of children who have in one way or another been brought into the courts, into care or indeed custody, but care particularly, because of their own misfortunes which are not of their own making. We have a special duty in Parliament to ensure that the public interest is informed.
  We cannot possibly ensure that the public interest is properly informed unless a requirement is made for the Secretary of State to lay before Parliament annually a report which Parliament can then take into consideration if it so wishes. I have observed over 40 years or so the effect of parliamentary reports by government departments on matters of public concern. It is one of the essentially civilising roles of Parliament that it can get the Executive to report to it and then feed into the Executive the concern of the public in the particular area which has been covered by the report.
  In this particular area of the care of children a large number of departments is involved. There is the Department of Health which has been divorced from the Department of Social Security. The Department of the Environment is involved because of local government. It goes without saying, because the noble and learned Lord the Lord Chancellor is the Government spokesman, that the Lord Chancellor's department is involved. The Department of Education is also involved because of the implications of the extra training, which has been so forcibly advocated this evening, for those who work in social services. Therefore, half a dozen departments will be concerned when the Secretary of State produces the report for Parliament. That in

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  itself is a compelling reason for this amendment or something like it to be agreed by the Government.
  The public are aroused, and quite rightly aroused, about the problems of children, and not merely because of the current concern shown over the abuse of children. That is only part of an ongoing concern that children should be properly looked after and that the Government are responsible for those services, for which they may give the local authorities and voluntary services detailed responsibility. The Government are ultimately responsible to Parliament.
  For those reasons I should have thought that the amendment should secure the unanimous support of all sides of the House. I hope that the Government will respond to the anxiety and pressure that has already been very effectively demonstrated this evening.
  8.30 p.m.
  Baroness David: I feel rather humble, speaking after so many expert speakers. However, I have put my name to the amendment and therefore I think that I must say a few words. Indeed, there are two aspects of the amendment on which I should like to comment. We have heard from two experts in the social services field—the noble Lord, Lord Seebohm, who produced his report nearly 20 years ago, and the noble Baroness, Lady Faithfull, who is a former director of social services and chairman of a very successful and effective all-party children's group. Then we heard from the noble Lord, Lord Henderson, with his experience of Parliament and what this House can and cannot do.
  In relation to that last point, when the noble Baroness, Lady Faithfull, said to me that she thought that we could not press for more resources I told her that I thought it was perfectly right for us to say that we must have more resources if the Bill is to be effective because so much depends upon it. I was therefore very glad to hear the noble Lord, Lord Henderson, say that it is up to us to propose that those resources should be available if the Bill is to be any use at all. I believe that my noble friend Lord Irvine of Lairg said at Second Reading that there must be the resources if the Bill is to be at all effective.
  Turning to the amendment of the noble Lord, Lord Campbell, I should like to speak about the sufficiency of the number of social workers. It is quite clear from responses to an earlier amendment of the noble Baroness, Lady Faithfull, concerning the desirability of having a named social worker for every child in care that more social workers are needed. The response from several directors of social services has been that it is hopeless; they do not have enough social workers to do so. I think that we must increase the number of social workers. That will be essential if the Bill is to work.
  If the number of social workers is to be increased, resources are required to do so. In order for that to happen local authorities have to be given a little more money. When local authorities are rate-capped and their resources are restricted they do not have the money to employ the number of social workers that they should. If there is not to be a third year of
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  training, local authorities will not have the money to send social workers for post-qualification training on secondment. That seems to me to be a very important point and I hope that the noble and learned Lord will address himself to it because if the Bill is to be successful we need more and better trained social workers. Whether the training is undertaken in a third year or post-qualification courses is a matter for consideration. I think that I am slightly more in favour of post-qualification training so long as there are the resources to provide it.
  I have now moved on to the training sphere, which is the other point which I wish to raise. I think that people who enter social work very young, perhaps at the age of 20, 21 or 22, are often faced with very difficult cases of child abuse and so on. It is very hard for them to cope when they have had such a short training. There ought to be older, more qualified social workers to help them.
  There are, therefore, three aspects to be considered—sufficiency, training and resources—and which I should like to press upon the Committee. I am very sorry that this very important amendment is being considered at this time of night when attendance is sparse. However, I think that it will be a useful discussion and I hope that a great many people will read it. I should like to give my strong support to the amendment.
  Baroness Elliot of Harwood: I should like briefly to join in the debate because I feel very strongly about the subject. I agree entirely with every word that has been said on both sides of the Committee. I have had long experience of the problem going back to the days when I was at the London School of Economics in the 1920s. We have been fighting for years and years for proper training for social workers. I cannot think why the general opinion of so many of our governors and local authorities is that social workers do not play an important part. They play a vital part.
  Today, when every day one sees in the press reports of child abuse or sexual abuse, the blame is placed on the social worker. How can the social workers cope with such problems if they do not have proper training? No-one would expect a nurse to make an efficient and important contribution to the work of a hospital without training. People underestimate the difficulties and the importance of the work. This is a matter which has been, so to speak, on the tapis for years.
  I think that it is a great pity that no government has tackled the issue properly. They talk about it being expensive to train social workers. It is far more expensive for children to be had up, brought before the courts, go to prison or be placed in protective custody than to prevent that happening by having the right people to advise and to train. I should call that an investment and certainly not expenditure. I hope that the noble Lord, who understands these things very well, will take this opportunity to do something that will help the whole community.
  Lady Kinloss: I should like to support in particular Amendment No. 213 in the name of the noble Baroness, Lady Faithfull. The social work profession is, I understand, still smarting from the Government's

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  decision last year not to introduce a three-year training. The Cleveland Report and other reports emphasise the need for better training of social workers relating to children and also their need to know more about the child care role.
  At Second Reading on 6th December I said:
  "the Bill's provision can be successfully implemented only if good quality systematic training is provided to all those who will be responsible for carrying it out".—[Official Report, 6/12/88; col. 520.]
  The Association of County Councils is very concerned about the need for adequate training.
  Lord Meston: We on these Benches would wish to support the amendment. The arguments have already been thoroughly canvassed. The need for adequate training is self-evident. The inadequacies of the present position are, as has just been said, set out in one of the shortest and most compelling chapters of the Cleveland Report. We therefore support the amendment.
  The Lord Chancellor: I should like, first, to say a word or two about the question of resources. As I understand the position, estimates for the public service are to be laid before the House of Commons. If there is a suggestion that for a particular function inadequate provision has been made I would suggest that that is a matter for the other place. That does not mean that matters which affect resources may not be raised in this Chamber, but I suggest that the question of whether the resources provided are adequate or inadequate is a matter for the other place.
  It is of course highly desirable that there should be reviews with sufficient frequency to permit judgments to he made about whether there are adequate numbers of social workers to carry out the very important work of promoting the welfare of children and families. Plainly recruitment and training issues bear very heavily on the matter of the adequacy of staffing numbers. But Amendment No. 211ZA moved by my noble friend Lord Campbell of Alloway raises two important considerations: whether such a review in these terms is possible and where the responsibility should lie for carrying out the review activities.
  The organisation of social work staff by local authorities is not generally such as to enable account to be made of those workers concerned mainly or wholly with assisting children and families. In many authorities social workers carry responsibilies for a full range of cases, including children and families. The Department of Health collects through an annual staffing return the numbers of social workers and their team leaders but, for the reasons I have given, this cannot be disaggregated to identify what might be called child care social workers.
  As the body responsible for reviewing the number of social workers in post and considering recruitment and training issues, the local authority employers have already demonstrated that they see this as appropriately their task. The local authority Conditions of Service Advisory Board published in 1987 a report Recruitment and Retention, which examined generally labour market problems affecting
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  the recruitment and retention of local government staff in London and elsewhere. It recommended selective action as the most appropriate way to deal with labour market difficulties, particularly in a limited number of occupations in local government, of which social work is one, where there are significant recruitment problems.
  That board sees its role as providing information to all authorities on the experience of some in using selective measures. More recently, in early 1988, the London branch of the Association of Directors of Social Services, assisted by the Department of Health and Social Services' inspectorate carried out a study on recruitment and retention problems across all London boroughs. In its report, which makes recommendations on how to ameliorate those problems, it stresses its willingness to re-run this exercise annually. It also draws attention to important work being undertaken by the local government training board to create a national data base on the social services' workforce.
  The local government training board's workforce analysis exercise, which has been proceeding through 1988, is concerned to establish the possibility of introducing a permanent workforce data gathering process for local authority social services departments. A feasibility study has been carried out dealing with how social services occupations and tasks could be classified and on the best process for gathering data. This work is steered through a group on which are represented the local authority associations, the board, the local authority trade unions and the central council for education and training in social work. The work is continuing and the system proposed requires only a small capital outlay by local authorities to acquire computer hardware and software. Such a system will take a little while longer to put into place.
  Meanwhile the board has decided to mount on a national basis a specific study of recruitment and retention issues facing social services departments. To that end a questionnaire has been distributed to all local authorities with comments on its content having been made by officials of the Department of Health.
  As to numbers of social workers requiring professional training, this is a responsibility of the central council. It provides regular estimates of the number of training places required on courses leading to the certificate of qualification in social work and the certificate in social work. The council estimates that about 5,000 qualified social workers is the desirable annual output from these courses. For the future the product of the board's workforce study will be available to the board, and of course available to the central council. The local authorities themselves will be able to take from that the necessary firmer information for a range of review purposes.
  In the light of the activity that local government has undertaken so far and the prospect of the creation of a national workforce database to aid local government and the training body, those responsibilities can and should rest where they are. It is my suggestion to the Committee that these arrangements that the local authorities have made

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  are good arrangements toward the aim which the committee has been discussing.
  I turn in a little more detail to the amendment in the name of my noble friend Lady Faithfull, which has been supported this evening in particular by the noble Lady, Lady Kinloss, I know that the noble Lord, Lord Henderson of Brompton, thought that the new amendment was better, but for some Members of the Committee the old one is perhaps best.
  In connection with that amendment, the Government agree that child care training should be kept under review but, as I have just said, this is primarily a matter for the employers of social workers, mainly the local authorities. The Government, of course, have a role to play in encouraging and assisting local authorities, and we have already taken two significant initiatives in this area.
  The training support programme for child care, administered by the Department of Health, will provide each local authority with grant under a £10 million programme from April 1989. Initially this is for training in child protection work but in future years the focus could change. Whether or not it should change can be considered by the Secretary of State following the receipt of plans which local authorities receiving grant are required to submit. These plans will give such details as the numbers of staff to be trained, how training relates to service developments and the expected benefits in the quality and quantity of services arising from the increase in numbers of trained staff. In considering their training plans it is entirely appropriate for the local authorities to have regard to the length and content of the training they arrange in the social services departments or obtain for their staff from colleges and other training bodies. The development of the training support programme has and will continue to be the subject of discussions between officials of the department and representatives of the local authority associations and the central council.
  Another recent development, reflecting the Government's commitment to a balanced programme of training developments for staff in the personal social services, was the decision, announced by the Minister for Health last October, to begin an examination of opportunities for post-qualifying study for social services staff. I rather think that the noble Lord, Lord Seebohm, with all his experience, was moving somewhat towards that solution rather than a third year of, as it were, pre-qualifying study. A working group is being formed, again with the local authority associations and other interests represented, and its first meeting will be held on 31st January. A survey is planned on the use made by local authorities of current post-qualifying level training.
  Within the work on gaps and priorities in post-qualifying training, it is likely that attention will be given to further training requirements in child care, to which the training support programme that I have mentioned gives further impetus. The council is also reviewing the competencies required of social workers completing two years of professional training. This is likely to lead to new guidance to
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  courses of academic content and practice placements. Taking these various measures together there is in prospect the assembly of better and more relevant training for social workers at qualifying level and beyond.
  In the light of those considerations, I believe that so far as numbers of social workers and so on are concerned the responsibility is properly with the local authorities. They have shown in recent times a number of very useful initiatives for dealing with the situation. However, in my noble friend's proposal in Amendment No. 213 I see merit in the suggestion that the Secretary of State should keep under review the need for child care training, for which he will have specific grant-making powers in Clause 64(3). Such a view would complement the requirement laid on social services departments to develop strategic plans for the training of staff concerned with child protection under the provisions of the child care training support programme.
  Accordingly, I am very willing to consider bringing forward a government amendment for the Secretary of State to conduct a review on that matter. In relation to the point made by the noble Lord, Lord Henderson of Brompton, about information to Parliament, the Committee will of course keep in mind that in Clause 65 of the Bill there is already a quite comprehensive provision for returns of information with respect to the performance by the local authority of all or any of their functions under the enactments listed there, including of course this Act, and under Clause 65(3) the Secretary of State is put under an obligation in each year to lay before Parliament a consolidated and classified abstract of the information transmitted to him under these subsections. So the basic information that is referrred to in that clause will be laid before Parliament.
  I am sure that Members of the Committee would prefer money that is available to be used in services for helping children rather than in an unnecessary duplication of reporting to Parliament. That is a time-consuming and resource-consuming operation. The more departments it covers, the more resources are required. As the noble Lord, Lord Henderson of Brompton, pointed out, there are quite a number of departments involved. I believe that the basic, really useful information, is covered under Clause 65.
  In the light of the response that I have been able to give, in particular with regard to Amendment No. 213, I hope that my noble friend Lord Campbell of Alloway will feel able to withdraw his amendment.
  Lord Campbell of Alloway: I wish to thank all noble Lords for their support for my amendment and the constructive contributions they have made to this debate. Assuredly, I am not prepared to withdraw my amendment on the basis of the arguments advanced by my noble and learned friend because, with the greatest possible respect to him, I do not find them convincing.
  There is a very important point of principle—the element of control—which arises on this amendment and on which the opinion of the Committee ought to be taken, but not at this hour, or on this occasion, when most noble Lords who would vote would not have heard the arguments. I am very disappointed

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  that my noble and learned friend cannot look with favour on the amendment, which commands wide support. I hope that reconsideration may be given before the Report stage.
  The objection that the child care element in training cannot be isolated is not understood. It is a departmental objection. Sufficiency in numbers is surely not solely a question for the local authority. My noble and learned friend suggested that he would introduce a government amendment on review. For those who have spoken, it would be wholly devoid of control.
  In these circumstances, at this hour, I beg leave to withdraw this amendment on the basis that I shall return to it on Report when I have had an opportunity to study the arguments of my noble and learned friend. At the moment I find them wholly unconvincing. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 62 [Inspection of children's homes etc. by persons authorised by Secretary of State]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 211A:
  Page 54, line 37, leave out subsection (2).
  The noble and learned Lord said: I have already spoken to this amendment. I beg to move.
  On Question, amendment agreed to.
  Clause 62, as amended, agreed to.
  Clause 63 [Inquiries]:
  Lord Mottistone Lord Mottistone moved Amendment No. 212:
  Page 56, line 12, at end insert—
  ("(a) the care of an individual child;").
  The noble Lord said: It is fair to say that the whole Bill is about the care of an individual child. It seems to me that where appropriate that subject deserves an inquiry to relate to that basic function just a much as the inquiries into various means of effecting it are currently specified in Clause 63(1).
  A child may feel that the treatment she or he has received has been detrimental to her or his interests. If that child has sought to have a problem resolved—for example, he may have sought redress under Clause 22—or has sought redress through all other channels and has found that no remedy is available, with my amendment the Secretary of State can order an inquiry to be held into the care of the individual child as such. This would provide an additional safety net for the child or for another person who is concerned to protect the child.
  It is consistent with the role that the Secretary of State already has in child abuse inquiries and I believe that it may be thought to be a useful addition to this Bill. I beg to move.
  Lady Kinloss: We have debated previously the right of the child and other family members to appeal against the making of an order or the variation of orders. Thererfore it would seem consistent, where the child or another person has exhausted all other
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  avenues of complaint, to ensure that the Secretary of State can cause inquiries to be made into the welfare of an individual child. This would fit with the present role of the Secretary of State in initiating child abuse inquiries.
  As the noble Lord, Lord Mottistone, has already said, this amendment provides an ultimate safety net for the child, or, in circumstances where things have gone very wrong, at least ensures that lessons are learnt to avoid mistakes being made in the future.
  The Lord Chancellor: It is clearly important that the Secretary of State should be able to cause an inquiry to be held into matters connected with an individual child. Local authotities have powers and responsibilities not only towards children generally but also towards individual children in the circumstances covered by the Bill.
  However, I believe that this amendment is not necessary, because Clause 63 refers to the power of the Secretary of State to cause an inquiry to be held into any matter connected with the functions of the social services commmittee of a local authority so far as these functions relate to children. It also refers to the functions of an adoption agency, and the functions of a voluntary organisation so far as those functions relate to children. Clause 63 then goes on to refer to various types of homes and premises where children may be accommodated for which the Secretary of State has responsibility under the Bill. The wording of Clause 63 provides for the Secretary of State accordingly to inquire into any matter concerning an individual child.
  I hope the noble Lord may feel that the point he desires to cover is covered by that reference. The Interpretation Act means that where the word "children" is used it includes a child in appropriate circumstances.
  Lord Mottistone: I thank my noble and learned friend for his reply. I shall examine carefully what he has said. I believe there may still be a loophole which is not fully covered by discussing the technical details of what is currently in Clause 63. Therefore I may return at a later stage with another attempt, with a better argument. At this stage, I beg leave to withdraw my amendment.
  Amendment, by leave, withdrawn.
  Clause 63 agreed to.
  9 p.m.
  Lord Prys-Davies Lord Prys-Davies moved Amendment No. 212A:
  After Clause 63, insert the following new clause:
  ("Unreasonable exercise of power by local authority.
  .—(1) Subject to subsection (2) below, if the Secretary of State is satisfied, either on complaint by any person or otherwise, that the local authority have acted or propose to act unreasonably with respect to the exercise of any power conferred or the performance of any duty imposed by or under this Act in relation to an individual child, he may give such directions as to the exercise of the power or the performance of the duty as appear to him to be expedient.
  (2) The Secretary of State may only give a direction under subsection (1) of this section if satisfied that if he does not the welfare of the child is likely to be seriously prejudiced.").
  The noble Lord said: We have already indicated in Committee, when discussing the representations procedure, that in our view there are reasons to suppose that the procedure will not work as well as is hoped for by the Government. It may not be taking sufficient account of a tendency on the part of an authority to resist complaints that are made against it. Experience may show that the independent element will not be truly or sufficiently independent and that the authority will become, or seem to become, a judge in its own cause. There is also the risk, pointed out in Committee, that the conclusions of those conducting the investigation may fall far short of what is necessary from the point of view of the complainants, or that their recommendations may not be acted upon by the authority.
  In those circumstances, we believe that if there is to be full confidence that complaints which arise against the authority will be properly handled, the Bill should provide that there is in the last resort a truly independent body with power to investigate a complaint and to give directions. We believe that those powers should be given to the Secretary of State.
  We may be told that we should rely on the wide powers given to the Secretary of State under Part X. However, the weakness with that argument is the fundamental one that the individual is not entitled under the Bill as of right to go to the Secretary of State with his complaint to seek adequate redress. It could also be argued in support of the amendment that although the Part X powers—we accept that they are very wide powers—are available to the Secretary of State, experience may yet show that they are not wide enough and that they may not cover an unusual situation which may emerge. The amendment would therefore be of assistance to the Secretary of State because it would constitute an additional power. It would ensure that where a complaint emerges from the client, from the parent or from the child, his powers to investigate that complaint are not fettered.
  I accept that there must be some filtering mechanism to prevent the Secretary of State being swamped by trivial complaints. We believe that subsection (2) of the amendment achieves that. For those very good reasons and relying on the filtering mechanism in subsection (2), I very much hope that the amendment will find favour with the noble and learned Lord the Lord Chancellor. I beg to move.
  The Lord Chancellor: Without going into the matter in too much detail, perhaps I could say that in considering the situation that the amendment has raised we may well need to consider some further powers for the Secretary of State to give directions, possibly in relation to classes of children. It may be wise to think of it in that light. But, certainly, I am prepared to consider further what we can do in this direction. Obviously we should like to proceed in conjunction with the local authority associations. That may take a little time to come to fruition. But if the noble Lord is prepared to leave it on that basis, I certainly undertake that we shall give this very careful consideration. In the light of the
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  general provisions that we are making, there may be a point here which requires to be covered.
  Lord Prys-Davies: I am very conscious that I have not obtained the smallest concession from the noble and learned Lord on the complaints procedure up to now, so I am particularly grateful for that assurance In the circumstances it gives me great pleasure to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 64 [Financial support by Secretary of State]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 212B:
  Page 56, line 40, after ("1984") insert—
  ("(iiia) the Mental Health Act 1983, in relation to children looked after by local authorities;").
  The noble and learned Lord said: In speaking to Amendment No. 212B, perhaps I can also mention Amendments Nos. 212C, 212D, 212F, 213B, 214A and 214B. The purpose of these several amendments is to make minor adjustments to Clauses 64 and 65. They are largely matters of drafting. I am ready to provide a more detailed account of them if any noble Lord should so desire that, but in the hope that the Committee will not, I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 212C and 212D:
  Page 56, line 41, after ("1984") insert (",in relation to children for whom local authorities have responsibility,").
  Page 57, line 3, leave out paragraph (a) and insert—
  ("(a) mentioned in subsection (1)(a);")
  On Question, amendments agreed to.
  Baroness David Baroness David moved Amendment No. 212E:
  Page 57, line 18, at end insert—
  ("( ) The Secretary of State may make grants to local authorities in respect of expenditure incurred by them in providing accommodation or services for children whose liberty would be deprived under the provisions of section 21 of this Act if such accommodation or services were not available.").
  The noble Baroness said: This amendment is in connection with secure accommodation once more, but it seeks to allow for grants to authorities to provide alternatives to secure accommodation. Under the existing Section 81 of the Child Care Act 1980, continued under Clause 64(4) of the Bill, the Secretary of State may make grants towards local authorities' expenditure on secure accommodation in community homes. The section also provides for the money to be repaid if it is not used or if the accommodation ceases to be secure. By 1987 the Government had paid out over £10 million and had clawed back about a quarter of a million pounds. Although there is much pressure on secure unit places at present, the Department of Health does not consider that more secure units should be built, although a large number should be refurbished. A departmental working party on future strategies for secure accommodation is understood to be

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  considering the possibility of reducing numbers in secure units by better gatekeeping on the admissions.
  It is clear not only from the experience of the Children's Legal Centre but also from the as yet unpublished research sponsored by the Department of Health at Leicester University into the use of secure accommodation that young people are being locked up unnecessarily. On the bright side, some authorities are successfully keeping down by a variety of strategies the numbers in secure units without a consequent rise in numbers in young offender institutions. For example, Essex County Council now maintains an open residential home called Bowles Court which has well-trained staff and as high a staff/resident ratio as a secure unit. The home takes only young people who meet the legal criteria for locking them in a secure unit; that is, that they are absconders at risk or are a danger to themselves or others. By this method the authority appears to have succeeded in nearly halving the number of young people who are locked up. Another example is Kent County Council which trains—and pays at four times the usual rate—specialist foster parents to look after troublesome adolescents.
  The Government are committed to limiting the numbers of young people locked up within the care system, just as they are committed to limiting those locked up for criminal offences. Although millions of pounds have been paid out towards intermediate treatment for young offenders, little has been done to establish alternatives to secure accommodation for those in care. The power to give grants to build and maintain secure units should be balanced by a power to give grants towards alternatives to secure accommodation. That is what the amendment seeks to achieve. I beg to move.
  The Lord Chancellor: Clause 64(4) and (5) re-enact the Secretary of State's existing power, first introduced in 1975 and now in Section 81 of the 1980 Child Care Act, to make grants to local authorities for the provision of secure accommodation for children in community homes, and to require such grants to be repaid if the secure accommodation ceases to be used as such. As the noble Baroness has explained, the purpose of her proposed amendment is to give the Secretary of State an additional power to make grants to local authorities to defray the costs incurred by them of providing accommodation and services for children who might otherwise have been placed in secure accommodation. In other words, to place equal emphasis on the need to encourage local authorities to provide and develop a range of specific accommodation and services which would reduce or obviate the need for placement in security. The noble Baroness has given illustrations of how that may be done.
  The Government totally share the view of the noble Baroness that secure accommodation should be seen as very much a last resort, to be used only when all else has been tried and failed. We also take the firm view that a child's placement in secure accommodation should be only for so long as it is necessary and unavoidable. It follows from what I
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  have said that we would also share the view of the noble Baroness that local authorities should make available a range of facilities and services to meet these twin objectives.
  The question, therefore, hinges on whether it is both necessary and appropriate to give the Secretary of State an additional grant-making power to encourage the further development of alternatives to secure accommodation.
  It may be helpful if we reflect for a moment on why specific provision was made in 1975 to enable the Secretary of State to make grant aid available to local authorities to defray the capital cost of providing secure accommodation. I would remind noble Lords that the grant does not cover, and never has covered, the revenue costs associated with operating a secure unit. That is because accommodation is an expensive resource, and relatively few children need to be placed in such accommodation. Therefore it is generally not practicable or viable for each local authority to provide its own secure unit. The way forward was, therefore, for local authorities to act co-operatively, with one authority undertaking to provide a secure facility on behalf of surrounding authorities or within a particular region.
  It was because the Government sensed that local authorities were reluctant to commit themselves to making that kind of expensive capital provision, unless they had some kind of security, that they were anxious that the matter should be dealt with. They therefore provided a grant-making power to the Secretary of State for that purpose. Since 1975 the stock of secure accommodation available nationally has gradually increased. The result is that the existing stock is about right in order to cope with potential demand.
  In our view, it is neither necessary or appropriate in the circumstances to go along the line proposed in the amendment. It is undoubtedly the case that there are many children in care who could be said to meet, in principle, the statutory criteria for restriction of liberty, but who are already well catered for within the existing range of non-secure facilities and services. What separates the children who need to be placed in secure accommodation from the generality of such children is the degree of disturbance or concern about the consequence of their behaviour. For the generality, there are numerous existing examples of local authority good practice in making provision for this particular group of young people. What is important, and here I share the view of the noble Baroness, is that such facilities should be more widespread.
  As the noble Basroness has said, there is within the Department of Health a working group which has been addressing these very issues. The group hopes to complete its work shortly, and this will undoubtedly lead to further advice and guidance being given to local authorities on this issue. In our view, this is the preferred approach.
  The need for an additional grant-making power does not exist in this situation because the conditions which require it, the provision of secure accommodation, do not exist in relation to these other facilities. The situations which the noble

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  Baroness has envisaged would be covered by revenue production. So far as I am aware, there has never been any grant provision to cover the revenue aspects of secure accommodation. The capital aspect was covered for the reason that I have explained.
  In the light of that explanation I hope that the noble Baroness will feel able to withdraw her amendment.
  Baroness David: The Government's attitude is all right: I am pleased with their sympathetic approach because it is what we should all wish to achieve. I believe that we are back to the question of resources. The kind of provision which Essex County Council makes in Bowles Court, where there is almost a one-for-one relationship with staff and young people, and the expensive foster care provisions made by Kent County Council, cost money. Of course they cost revenue money. If the Government really want to improve the situation, I believe that they will have to provide more resources for local government to secure that. Of course I shall not press this matter at this time of night but I shall look at it again. I believe that this is an issue of money and I may come back to it at another stage. However, I am glad that the principle at least seems to be accepted. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 212F:
  Page 58, line 2, leave out ("enactments") and insert ("functions").
  On Question, amendment agreed to.
  Clause 64, as amended, agreed to.
  Baroness Faithfullhad given notice of her intention to move Amendment No. 213:
  After Clause 64, insert the following new clause:
  ("Training in child care.
  .—(1) The Secretary of State shall keep under review the need for child care training as defined in section 64(8) of this Act, the number of persons who should receive such training and its duration.
  (2) In carrying out the review specified in subsection (1) above the Secretary of State shall—

  (a) consult the local authority Associations whose members have responsibility for child care, the Central Council for Education and Training in Social Work and such other bodies and persons as appear to him to be concerned; and

  (b) have regard to—

  (i) the effect which child care training requirements may have on the overall content and length of training in social work; and

  (ii) the need to ensure that social work training is reasonably comparable in content and length with the training received by other professions responsible for child care.").

  The noble Baroness said: I spoke to this amendment at some length under Amendment No. 211ZA. In his reply my noble and learned friend responded both to my noble friend Lord Campbell of Alloway and myself. I thank my noble and learned friend for the statements which he made. I was particularly glad to hear that the Secretary of State will be conducting a review. I should like to read what my noble and learned friend said because I should
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  like to see whether that review will be made available to those working in the social services and whether the review will touch on both the number and training of social workers. However, I am grateful to my noble and learned friend for his response.
  [Amendment No. 213 not moved.)
  9.15 p.m.
  Lord Kilmarnock Lord Kilmarnock moved Amendment No. 213ZA:
  After Clause 64, insert the following new clause:
  ("Use of Social Fund to help families stay together

  (1) The Secretary of State for Social Securities shall, under sections 32 (2) (b), 33 (10) and 34 (8)(a) and (b) of the Social Security Act 1986, issue directions and provide guidance for social fund payments to be directed at helping families remain together and averting the need for the reception of children in local authority care.

  (2) These directions shall provide that a non-repayable social fund payment be made to meet the prescribed needs of the family provided that—

  (a) the need cannot otherwise be met from the existing parts of the Social Fund, and

  (b) the family is in receipt of Income Support or Family Credit, and,

  (c) the total capital resources of the applicant and his partner, including any sum to which either or both are beneficially entitled, do not exceed £500.").

  The noble Lord said: The purpose of this proposed new clause is to enhance the role of the social security system in preventing the need for the reception of children into care and to clarify the boundaries between the role of local authorities and that of central government in the task of prevention. Therefore, I hope that it will not be argued that that is improperly placed in this Bill. In my submission, it is of very real relevance to the Bill.
  In response to a suggested amendment to Clause 15 which sought to broaden the powers of local authorities in the giving of cash assistance in the exercise of their preventive duties to families in need, the noble and learned Lord the Lord Chancellor said:
  "A broader power could push local authorities into an income maintenance role which is the function of the social security system".—[Official Report, 20/12/88; col. 1297.]
  We agree entirely that the main function of local authorities should be the provision of services to families, and that helping with cash in the first instance should be provided through the social security system.
  It is widely recognised that the task of preventing the unnecessary reception of children into the care system involves not only the social services but also the social security systems. In its 1984 report on children in care the Social Services Committee of another place, at paragraphs 36 and 37, wrote:
  "There is a well established link between deprivation and children coming into care…poor families are more at risk. Social work intervention alone cannot be expected to combat the cycle of poverty, bad housing and indebtedness. The social security system plays a central role in the lives of children coming into care".
  At present it is often unclear who has primary responsibility for providing cash assistance for families where there is a risk that the child may otherwise have to be placed into the care of the local authority. In theory, the social fund should fulfil that function and the Social Fund Manual which provides

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  guidance to social fund officers (SFOs) at paragraphs 6452 and 6453 states:
  "When dealing with families under stress, close links with the LA social services are very important and SFOs should know how their LA carries out its responsibility under Section 1 of the Child Care Act 1980 … The financial contribution of LAs varies considerably and SFOs should not expect families under stress who apply for CCGs to look to the LAs in the first instance, unless there is a local agreement on the type of circumstances in which the LA provides help".
  However, in the guidance applicable to the category "Families in Distress" it is emphasised in the manual:
  "All families, especially those on low income, face stress at various times so that it cannot in itself be a reason to give a CCG (Community Care Grant). SFOs may award community care grants to ease exceptional pressures on a family arising from one or more of the following:

  (a) the breakdown of established family relationships, or

  (b) a deterioration in the applicant's home which makes it unfit or unsuitable for the applicant and his family to live there, or,

  (c) the beginning or continuing existence of persistent disability or chronic sickness."

  That comes from paragraph 6451 of the manual.
  The assumption that families would only ever be in need of help in one of the above three circumstances places an unreasonable restriction, I submit, on the use of the social fund to prevent the need for children to be taken into care as a result of extreme financial pressure. The preventive scope of the fund is further restricted by the express exclusion of help for certain items. These include fuel bills, housing costs (including deposits to secure accommodation), mortgage payments, rates, water rates, service charges, rent and analogous charges for accommodation, work related expenses, legal expenses and school meals, among other things.
  Therefore, the social fund could not be used, for example, to pay a deposit to enable a family to secure accommodation or to help a family pay a large fuel debt in order to avoid disconnection. However, the impending privatisation of electricity may well create additional problems for families in such circumstances as private boards are likely to show less restraint in regard to disconnection of supply when a family is in difficulty with the bill.
  Some local authorities may decide to use their powers under Section 1 of the Child Care Act or, in future, under Clause 15 of this Bill when it is enacted to provide this form of cash assistance; but, as acknowledged in the social fund manual itself, local authority practice varies from one authority to the next, so such help is not guaranteed. If help is not forthcoming from either source the family could be made homeless or the souce of light and heat cut off. Both situations may lead ultimately to the reception of the child or children into care.
  I am sure that the whole Committee will agree that the removal of children from their natural parents under such circumstances is both unnecessary and undesirable. In my submission the social fund should be adapted to include within its scope the function of helping families to remain together, through grant assistance, thereby complementing the parallel service provision function of local authorities without, I should make clear, overstepping the fund's
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  cash limits. That is not the purpose of this amendment.
  The Government have expressed concern about under-utilisation of the social fund, in particular of the community grant element. At the end of September last year the take-up of community care grants was just 52 per cent. of projected expenditure. This was revealed in a Written Answer, at col. 223 of the House of Commons Hansard for 9th November last year. In that Answer, Mr. Peter Lloyd referred specifically to, among other things, the role of the fund in reducing the risk of people in vulnerable groups going into institutional or residential care. Logically, this must include the children of such families.
  It is also one of the primary purposes of the Child Care Act 1980 to,
  "promote the welfare of children by diminishing the need to receive children into or keep them in care".
  Those words are taken from Section 1(1) of that Act. The additional function we propose in the amendment would ensure that the community care grant element of the social fund is put to the best possible use in this regard. We want to ensure that it is used in a more pro-active and creative way in relation to child care than appears to be the case at present, but always, I repeat, within the constraints of the available resources. It would also—as I suggested at the outset, and I want to repeat this strongly—help to clarify the local authorities' sphere of responsibility under Clause 15 of this Bill and avoid the very real danger of a game of ping-pong developing in certain cases between the social services and social security. I beg to move.
  The Lord Chancellor: While I appreciate the noble Lord's concern about this issue, I do not consider it appropriate in this Bill to be introducing legislation which affects the principles and application of policy under social security legislation which is the responsibility of my right honourable friend the Secretary of State for Social Security in another place.
  As the noble Lord has demonstrated, my right honourable friend the Secretary of State for Social Security has, under Section 32(2)(b), issued directions and guidance to social fund officers to ease exceptional pressures on families with the specific aim of helping to keep members of the family together. It is a question of relating that to the situation and the circumstances of the area. I feel that that direction has taken account of the noble Lord's concerns in an appropriate way. My right honourable friend has also given assurances in another place that the social security reforms introduced last April will be monitored. That is now taking place so we shall be able to see a little more clearly how the process is working. The particular concern that the noble Lord has expressed, as he himself pointed out, has been addressed in general. In those circumstances I hope that the noble Lord will feel able not to press the amendment.
  Lord Kilmarnock: I am grateful to the noble and learned Lord for what he has said about the monitoring of the social fund. I wish to put it on record that the community grant element in that fund is restricted in the first place to people moving out of institutions or residential care. Secondly, it is restricted to vulnerable groups such as the disabled, the elderly, the mentally ill, the handicapped and the chronically sick. Thirdly, it is restricted to families under stress—the category, I believe, that will probably most apply in the case of children being taken into care.
  I have demonstrated my feeling that the circumstances in which families under stress can benefit from the grant element are unduly restricted. Before I withdraw the amendment I hope very much that the noble and learned Lord will undertake to see that the proposals I have put forward are brought to the attention of his right honourable friend. I do not believe that they are quite so disconnected with this Bill as the noble and learned Lord has suggested. He will remember the debate upon Clause 15.
  The circumstances under which a local authority can make a grant arise only in very exceptional cases. Local authorities are obviously constrained by cash problems. I hope very much that the noble and learned Lord at least agrees in principle that it would be a good thing to make the social fund rather more active in this respect with a view to taking some of the burden of demands off local authorities as regards cash payments under this Bill. If the noble and learned Lord can give me a few words of comfort in that direction I shall be happy to withdraw the amendment.
  The Lord Chancellor: I hope that Members of the Committee will take it for granted that I shall draw the attention of my right honourable friend the Secretary of State for Social Security to the noble Lord's remarks.
  Lord Kilmarnock: In view of those remarks I am most grateful to the noble and learned Lord. I beg leave to withdraw the amendment.
  Clause 65 [Returns of information to Parliament]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 213A:
  Page 58, line 19, leave out ("below").
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 213B:
  Page 58, line 20, leave out ("the adoption of children or with").
  On Question, amendment agreed to.
  9.30 p.m.
  Baroness Faithfull Baroness Faithfull moved Amendment No. 214:
  Page 58, line 31, at end insert—
  ("( ) The Secretary of State shall in each year prepare and lay before Parliament a report indicating the manner and extent to which the provisions contained in Parts III and IV of this Act have
  540
  been carried out in the year under review, the resources which are expended on the performance of those provisions and the resources which he proposes to make available in the ensuing year for the performance of those provisions.").
  The noble Baroness said: This is a probing amendment. In trying to implement the provisions of the Bill, to prevent the break up of families and to help positively children in trouble, resources will be needed. Over the past few years the resources of local authorities have been severely cut. A number of children's homes and family centres have been closed. Family centres run by voluntary organisations have looked to the Government for grants and have failed to get them.
  We are worried that the resources needed to meet the recommendations of the Bill will not be available. I therefore wish to bring this matter to the notice of the Secretary of State. As was stated in regard to earlier amendments, instead of bringing the case before Parliament, perhaps there should be a report once a year as with the training so that we can see whether or not we have adequate resources. I beg to move.
  Lord Prys-Davies: I should like to support the amendment. We have a good Bill but the conflict over the use of scarce resources will continue. Priorities will have to be established between conflicting claims. We may find that there will be relative neglect of some facilities. It is therefore right that a duty should be placed on the Secretary of State to produce a report. I am not so concerned that it should be an annual report. We want to see a periodic and frequent report. Such a report by the centre would be inductive and the lack of such attention to what is happening at ground level would be worrying. It gives me great pleasure to support the amendment.
  Lord Henderson of Brompton: I should like to support the amendment on two grounds; first, on the ground of accountability of the Executive to Parliament; and secondly, to reinforce what I said earlier to the noble Lord, Lord Campbell of Alloway, that we should not be frightened by the pretext, if I may put it in that way, of the Government that we should not concern ourselves with money matters. In this case we can do so, because the matter is only incidental to the purposes of the Bill.
  The purposes of the Bill are set out in the Long Title. A Bill of this kind costs money. The Government state that quite frankly, as they are required by Parliament to do, in the Financial Memorandum to the Bill. It states that the full annual cost of the Bill will be between £4 million and £11 million and that there may also be one-off training costs for local authority staff training. We are concerning ourselves with finance in this amendment. That is another incidental financial provision of the Bill but it is not the main purpose of the Bill. When the Bill goes to another place we move the privilege amendment which makes it technically correct in relation to the financial privilege of another place. This is an example of parliamentary accountability which I think we should press on the noble and

  541
  learned Lord. I hope that he will respond sympathetically to the amendment.
  The Lord Chancellor: In a sense I have already anticipated what I should like to say about this amendment in what I said earlier. There is a certain amount of common material between the two. It is important that Parliament is kept informed about the operation of children's services and reports to Parliament are one of the ways in which that can be done.
  As I have already pointed out, the Bill provides in Clause 65(3) for an annual report to Parliament in the form of a consolidated and classified abstract of information obtained from local authorities about the performance of their functions and from courts about proceedings in relation to children. This replaces a provision in current legislation. I know that this annual abstract is thought to be a valuable source of data. In that sense it is perhaps distinguished from some provisions about reports which are in current legislation. I have, however, a number of reservations about this amendment which would require the Secretary of State to report annually to Parliament about the operation of the provisions of Part III and Part IV of the Act and resources expended on those activities; that is local authority provision of services for children and care and supervision proceedings. It would be a major task to obtain and summarise such returns of information every year, not only for the Secretary of State but for local authorities and courts.
  It would be necessary to isolate these provisions and not deal with associated provisions in other parts. An abstract is more general in the sense that it does not require that kind of particularisation. For example, the functions of local authorities in providing services in Part III would have to be separated from duties in respect of the emergency protection of children and privately fostered children. It would also be difficult to differentiate expenditure on particular social services and court business from others provided for in the Bill. That is not the practice in the Government's expenditure plans for personal social services where the established approach is that local authorities must be responsible for allocating available resources according to their view of local priorities.
  There are at present requirements in the Child Care Act 1980 and the Children Act 1975 for triennial and quinquennial reports to Parliament on certain aspects of local authority responsibilities. Those are time-consuming for all concerned in their preparation, and we have never felt that they have been found to be particularly useful. I do not know whether anyone can indicate a time when they were found to be useful.
  After careful consideration we decided that those provisions were unnecessary and should not be replaced. The annual abstract of information obtained from local authorities and courts which seems to be found useful appears to us to be the best
  542
  way to keep Parliament informed with the minimum of special work.
  It will of course be open to the Secretary of State under Clause 65(1) and (2) to decide what information he requires and therefore what information appears in the annual abstract to be provided under Clause 65(3).
  I hope that I have said enough to convince my noble friend that the basic information she seeks will be provided under Clause 65 and that it would not be wise to pursue the amendment.
  Baroness Faithfull: I thank my noble and learned friend for his reply. I put forward the amendment so as to put up a marker that the matter must be kept under review; that there will be difficulties and that there are difficulties now. I am sure that my noble and learned friend knows that full well. With that, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 214A and 214B:
  Page 58, line 39, leave out from ("1983") to end of line 41 and insert ("(so far as it relates to chidren looked after by the authority").
  Page 58, line 42, leave out from "(1984") to end of line 44 and insert ("(so far as it relates to children for whom the authority have responsibility)").
  On Question, amendments agreed to.
  Clause 65, as amended, agreed to.
  Baroness Elliot of Harwood Baroness Elliot of Harwood moved Amendment No. 214C:
  Before Clause 66, insert the following new clause:
  ("Cruelty to persons under 16.
  Children under 16
  .Section 1(7) of the Children and Young Persons Act 1933 (which provides that that section shall not affect the right of parents and others to administer punishment) is hereby repealed.").
  The noble Baroness said: In moving Amendment No. 214C I shall speak also to Amendment No. 259. We refer to the Children and Young Persons Act which was passed in 1933. That was 59 years ago. Since when, I am sure the Committee will agree, the world in which we live has changed enormously. The responsibility of local authorities, through children's committees, probation committees and social services committees, has developed and plays an enormous part in the lives of all children and their families. It is in the light of modern experience, techniques and research that I move the amendment.
  Corporal punishment in schools in this country has been abolished. That is done. The amendments do not interfere with parents but they discourage the use of that kind of punishment which in many cases can harm children who are growing up, especially if they are handicapped or mentally abnormal. Moderate and reasonable punishment is not affected, so the common law remains as it is.
  In many European countries, corporal punishment for children is not allowed. It is strange that in Britain legislation preventing cruelty to animals was passed 63 years before the first Act of Parliament forbidding

  543
  cruelty to children was passed. It is a remarkable fact that I discovered today. I was talking to a man who recently made inquiries of a prison governor dealing with young people. He learnt in his experience that every young man or woman in that prison had earlier been the subject of corporal punishment and subsequently committed further offences, finally being sent to prison. That demonstrates what I have always said—that violence breeds violence. This account is a good example.
  There are so many other ways of dealing with offences. This may mean the heads of schools studying alternatives with psychiatric experts or people working with difficult children, gaining confidence and trust from the children they are handling. So many of the children's organisations we all know are deeply concerned to change people's attitudes towards corporal punishment and to learn and use alternative methods. This very important Bill, which I support wholeheartedly, is an opportunity to start again in the right direction on this subject which I strongly believe we should take. I beg to move.
  Lord Seebohm: This amendment has caused the most extraordinary interest—rather surprisingly so—in the media. I thought that perhaps we would have the television cameras on, but they seem to have been switched off just in time. I have had private correspondence, as has the noble Baroness, Lady Elliot, and no doubt other Members of this Committee, and I describe some of the letters as coming from enthusiastic "whackers". There is clearly a misunderstanding of the interpretation, but they show what a strong belief still exists in the beneficial results of corporal punishment.
  Therefore it is important to say straight away, as has already been pointed out, that this amendment means no change whatever in the common law right of parents to use reasonable force in bringing up their children. Nor would the repeal of the relevant subsection criminalise physical punishment, apart from laws that already exist. The amendment can almost be said to be cosmetic.
  The Children and Young Persons Act 1933, which we are now discussing, was enacted 56 years ago—I think that my mathematics are slightly better than the noble Baroness's—and both public opinion and the laws have changed considerably since then. The wording of the subsection is:
  "Nothing in this section shall be construed as affecting the right of any parent"—
  that is OK—
  "teacher"—
  that of course is wrong, because the 1987 Act has abolished corporal punishment already for schools—
  "or any other person having the lawful control or charge of a child or young person to administer punishment to him".
  Already there have been regulations, and I believe more are coming out to stop the corporal punishment of children in local authority care; so that also is probably quite out of date. Clearly this subsection is no longer correct anyway.
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  The real point that those of us who support this amendment wish to make is that giving a legal blessing to physical punishment is no longer acceptable. The increasing discovery of child battering and abuse shows the necessity of doing everything one can to make parents and others think twice before relying heavily on corporal punishment as a normal element of child training.
  The most disturbing evidence has been produced by Nottingham University child development research unit, which concludes that regular corporal punishment in the home, including the use of implements, is extraordinarly prevalent. It states that by the age of seven, 8 per cent. of children are being hit once a day; 33 per cent. not less than once a week; and 32 per cent. of seven year-olds receive punishment with an implement. One cannot be complacent about that. The amendment will not legally change anything. I hope that it may make people think, and will gradually change public opinion. I strongly support it.
  9.45 p.m.
  Lord Campbell of Alloway: As I understand it, the noble Lord, Lord Seebohm, accepts as do I that parents have the right to administer immediate corrective punishment. I seek help from my noble and learned friend the Lord Chancellor as to whether that right would be truly assured in common law if the amendment in its present form were to be carried into legislation.
  I also seek guidance as to the marginal gloss to this amendment: cruelty to persons under 16. I would never in any sense support cruelty; nor would I support punishment of the order of cruelty. I am only concerned that the amendment would not derogate from the right which I understand that the noble Lord and I—and I am grateful to the noble Lord—think it is right to preserve; namely, the right of parents to administer reasonable immediate corrective punishment if so advised.
  Lord Meston: I, too, should like to express sympathy with the amendment. I share the astonishment of the noble Lord, Lord Seebohm, particularly at the Nottingham University figures which reveal among other things an extraordinary amount of violence inflicted on babies of under one year of age. However, like the noble Lord, Lord Campbell of Alloway, I question what, if anything, an amendment in this particular form would achieve.
  Section 1 of the 1933 Act created an offence of cruelty to children. It specified various forms of cruelty which had to be found to have taken place in a manner likely to cause unnecessary suffering to the child. As I understand it, Section 1(7) of the 1933 Act was put in to avoid doubt. It preserved the right of parents and others with parental control to administer normal chastisement. It was not limited solely to physical chastisement; in other words, it would allow me to send my children to bed early or to stop them watching television without being charged with having been cruel to them, however much my children might protest in the circumstances.

  545
  If the amendment removes Section 1(7) but does not alter the common law rights of normal chastisement, it seems that the amendment adds nothing except possibly an element of doubt where none existed. In fact, it may take away a quite valuable provision in Section 1 of the 1933 Act which was inserted for the avoidance of doubt.
  The noble Lord, Lord Seebohm, frankly admitted that in a sense this was a cosmetic amendment designed to send out a signal. To that effect it would be valuable, but one wonders whether the signal which would be transmitted would be blurred if the amendment or something like it were agreed to. Perhaps a great deal more thought is needed and something more precise should be formulated before we attempt further to legislate on the matter.
  Lord Henderson of Brompton: As my name is also down to this amendment, I should like to add that I am in some doubt as to its effect. I should like to ask the noble and learned Lord the Lord Chancellor whether the effect of this would extend to foster parents. I believe that the amendment would allow the common law right of parents to use reasonable force on their children to remain.
  The noble Lord, Lord Meston, has just said that this amendment concerned the removal of doubt. I wonder whether it would remove from foster parents the right to hit their children reasonably, if that can be done, which I doubt, but it would retain a right for parents. I must declare my own belief that it would only be right and proper for that right to be abolished completely, both in common law and in statute law, for parents and everyone else. I find it difficult to draw a line, I must say, between what I regard as the harmless and occasional cuff, the corrective cuff so to speak, by parents and the clearly brutal extremes to which other parents go. There is undoubted sadism; the Nottingham studies show that, and they have been referred to in sufficient detail by the noble Lord, Lord Seebohm. The mere detail as to the implement which is used by parents on their children shows that there is an unpleasant fetishism about it which ought to he controlled or abolished. I think the balance goes in favour of abolition. Meanwhile this amendment goes halfway and I commend it to the consideration of the Committee.
  I agree with the noble Baroness, Lady Elliot, who eloquently and shortly introduced the amendment, that violence breeds violence. I do not believe it is the right way to bring up children. If we look at nature, animals do not hit their young, they educate their young. One does not see them carrying out the equivalent of corporal punishment on their children; that is not the way of nature. They educate them. They have got it in their genes to be like their parents, their parents nurture them, as do the effects of nature, to become grown up animals. We have our genes, we have our nurture. We should be as wise as the animals. I think it is an insult to the animals that if a parent has behaved abominably, we say that he has behaved like an animal. He has not, he has behaved like a human being, and the unfortunate tendency of human beings towards sadism needs to be restrained.
  546
  The amendment would not do much more than act as a pointer in the right direction, especially in this Bill which deals with children in care and in foster homes. For reasons which are by no means clear but are certainly felt fervently, I support the amendment. I ask the noble Baroness not to press it necessarily to a Division tonight but, in the light of the reply of the noble and learned Lord the Lord Chancellor perhaps she could come back on Report. I think that enough has been said this evening to show that there is some doubt as to how far the amendment goes. Perhaps in the light of the explanation of the noble and learned Lord the Lord Chancellor we ought to consider the matter further and, after consideration, come hack at a later stage. Meanwhile, I am extremely grateful to the noble Baroness for having introduced the amendment, which I think is of great importance to the Bill. It bears also on an earlier amendment which we discussed. I am sure that we eagerly await the reply of the noble and learned Lord the Lord Chancellor.
  Baroness David: As my name is also down to the amendment, I must say one or two words. I think the aim is to discourage the physical punishment of children and to reduce child abuse. In answer to the noble Lord, Lord Henderson, I believe that the amendment certainly does not stop the common law right of parents to administer reasonable and moderate punishment, however one defines "reasonable and moderate". The meaning has probably changed a good deal over the years and will go on changing.
  The aim of the amendment is to introduce a little more education to try to change the attitudes of people. Quite a lot of us should perhaps have wished to go rather further than the noble Lord, Lord Henderson, but thought it would be unwise and jumping too far ahead of the public. As I said when we talked about the other corporal punishment amendment, that is a matter for the legislators of this country. I am thinking particularly of Members of this Chamber who do not have to worry about what their constituents feel. We should try to be a jump ahead of public opinion and see the way things are going. As I have said, when there is so much violence in our society and so much evidence, which I shall not go into now, to show that corporal punishment does much more harm than good, I think this Chamber should try to take a lead. I hope that the noble and learned Lord will feel able to give some support to this very moderate amendment.
  The Lord Chancellor: We discussed this general question in relation to an earlier amendment. I set out fairly fully the position as regards regulations regulating the use of corporal punishment in an institutional setting. I explained what I believed to be the situation for foster parents and suggested that the matter should he agreed with them arid a local authority at the time the foster parent arrangements were made.
  On this amendment the situation is that Section 1 of the Children and Young Persons Act 1933 makes it an offence for any person who has attained the age of 16 and has the custody, care or charge of a child

  547
  wilfully to assault, ill-treat, neglect, abandon or expose the child,
  "in a manner likely to cause him unnecessary suffering or injury".
  This is a serious offence which regrettably is not uncommon. The maximum penalty was increased from two years to 10 years' imprisonment in the Criminal Justice Act 1988. Therefore, it is highly desirable that this offence should be made clear and that people should understand exactly what is meant by it.
  Members of the Committee will see that the provision contains reference to assault, to ill-treatment, to neglect and to other offences. Other words are used but those are perhaps the key words. It would occur to anyone reading that against the background of common law to question the position if a parent assaults his child as a way of administering reasonable correction. That is the nature of corporal punishment; it is intended to cause some degree of feeling on the part of the child as a consequence of the action of the parent to show that what the child did was not approved of. Anyone would have to say that in law that may amount to an assault.
  Section 1(7) was included to make it clear that in this statutory offence the exercise of reasonable chastisement was not to be construed as creating an offence. That was the purpose of subsection (7). It provided that nothing in Section 1 was to be construed as affecting the right of any parent, teacher or other person in loco parentis to administer punishment on a child. If, otherwise, the right of a parent to administer punishment is removed, it does not affect that because subsection (7) is only modifying the effect of Section 1 of the 1933 Act. Therefore there is nothing wrong or out of date in Section 1(7) in its present form.
  But if Section 1(7) is abolished, as far as I can see, there is no question of the common law right remaining as regards cruelty to children. It might be that if one was prosecuted for assault at common law, if there is such an offence in England, that right
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  would apply. But it would not work in the case of an offence of cruelty.
  If one is facing a charge that carries a penalty of up to 10 years, it is highly desirable in the interests of precision to have the matter clear. I fear that the only effect of this particular signal would be to create serious ambiguity where none exists at the moment. I do not believe that to be a step forward. There may be other steps forward, but I cannot advise the Committee that what is proposed would be a step forward. It would be a step in altogether the wrong direction as regards the clarity of the law.
  I have already explained the Government's view about corporal punishment in relation to care and care establishments. However, the effect of the amendment as constructed would be to create complete obscurity. The provision was put into the Bill for the sake of clarity and its removal would have the opposite effect. I fully appreciate the strength of the noble Baroness's views on such matters and the strength of views that other speakers have expressed, but I hope that she will accept that that would not be a wise move.
  Baroness Elliot of Harwood: I thank the noble and learned Lord very much for his reply. My advice came from the Children's Legal Centre, where they have a number of lawyers, but lawyers do not always agree with each other, as we know.
  I was impressed by what the noble and learned Lord the Lord Chancellor said and I have no intention of pressing the amendment at this moment. However, I should like to find some way of ensuring that people are prevented from applying corporal punishment in the public sphere. Abuse in the private sphere would probably be found out by the probation officer, the children's officer or the police, in which case the person concerned would be prosecuted. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clauses 66 to 68 agreed to.
  10 p.m.
  Baroness David: I should like to make clear to the Committee that the noble Lord, Lord Irvine of Lairg, cannot be present tonight and that therefore most of the amendments in his name will not be moved. That may give a certain amount of pleasure to some Members of the Committee. Amendment No. 215 will not be moved, but I shall have something to say about Amendment No. 216.
  Clause 69 [Courts having jurisdiction under this Act]:
  [Amendment No. 215 not moved.]
  The Deputy Chairman of Committees (Lord Ampthill): Before calling Amendment No. 216 I should remind the Committee that, if the amendment is agreed to, I cannot call Amendments Nos. 217 to 222.
  Baroness David Baroness David moved Amendment No. 216:
  Page 60, line 33, leave out subsection (2) and insert—
  ("(2) Party to any family proceedings (save those brought under the inherent jurisdiction of the High Court in relation to children) may initiate such proceedings in the High Court, a County Court or a Magistrates' Court").
  The noble Baroness said: I wish to move Amendment No. 216, standing in the name of my noble friend. The argument for the amendment has been anticipated in the arguments that my noble friend advanced in favour of Amendments Nos. 144, 163 and 165. The noble and learned Lord, in reply to Amendment No. 144, said that he looked forward to Amendment No. 216, when he would give a full account of the structure of the procedure that he envisaged. I move Amendment No. 216 just to give him the opportunity to speak to it as he promised to do at that earlier stage. I beg to move.
  The Lord Chancellor: The situation is that Clause 69 has been put into the Bill as a clause which requires refinement but which enables us to set out in principle what we have in mind. The Committee will remember that late in the summer, after Lord Justice Butler-Sloss's report came out, the Lord Chancellor's Department issued a consultation paper. We had to make the time for consultation quite short because I did not wish to do anything which would lose the place of the Bill in the parliamentary process. I believe that it is very important that the Bill should go forward.
  The details of the jurisdictional process are necessarily rather short, therefore. We shall try to refine them as fully as we can, but I cannot promise that because the structure into which those details are to be inserted is rather complicated. I cannot promise that we shall succeed in doing that in time for the later stages of the Bill in this House, although, as I said in answer to a question put to me earlier, we shall do our best.
  We have in mind that jurisdiction in the proceedings with which this Bill deals should generally be at three levels: first, the magistrates' court—I indicated that we are proposing that that
  550
  would be in the domestic panel and I hope that we shall be able to improve the arrangements in that respect; secondly, in the county court; and thirdly in the High Court; and that these courts should be available for proceedings. I also indicated that the purpose of the powers that we take would be to give criteria under which particular care cases would go to the appropriate level of court. We should also expect the courts to have power to transfer cases from one court to another at a certain level. I believe that it would be wise and desirable that some degree of expertise should be available in particular courts. Allowing transfer along the level would assist in that matter. At the top level one has in the High Court the special expertise of the Family Division, which would be the part of the High Court in which one would expect to operate.
  That is the general scheme that we have in mind. I believe that it will be wise to keep the procedures and powers for making arrangements fairly flexible to take account of the experience that we gain in this situation. The truth is that there is very little information available about the details of the caseload that exists at present in the child care jurisdiction. As some Members of the Committee will know better than others, at the moment there are some cases which appear in the wardship jurisdiction that might much more properly be dealt with as what they are; namely, care jurisdiction cases. They arrive in the wardship jurisdiction as a way of securing the jurisdiction and expertise of the High Court. I hope that we shall be able to achieve that end without the rather awkward system of trying to use wardship.
  Those are the general indications that we have in mind. As I said, the context into which this matter has to be placed is quite a complicated one. However, I hope that I have given a reasonably clear picture of what the Government wish to achieve in this situation.
  Lord Meston: Speaking for myself, I am a little disappointed that even at this stage the noble and learned Lord is not able to speak with a little more precision, appreciating that we are about to travel into fairly uncharted waters. Clause 69 contains the potential for much good. It means that care proceedings are no longer confined to the magistrates' court and the general object, as expressed by the Government, is to ensure that the right case starts—or at least finishes—in the right court.
  Frankly, the difficulty is that it is not possible to be confident about how Clause 69 will work, because it is simply an enabling provision. Although the noble and learned Lord has given some indication of what is to come, the outline of the rules is unknown. I certainly had hoped that he would lift the veil a little higher to enable us to see further ahead. There are a considerable number of questions that I wanted to ask if he did not answer them in the course of his remarks this evening. He has not answered them but frankly at this stage the time is too late to ask those questions.
  However, the noble and learned Lord indicated that the criteria will be forthcoming. At some

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  stage—I hope before the Bill leaves this House the first time round—we should like to know what they are to be, in particular to ensure that they will be based on questions of complexity and not simply questions of convenience. Therefore, with all due respect to the noble and learned Lord and those who assist him, I hope that special efforts will be made to give us some reassurance that these grey areas will he illuminated as soon as possible.
  Lord Prys-Davies: I read with interest what the noble and learned Lord the Lord Chancellor said in the discussion on Amendment No. 144 put forward by my noble friend Lord Irvine. However, I found myself in difficulty with reconciling two sentences. They are recorded at col. 223 in Hansard of 17th January. The noble and learned Lord the Lord Chancellor stated in the third paragraph:
  "The purposes of the starting rules will be to ensure that cases start in the court where they are most likely to he heard".
  However, in the next paragraph the Lord Chancellor states that, apart from cases where there are family proceedings already pending,
  "we intend to provide by order that, at first at least, applications for care or supervision orders shall be made to magistrates".
  It seems that in the second sentence we are saying that cases will enter into the system at the magistrates' court whereas in the first sentence the Lord Chancellor is saying that the case will start in the court that is most appropriate for it. Will the noble and learned Lord reconcile the two statements, or is there no apparent inconsistency?
  The Lord Chancellor: No doubt the difficulty is partly the result of the language that I used. I was not reading anything. I was trying to explain directly to Members of the Committee what I had in mind. The information that we have suggests to me that most care cases would appropriately be dealt with in the magistrates' court. The process has to start somewhere. Somebody has to decide where the case is to allocated. If the truth is that most cases ought to be tried in the magistrates' court then that is the appropriate place to start the case, because it means that one will minimise the amount of movement. It is very difficult to provide criteria that would not be operated by someone within the system. We have in mind that the cases would start there. If they satisfy criteria for being moved up, they will then immediately be moved up to the court to which they ought to go. They will then proceed from there.
  The reason that we choose the magistrates' court as the court from which to start is because the magistrates' court is the court where the majority of the hearings are likely to occur. That is the reason I put it in that way.
  I entirely agree with the noble Lord. As he read it to me, the matter required elaboration. However, that is what I have in mind. I hope that I have made the position clear now. It does not mean that in relation to a particular case I can make such detailed arrangements as that, because somebody has to operate these criteria. They will not be self evident. If we were able to identify the cases—for example, if it
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  were every third case—that would be easy. But it has to be done by reference to complexity. We shall try to give as much guidance detail as we can, but it will have to be applied by some authority. Most cases would appear to be suitable to be heard in the magistrates' court. Then, by reference to criteria, the cases which are suitable for a hearing in a higher court will be sent up. I hope that that is sufficient an explanation.
  Lord Prys-Davies: Is the position that every case will automatically enter the system at magistrates' court level? Then a decision will be taken by an authority—perhaps the clerk to the magistrates, or the magistrates' court itself—whether or not that case is to be transferred upwards?
  10.15 p.m.
  The Lord Chancellor: That is so. It is by reference to criteria that we shall lay down as fully and in as much detail as seems practicable. We may have to modify these criteria in the light of experience. This is a new departure but it is one which I believe is welcome. Not all care cases are to be heard before the magistrates although some are at present. That is one of the difficulties about the present system. This is an advance on the present system which we hope we shall be able to improve as time goes on. We are making a start, the very best we can, but it may still require to be improved. The noble Lord has described accurately what I have in mind.
  Baroness David: I thank the noble and learned Lord for his further explanation which I am quite sure that my noble friend will be pleased to read. I agree with the noble Lord, Lord Meston, that it is a pity that we do not have the government amendments to this clause. Indeed I read in the Notes on Clauses to Clauses 70 and 71 that there are to be further amendments. We may not even have those at Report stage or Third Reading here. I do not know whether the noble and learned Lord can tell us whether we shall have those amendments by the next stage. We very much hope that we shall do so.
  The Lord Chancellor: All I can say is that I shall do my best, but as a practical matter the alternative is to lose the Bill altogether, until we gather everything together that came from that consultation. Much of that work has followed. We had to find out what Lord Justice Butler-Sloss had to say before we could issue that consultation paper. This is our opportunity. We could have left out the jurisdictional questions altogether, which is what I originally said when I was asked about this a long while ago. I suggested that we should try to get the substantive law right and then make the jurisdictional improvements. I now see an opportunity to do both. I hope that the Committee will have sympathy with that aim. We cannot create it immediately because it is a difficult structure, but the noble Baroness may take it that I shall do my best to get as much forward to the Committee as I can, but I cannot promise, because of the detailed work involved, to get it right. We must consult many people about it, but I hope that we shall be able to have it all ready in time for the final stages in this Chamber.
  Baroness David: I thank the noble and learned Lord for his further reply.
  Lord Prys-Davies: Will the Lord Chancellor confirm what he had in mind when he said in col. 223 that it is the intention to provide by order that at least at first applications for care should be made to the magistrates? Does that mean that when the new procedure comes into existence, that is the way in which it will be seen at first, but that in the light of experience it may be subject to modification?
  The Lord Chancellor: That is precisely right. I believe from information that I have that most cases will be appropriately dealt with in the magistrates' court at that level—the domestic panel level. But we do not have an analysis, in as much detail as I should like, which would enable us to say that with absolute confidence. Once the system is in operation it will be seen perhaps that 60 per cent. of the cases will be taken in the county court. If that is right that is the place where they should start and then make allocations out. We need to minimise the number of transfers and to do that we need to start them at the place where most of them are heard. That is the principle we are working on.
  Baroness David Baroness David: I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 217 not moved.]
  Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 218:
  Page 60, line 33, after ("by") insert ("regulation make").
  The noble Lord said: By leave, I speak also to Amendments Nos. 219 and 225. The connection between Clauses 69 and 71 is frankly acknowledged at Page x of the Explanatory and Financial Memorandum under the heading "Financial Effects of the Bill" and it is avowedly financial, pure and simple:
  "Increased court and legal aid costs will … be partly offset by … limiting access to wardship (clause 71)".
  That is what it is all about. Rules of court under Clause 69 will allocate cases with financial considerations in mind. Let us remember that that is the name of this game.
  There is considerable concern within the profession that the rules under Clause 69 will unduly restrict access to the High Court. There is also concern that the rules under Clause 69 will allocate cases to the magistrates' court. I heard the exchange between my noble and learned friend the Lord Chancellor and the noble Lord, Lord Prys-Davies. The concern is that such cases ought more properly be heard in the county court or the High Court.
  Defining the criteria by which a case should be moved up is a far more difficult task than leaving it to the discretion of an experienced registrar. In the magistrates' court, where the process will start—perhaps subject to criteria which are difficult to define—there are no affidavits, no statements of witnesses and no means of knowing what are the issues and the evidence that will be called.
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  To meet those matters of concern to which I have referred, there are three proposals. First, there is the proposal in Amendments Nos. 218 and 219 to ensure that the rules of court shall be made by resolution so that in accordance with Clause 76(2) they shall be subject to a negative resolution of Parliament. Separate from that is the desire or intention to which I referred on Second Reading. It is to remove the provision under Clause 69(4) that the rules may be made only with the agreement of the Secretary of State. At that stage my noble and learned friend expressed sympathy for a concession.
  Thirdly, there is the proposal under Amendment No. 225 to substitute in place of Clause 69(4) a provision which would enable an application for transfer to be made which would be subject to the limited appeal applicable to any mere exercise of judicial discretion.
  As regards the removal or excision of Clause 69(4) as it stands, my noble and learned friend has already expressed sympathy with a view to clarification. On Amendment No. 225. I canvass his understanding and sympathy in view of the fact that, as a rule, the applications are intended to start in the magistrates' court (which is a matter of concern) and that it is experimental. It would therefore considerably allay the concern if proper machinery were devised to enable applications for transfer to be made to the specified court.
  The subject of the rules is a technical issue and I do not wish to detain Members of the Committee further at this hour. In general, the problem is that, as regards financial grants, the profession is concerned that resort will be had to the magistrates' court where more properly in the interests of the due administration of justice resort should be had to the county court or the High Court. I ask my noble and learned friend to meet that problem. I beg to move.
  Lord Mottistone: As a non-lawyer, and a total ignoramus in this sphere, I find in this clause and in many others reference to the rules of court which will establish facts which one would normally expect to find established by regulation. Is there any machinery by which Parliament has a hand in the rules of court being agreed to or not agreed to, or does it just happen? I believe that my noble friend is trying to turn this matter into a regulation. This is not the only part in this Bill in which my noble and learned friend. whom I trust implicitly—but I would not necessarily trust his successors nearly so well—will produce rules which would not necessarily be agreed to by Parliament at any stage. It seems to me that we are rather throwing matters away if we agree to this. I should be grateful if my noble and learned friend could clarify that issue for me.
  Lord Meston: I share the concern of the noble Lord, Lord Campbell of Alloway, in this respect, and join in hoping that the noble and learned Lord the Lord Chancellor can do something to allay his fears, even at this hour. If the magistrates' court is to be the point of entry—and that in itself is a matter of concern—will there be provision for the advance disclosure of documentation to enable those who have to make the decision about the appropriate forum for the case to make it properly and to

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  crystallise and identify the issues? That does not happen at present in those cases. Will there be a mechanism for an appeal from the person in the magistrates' court who has to make the decision as to the appropriate forum for the ultimate disposal of the case? Those are matters of considerable concern.
  The Lord Chancellor: Perhaps I can deal with all of those matters generally without referring to particular amendments. First, as regards Clause 69(4) I have explained the reason for that being in the Bill and I am happy to agree that it should be taken out by an appropriate amendment. I believe that an amendment in the name of the noble Lord, Lord Irvine of Lairg, achieves that, and I should be content with that. That disposes of that matter.
  As regards the point about rules of court and regulations, I believe that that is a question of how matters are carried out. Statutory instruments are under the control of Parliament. I consider that at least in part, the provision in Clause 69 should be dealt with by regulations and, therefore, I go along with my noble friend Lord Campbell of Alloway to some extent. Purely procedural matters are best dealt with by rules of court and, for example, the concerns which the noble Lord, Lord Meston, has about procedures in the magistrates' court would be encompassed by rule. For example, the Bill already provides that a statement of what are the proposals for the child and so on must accompany the application. We intend to build on that.
  The noble Lord, Lord Campbell of Alloway, spoke of experiment. I believe that we need to try to build on to the existing structures something which will work and which will give a good system for dealing with this sort of case. I explained to Members of the Committee earlier that I believe that we have the capacity within the framework of this Bill to develop those procedures and, if they work well, to extend them in due course.
  The other matter that I believe has been mentioned concerns notification and appeal. The point that I must make is that the transfer arrangements would certainly provide scope for those interested in the case to make their views known, and we intend to provide an appeal provision against the decision on the level of court at which the case is to be heard. Therefore, all these matters about which concern has been expressed will be addressed.
  To summarise, as regards regulation at least some of what is dealt with by rules of court under Clause 69 as it stands might more appropriately be dealt with by regulation and I propose to address that point. As regards Clause 69(4), I am happy that it should disappear from the scene. As regards developing procedures to enable the views of the parties to be obtained and appeal rights to be provided, that work is in hand. I think I have answered the main matters that have been raised.
  10.30 p.m.
  Lord Campbell of Alloway: I am extremely grateful to my noble and learned friend, first, for taking the point on Clause 69(4) that I raised at Second Reading and the excision of that clause by an amendment
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  which was tabled subsequently by the noble Lord, Lord Irvine of Lairg. Secondly, as regards the regulations, I am wholly content that my noble and learned friend, having taken the substance of the point, should deal with it as he thinks fit on the basis of such advice as he receives.
  On the question of transfer, again I am more than content that, having taken the substance of the point, my noble and learned friend, on advice, should deal with that. After all, it is experimental and provisions must be fairly elastic.
  I can only again thank my noble and learned friend the Lord Chancellor for taking all three points. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 219 to 223 not moved.]
  Baroness David Baroness David moved Amendment No. 224:
  Page 60, line 44, leave out subsection (4).
  The noble Baroness said: I understand that the noble and learned Lord is willing to accept this amendment. I beg to move.
  The Lord Chancellor: I explained why subsection (4) was included in Clause 69. I have been able to consider the matter with others who are interested and am happy to omit the subsection. Therefore, I accept the amendment.
  On Question, amendment agreed to.
  The Deputy Chairman of Committees: I cannot call Amendments Nos. 225 and 226.
  [Amendments Nos. 225 and 226 not moved.]
  Clause 69, as amended, agreed to.
  Clause 70 [Procedure]:
  [Amendment No. 227 not moved.]
  Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 227A:
  Page 61, line 1. leave out subsection (1) and insert—
  ("(1) Anyone whose legal position could be affected by the proceedings and anyone who is permitted to seek and is seeking legal responsibility for the child in the proceedings shall be able to be a party to the proceedings.
  (1A) In relation to a child under 16 years of age the court shall be able to seek the advice of a welfare officer or guardian ad litem as to whether it would be in the child's interests to be made a party to the proceedings.
  (1B) Rules of Court may make provision as to the persons to be given the opportunity to make representations to the court hearing the proceedings.").
  The noble and learned Lord said: Clause 70(1) relating to procedure provides that:
  "Rules of court may make provision as to the persons entitled to participate in proceedings under this Act, whether as parties to the proceedings or by being given the opportunity to make representations to the court hearing the proceedings."
  The intention of Amendment No. 227A is to ensure that party status is specified in the Bill rather than be left to be dealt with by rules of court as Clause 70 currently provides. In our submission party status is too important a matter to be dealt with in secondary legislation so the amendment goes rather wider and to a more significant level than the earlier discussion.
  The amendment follows the recommendation of the Government's White Paper on the law on child care and family services, which I need not quote. It is the case that it is equally applicable to the whole of family proceedings as to care proceedings. That is the purpose of subsection (1) in my amendment. Subsection (1A) seeks to give the court some assistance when deciding if a child should be made a party to proceedings. A welfare officer or a guardian ad litem would be able to assist a child's capacity to understand the proceedings and the extent to which the child's interests, wishes and feelings require separate representation.
  In those circumstances we provide in the amendment that as regards a child under the age of 16,
  "the court shall be able to seek the advice of a welfare officer or guardian ad litem as to whether it would be in the child's interests to be made a party to the proceedings."
  Subsection (1B) of the amendment states:
  "Rules of Court may make provision as to the persons to be given the opportunity to make representations to the court hearing the proceedings.")"
  The most important part of the amendment is clearly subsection (1).
  Lord Meston: I support the underlying intention of this amendment and speak to it in connection with our Amendments Nos. 228 and 229 which, I believe, have effectively the same purpose. We feel some concern at the fact that yet again Clause 70 is a rule-making provision and one in which it is difficult to have confidence when what is to come is unknown.
  We seek to ensure not only that the child should be properly represented in all proceedings, but also that the status of other parties and in particular that so hard-won through the Children and Young Persons (Amendment) Act 1986 should not be lost by the manner in which the rules are to be brought forward. I hope that the noble and learned Lord can give us the reassurance that we require.
  The Lord Chancellor: I believe that the detail of this matter should be left to the rules of court. The first branch of the amendment is in a sense expressing a general principle which one would give effect to in the rules. The phrase,
  "whose legal position could be affected by the proceedings"
  is not, as I am sure the noble and learned Lord recognises, a very precise phrase. Even if it were there would need to be some power in rules of court to specify how it was to work. As regards the proposed subsection (1A) I believe that power to be already covered by Clause 6 of the Bill which gives a general power to use welfare reports and to ask for them. As regards subsection (1B), Clause 70 as it stands appears to provide for the matter.
  Again, in the amendments put forward by the noble Lord, Lord Meston—Amendments Nos. 228 and 229—the general provisions are of importance. There is considerable scope for substance in subparagraph (e). In the ultimate result I am not sure that much is added. I hope I have already made it plain that in care proceedings we would provide that the child would be a party in every case. Persons having parental responsibility for the child would
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  normally be parties in the proceedings. In care proceedings we have required that, generally speaking, the application would be one by the local authority, though my noble friend's correspondent would hate to say "his client". But at least those whose interests he has advocated in this Chamber are authorised in that connection.
  Subparagraph (e) says:
  "the applicant in the proceedings, where he is not the child nor a person having parental responsibility for the child nor the local authority".
  It would seem queer to have proceedings that did not have the applicant as a party. I should have thought that it was hardly necessary to say that. These are matters for consideration in detail. We would certainly expect to give effect to the general spirit of the amendments in the rules to provide for party status. In the light of those considerations, I hope that the noble and learned Lord will feel able not to press the amendment.
  Lord Elwyn-Jones: The language used in the amendment—
  "Anyone whose legal position could be affected by the proceedings"—
  is taken from the Government's White Paper Law and Child Care and Family Services. Paragraph 55 provides:
  "The Government recognise the advantages of involving in the proceedings anyone who has a proper interest in the child's future and his welfare. Some movement will be made in that direction by the Children and Young Persons (Amendment) Act 1986 under which a parent or grandparent can in certain circumstances he made a party to the proceedings in addition to the child and the applicant. That change in the law removed the more obvious shortcomings of the present arrangements. For the future, the position will be further improved. Anyone whose legal position could be affected by the proceedings will be entitled to party status".
  It was to that statement in the White Paper that my amendment was partly directed. This matter clearly needs to be looked at again. It is one of some importance because the right to party status is crucial in these proceedings. However, in the circumstances, I ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 228 to 230 not moved.]
  Clause 70 agreed to.
  10.45 p.m.
  Clause 71 [Transfers between England and Wales and Northern Ireland, the Channel Islands or the Isle of Man]:
  The Deputy Chairman of Committees (Baroness Cox): I should point out that if Amendment No. 231 is agreed to I cannot call Amendment No. 235.
  Lord Meston Lord Meston moved Amendment No. 231:
  Page 61, line 9, leave out subsection (1).
  The noble Lord said: The name of the noble Lord, Lord Irvine of Lairg, appears at the head of the amendment. I was somewhat relieved to think that he might move it and the other amendments which concern Clause 71. That relief gave way to dismay when I realised that he would not be here this

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  evening. My dismay increased when I realised that this series of amendments relating to Clause 71 which has caused considerable concern to family law practitioners would be debated so late at night.
  The clause has caused great concern to all who have tried to think through its implications. Clause 71 proceeds on the hypothesis that local authorities need not resort to wardship jurisdiction as the new statutory code for care proceedings to be introduced is precise and comprehensive. No doubt the draftsman has tried to be both, but it is wishful thinking—I was going to use a less polite phrase—to believe that the statutory code will ensure either situation, even if Clause 26 were faultless, and I suggest that Clause 26 (the statutory code for care proceedings to be introduced) is not faultless. The Bill repeals grounds for care proceedings which were introduced in the 1969 Act, and they in their time were no doubt considered to be impeccably drafted by those responsible. The ensuing 20 years have shown how wrong one can be.
  The point to be mentioned in relation to Clause 71 is perhaps the wider point of concern. The value of the wardship jurisdiction is something that is hard to describe, but it is readily appreciated by all those who practise in that jurisdiction. It allows a thorough and sensitive hearing, usually by a High Court judge, with advocates of specialised expertise who all treat their task as one of great seriousness and importance for the child or children concerned. It is a jurisdiction which is valued by local authorities not only for the expertise of the forum but for the authoritative decision which is produced and the guidance which the courts can provide in individual cases.
  The best indication of the value of the wardship jurisdiction is shown in the Cleveland report, which of course advocated the retention of the wardship jurisdiction. There is no evidence that local authorities under the present regime unnecessarily invoke the wardship jurisdiction. It is flexible. It is therefore a jurisdiction which should not be discarded unless we are absolutely sure that it serves no useful purpose. It has developed over the years to cover events which were not envisaged. For example, it has developed in recent years to deal with cases in which there is grave concern for the child, in circumstances which do not fit easily into the existing statutory code; for example, cases in which sexual abuse cannot be proved to a suitable standard and yet a court has sufficient concern for the child to feel that there is an unacceptable risk that sexual abuse will occur in the future.
  It is a misapprehension to think of the wardship jurisdiction as something of a fifth wheel to the wagon. If the Government are right in the hypothesis on which the clause is based, then the wardship jurisdiction will diminish naturally and there is no need for the severely restrictive provisions of the clause.
  The courts would not allow the wardship jurisdiction to be exercised improperly, but we should be careful before we allow the children to come before the courts to be deprived of the traditional protective role of the High Court in its wardship
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  jurisdiction, a role which enables the court not only to make a decision as to what has happened, factually in the past, but to give directions for the future, long term and short term, and to provide a measure of oversight for the child or children concerned.
  There are a number of points of detail in relation to Clause 71 which I had intended to invite the noble and learned Lord to deal with, but I do not think it is appropriate at this hour to go into further detail. I hope he will have read, or will have the opportunity to read, some of the serious representations which I know have been made to him on this point and also, for example, to read the article in last week's New Law Journal, which raised a number of detailed points which involve questions of how appropriate it is to restrict this extremely valuable traditional jurisdiction of the High Court in these cases. As I say, it is not appropriate to develop the argument further on this point. Nevertheless, I beg to move.
  Lord Mottistone: I agree with a lot of what the noble Lord, Lord Meston, has said. There has been—if I may talk a little generally—a good deal of criticism about the increasing number of wardship proceedings used by local authorities. In some cases, it is probably true to state that the cases could have been resolved elsewhere and that the use of wardship has been inappropriate. However, wardship proceedings provide a valuable safety net for children and the expertise and experience of High Court judges has proven to be very useful in resolving difficult cases.
  As Clause 71 is currently drafted, it is difficult to imagine in what circumstances wardship proceedings could be used. Even if a local authority or other interested parties were granted leave to apply, the jurisdiction is to be so restricted that it appears the court would be unable to determine a remedy. It is questionable whether the statutory codes are flexible enough to compensate for the restriction of the jurisdictions proposed in the Bill, and in this clause in particular.
  I should like to say a little about Amendment No. 236 which is linked with this first group of amendments in my name. The amendment seeks to remove subsection (2) from the clause. That subsection severely restricts the exercise of the High Court's inherent jurisdiction with respect to children. If this subsection were to remain, the High Court would find it difficult to resolve issues brought before the court, particularly issues arising in connection with the aspects of parental responsibility for the child.
  There seems to be little point in retaining the inherent jurisdiction if the court is unable to direct that a child be placed in local authority care or be accommodated by the local authority. Perhaps this subsection would still allow for such matters as deciding upon, for example, sterilisation. However, the application should remain much wider.
  Social workers dealing with the day-to-day problems of abused children are most concerned that the High Court's jurisdiction is not so curtailed as it would be in this subsection (2). Experience has shown that the powers available to the High Court are most

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  useful in the sensitive resolution of complicated cases which is, in part, what the noble Lord, Lord Meston, said. Indeed, I hope that my noble and learned friend will find a way of either reducing the effect of Clause 71 or possibly even of getting rid of it altogether.
  Lord Campbell of Alloway: This is not really the time to go into too much technical detail, but subsections (1) and (2) of Clause 71—I merely say this for the sake of the record—raise totally disparate problems which perhaps my noble friend Lord Mottistone could reconsider between now and Report.
  Clause 71, as such, as my noble and learned friend the Lord Chancellor has already observed, interacts on other clauses of the Bill. In particular, it has an effect on Clause 22 as regards the establishment of a satisfactory complaints procedure to which I spoke on Amendment No. 113. At the outset—and I support the amendment—it is accepted that the practice of resort to wardship, to which my noble friend Lord Mottistone correctly referred, in lieu of the complaints procedure as an indirect method of challenging certain decisions of the local authority, is unacceptable.
  It is also accepted that forum shopping as between the magistrates' court and the High Court is unacceptable and an abuse of the process of the court, but it achieves the result by overkill. There is no case whatever for the removal of wardship as proposed by Clause 71(1) save on financial grounds, again referred to at page 10 of the financial memorandum, where it is expressly and avowedly financial. The Committee can see it stated with a reference to Clause 71.
  What are the effects? First, the High Court would no longer have power to place a ward of court in care or under supervision of a local authority in the exercise of its inherent jurisdiction. Secondly, a local authority could not apply for a residence order or a contact order—that is, the care and control and access orders. A local authority would be permitted to invoke the inherent jurisdiction of the court only for a care order as provided by Clause 26, and then only if the local authority can satisfy the court that the child will suffer significant harm. A significant risk of abuse or harm would not appear to suffice.
  In the result—let us be practical—to give but one example, if a parent of a child who has been in voluntary care for some time threatens to remove the child, the local authority will no longer be able to issue a wardship summons to contain the sitution. As has been said by other noble Lords, there are always novel, distressing, urgent and exceptional cases in which the flexible and adaptable process of wardship may be the only means to provide an appropriate and immediate provisional resolution in the interests of the welfare of the child.
  The recommendations of the Butler-Sloss report, to which I referred at column 507 on Second Reading, are that wardship should be retained, if not extended. The only apparent justification for rejecting the Butler-Sloss recommendation would appear to be financial and administrative in context with the rules of court to be issued under Clause 69
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  or regulations, as the case may be. If the interests of children are truly at stake, that is no justification at all to support this amendment.
  The Lord Chancellor: There appears to be a certain amount of misunderstanding about Clause 71. Clause 71 does not proceed on the basis that the code in the Bill is complete. Rather, Clause 71 provides that the inherent jurisdiction of the High Court cannot be used as an alternative to a care or supervision order. That is what it says. It does not say that it cannot be used at all, but it cannot be used as an alternative procedure for a care or supervision order. The situation is that if one wants a care or supervision order one has to satisfy the statutory criteria. In my submission, that is perfectly right.
  Clause 26 of the Bill provides protection for the integrity and independence of families from unwarranted intervention by the state in the guise of local authorities by specifying detailed conditions which must be fulfilled before a care or supervision order may be made. Similarly, in Part V of the Bill the conditions and procedures for the making of emergency protection orders have been carefully designed to enable children to be effectively protected but to prevent the lives of children and their families being interfered with and disrupted unnecessarily.
  There is nothing in that that restricts the wardship jurisdiction of the High Court, except to provide that it cannot be used as an alternative to these procedures. We looked at the basic arrangements for this in detail when we went through the clauses. It is quite wrong to suggest that we are destroying the wardship jurisdiction of the High Court altogether. We are saying that the inherent jurisdiction of the High Court, with the leave of the court, in situations which are not covered by care and supervision will be available, subject to what subsection (5) says.
  11 p.m.
  Lord Campbell of Alloway: Will my noble and learned friend permit me to intervene? I am most grateful. I wonder whether he will take on board that the construction which I advocated is held quite widely in the profession. Of course I accept the view of my noble and learned friend when he says that the intention is as he has stated. Would it be possible to clarify the drafting so as to ensure that there is no room for misapprehension and that it is only to ensure that it is not an alternative to care?
  The Lord Chancellor: Obviously there may be something which could be improved upon, but Clause 71(1) says:
  "Section 7 of the Family Law Reform Act 1969 (which gives the High Court power to place a ward of court in the care, or under the supervision, of a local authority) shall cease to have effect".
  In other words, it is provided there that putting a child in care shall not be a power available in wardship proceedings. It is a power which will have to be exercised in accordance with the statutory requirements for care or supervision, as set out in the Bill.
  The effect of subsection (2) is in line with the same point. It may he that some people have

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  misunderstood, but if they look at it again in that light they may see that that is what the Bill requires. It cannot be right that local authorities should be able to circumvent these carefully thought out and carefully enacted provisions by simply making a child a ward of court. Once a child is warded, the High Court would have a wide discretion to make whatever order it thought fit, including an order placing the child in the care of or under the supervision of the local authority, subject only to the very general provisions in Clause 1(1) of the Bill that,
  "the child's welfare shall be the court's paramount consideration".
  in determining any question with respect to the child's upbringing. We clearly want to make sure that that point is covered.
  To take the example given by my noble friend—or perhaps it was the noble Lord, Lord Meston—if a parent threatened to remove a child who had been in long-term foster care, that would certainly give grounds for a care order if it were likely to result in significant harm and the removal would not be a reasonable exercise of parental care.
  Members of the Committee will see that subsection (5) of Clause 71 says that the subsection applies to any order,
  "made otherwise than in the exercise of the court's inherent jurisdiction; and … which the local authority is entitled to apply for (assuming, in the case of any application which may only be made with leave, that leave is granted)".
  The purpose of that is to ensure that where the statute has provided a way of doing it, that way must be used. That is all. I venture to think that perhaps some of the difficulty which is anticipated in the profession is not justified by the language of the clause. In the light of those considerations, I hope that the noble Lord may feel able to withdraw the amendment.
  Lord Meston: I am very grateful for the support I have received both from the noble Lord, Lord Mottistone, and from the noble Lord, Lord Campbell. I am particularly grateful to the noble Lord, Lord Campbell, for supplementing what I inadequately sought to express, and in particular for giving examples which I had not given of some of the situations which are giving cause for concern. It was never suggested by me that this clause seeks to destroy the wardship jurisdiction.
  It is suggested by me, however, that it is a clause which undervalues the wardship jurisdiction. It is unnecessarily restrictive. To use the expression of the noble Lord, Lord Campbell of Alloway, it is "overkill". Particularly restrictive is the combination of this clause and Clauses 81 and 84.
  This is a Bill the provisions of which, as the noble and learned Lord the Lord Chancellor indicated earlier today, should last for a long time. It is therefore particularly important that we get it absolutely right in so far as we are able. This is a matter to which I wish to return at a later stage. In the meantime, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 232 to 234 not moved.]
  Lord Campbellof Alloway had given notice of his intention to move Amendment No. 235:
  Page 61, line 11, at end insert ("but without derogation from the right of any interested person to apply to the President of the Family Division for leave to issue wardship proceedings").
  The noble Lord said: In effect I have spoken to the principle behind this, to save time, on Amendment No. 231. I only ask respectfully that my noble and learned friend the Lord Chancellor should take this on board as a possible alternative way of avoiding the overkill. It is not as draconian as removing Clause 1. I spoke to the whole merits on Amendment No. 231 and, therefore, in the hope that my noble and learned friend may consider the position, I shall not move the Amendment.
  [Amendment No. 235 not moved.]
  [Amendments Nos. 236 to 240 not moved.]
  Lord Mottistone Lord Mottistone moved Amendment No. 240A:
  Page 61, line 21, leave out subsection (3) and insert—
  ("(3) Upon the application of any interested party, the High Court may exercise its inherent jurisdiction with respect to children.").
  The noble Lord said: I shall speak briefly to this amendment, which is in the next group of amendments starting with Amendment No. 240. This amendment seeks to ensure that any interested parties are able to apply for wardship proceedings. This should be explicit within the legislation.
  In 1986 local authorities issued 1,845 of the 3,399 originating summonses. This leaves over 1,500 applications by other parties. Children, grandparents, parents and others felt the need to use wardship and obviously will continue to do so. It would be sensible to recognise this within the Act, although this really refers to common law rights.
  I make that point only against what my noble and learned friend said earlier, to ask that in looking at this again, which I trust he will, he makes sure that other people apart from local authorities are in his mind. I also ask that he should consider a different title for the clause, which has unduly alarmed people when really he is trying to adjust the use of wardship jurisdiction in view of the nature of the Bill. I suggest to my noble and learned friend that that may help. I do not propose to proceed with my other amendments to this part at this stage because, to a certain extent, part of the reason for asking my noble and learned friend to look again at the precise wording of the Bill is to ensure that people understand clearly what it is about. I beg to move.
  The Lord Chancellor: I am not absolutely clear what is intended by the amendment. If the idea is that anyone could apply and be heard without the leave of the court that would appear to be a rather wide provision. I find it difficult to see precisely what the effect would be. I am grateful for the remark about the side note. That is not part of the Bill but is perhaps a point that needs thought.
  I think that it ought to be clear that there is nothing in the Bill to restrict the use of wardship by private individuals. Apart from limiting the use of wardship by local authorities we have postponed reviewing wardship itself until we see how the Act works. To

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  some extent that deals with the point made earlier by the noble Lord, Lord Meston. The purpose of the provision is to make sure that wardship is not used as an alternative to the statutory jurisdiction. I hope that in the light of those remarks the noble Lord will feel able to withdraw the amendment.
  Lord Mottistone: I thank my noble and learned friend for that reply. We shall think about all the amendments in the group before the next stage of the Bill, but at this stage I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 241 to 245 not moved.]
  11.15 p.m.
  Baroness David Baroness David moved Amendment No. 245A:
  Page 61, line 36, at end insert
  ("(6) The court may grant leave—

  (a) for a ward of court to be appointed a full party to the proceedings and

  (b) for a ward of court to represent his own interests and choose his own solicitor, without a guardian ad litem being appointed on his behalf.

  (7) The court may only grant leave under subsection (6) of this section if satisfied that the child has sufficient understanding to instruct a solicitor and wishes to do so.").
  The noble Baroness said: The amendment would allow wards who are competent to be parties in their own right with legal representation of their own choosing. It seeks to end the present unfair position in wardship whereby wards are never parties in their own right but, when they are joined as defendants, are represented through a guardian ad litem—usually the Official Solicitor—who does not act on their instructions.
  The Children's Legal Centre has received a number of complaints about that system from wards and those concerned about their welfare. The centre has also been aware of a high level of dissatisfaction among the legal profession with the role of the Official Solicitor. However, lawyers undertaking High Court case work oppose the Official Solicitor at their peril. Any questioning of his department's work is always rejected and the critic rebuked. It is therefore not in clients' interests to attack, or even cross-examine, the Official Solicitor.
  The court has the ability to make a ward a party to proceedings. However, because of rising numbers of wardship cases—over 500 children are now made wards in a year—a practice direction in 1982 provided that that should be done only in exceptional circumstances; the norm should be that the child's interests be considered simply through a court welfare officer's report. If the child is made a party—for example, where he or she is the sole defendant or where there is some very complicated aspect to the case—the High Court ruled (Re JD, 1984) that the Official Solicitor should normally be appointed as guardian ad litem. If someone else wished to act as guardian ad litem the matter should be considered by a judge, not a registrar.
  The duties of the Official Solicitor are summed up in a letter sent by him to a client of the Children's Legal Centre:
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  "My duties as your guardian ad litem are to represent you in wardship proceedings and to endeavour to safeguard your best interests, taking account of your expressed wishes. This does not, however, impose on me the same obligation as a normal solicitor taking instructions from a client, as I am sure you will be able to imagine circumstances in which a child on whose behalf I am acting expresses views which it will be impossible for me to act upon".
  Although the Official Solicitor acts in terms of the child's best interests, not the child's instructions, he is not professionally qualified to assess those interests. The Official Solicitor is himself a solicitor but he employs a staff of—in his own words—"career civil servants". In an interview given in 1982 he goes on to say:
  "While I try to choose 'horses for courses' in assigning them to their duties, I cannot claim they are, nor would I wish them to be, hand picked for dealing with children's cases. I emphasise this as I feel that the courts already have available a vast fund of professional expertise in wardship and my staff can sometimes bring the unfettered approach of the man or woman in the street to the problems of these cases".
  The recommendation of the Official Solicitor has a powerful influence with the wardship judge. However, the standard of his reports is often weak and compares badly with the work of guardians ad litem in care proceedings, who are professionally qualified social workers. Lawyers, including those on the Law Society Child Care Panel, are often frustrated by lack of judgment or failure to consider important factors in the Official Solicitor's report. However, it is a rule of practice in the wardship court that the writer of the Official Solicitor's report is never subjected to cross-examination.
  In other words, the Official Solicitor tries to do two jobs simultaneously—the job of a solicitor and the job of a court welfare reporter—and does neither of them well. He has two conflicting roles: the role of the inquisitor investigating the "best interests" issues of the case, and that of the advocate. The impossible contradictions between those two roles may have disastrous consequences for the child.
  The children's centre knows of examples of cases where the Official Solicitor felt unable to act on the instructions of the ward. For example, there was a case where a young person was locked up in secure accommodation and wished her placement to be opposed. Unfortunately, because she was a ward she did not have an advocate as the Oflicial Solicitor supported the professional view that she should be locked up. Had she had any other legal status in care she would have been able to instruct a solicitor to represent her wishes.
  In another case a 13 year-old ward wished to live with her mother who had muscular sclerosis but she was placed with her father. She appealed to the Official Solicitor. He sought advice from a psychiatrist who, although observing that the "current situation was fraught", recommended that it was important for the girl's,
  "adolescent development that the adults stand firm in terms of the arrangements that have been made and help the children with the inevitable painful feelings that follow".
  The Official Solicitor followed that advice—not the girl's instructions—and did not recommend a change in placement to the court. Only after the girl ran away and sought assistance from private solicitors was she able to live with her mother.

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  Where momentous decisions are being made about an older child's life, such as deprivation of liberty or separation from a preferred parent, it is obviously unfair that they do not have a right to legal representation of their own choosing. It is also in breach of Articles 6 and 14 of the European Convention on Human Rights. Article 6 provides that in determination of civil rights:
  "everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law".
  Cases on this point have ruled that this should include access to a solicitor of choice. Article 14 provides that:
  "the enjoyment of rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race … etc… birth or other status".
  Should children's legal status as wards deprive them of rights to a fair hearing?
  It may be that the wording of this amendment is technically faulty in that in the eyes of the law a ward of court who is represented through the medium of a guardian ad litem may be a full party; but by "full party" we mean a party in his own right, that is, without a guardian. I beg to move.
  Lord Meston: I had not intended to speak but feel in relation to this amendment that I must do so. I do not know the nature of the complaints that have been received about the Official Solicitor's operation in these cases but from my own experience I do not agree with the criticisms of the Official Solicitor, his staff or the reports that are produced. The Official Solicitor and his staff seem to me to serve children extremely well and their reports serve the courts extremely well. The fact that the Official Solicitor does not act simply as a mouthpiece for the child enhances rather than diminishes the role of the Official Solicitor as a guardian ad litem. It does not prevent the Official Solicitor acting as a medium by which the voice of the child is heard by the court in these cases. If that is a matter which is to be removed by this amendment, it is an amendment which I could not possibly support in this form.
  The Lord Chancellor: I explained in answer to an earlier amendment that we are not seeking to review the wardship situation in this Bill because the Law Commission recommended that the Bill should be put in place, the wardship jurisdiction should be retained, and then considered in the light of the position when the Bill is in place.
  On the detailed matters, the remarks of the noble Baroness are along the line that we discussed when we spoke about secure accommodation. I understood what she said then. The Official Solicitor is an official under the direction of the Lord Chancellor. Therefore I would find it very difficult to accept criticism of him which was not vouched for in a very detailed way. He is obliged to act under the directions of the Lord Chancellor. I therefore have responsibility for his activities. The noble Lord, Lord Meston, who practises to a considerable extent in this area, speaks on this matter with personal experience. However, I do not think it would be appropriate to go into the detail of the general wardship jurisdiction
  568
  and the procedures under which it operates in this Bill.
  The role of the Official Solicitor in care proceedings—which will be in the High Court now for the first time—is under consideration. Members of the Committee will remember that there was a question—I think by my noble friend Lord Campbell of Alloway—about whether at each stage a different guardian ad litem should be used and so on. That is under consideration. In family proceedings generally it would be right to look at that.
  This Bill does not attempt to do anything about the wardship situation generally. I doubt very much whether it would be wise to attempt partial incursions into that rather recondite subject.
  Baroness David: Clause 71 deals with wardship. It therefore did not seem totally wrong to bring this matter forward. On the point put forward by the noble Lord, Lord Meston, I understand that the Official Solicitor is not always the voice of the child, as he suggested he was. However, I shall once again read what the noble and learned Lord has said. In the meantime, I withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 71 agreed to.
  Clauses 72 and 73 agreed to.
  Clause 74 [Reporting officers and guardians ad litem for purposes of Adoption Act 1976]:
  Lord Meston Lord Meston moved Amendment No. 246:
  Page 63, line 25, leave out paragraph (b).
  The noble Lord said: Although Amendments Nos. 247 to 251 are different amendments concerned with different aspects of Clause 74, perhaps I may speak to them together on moving Amendment No. 246, to abbreviate matters at this hour of the evening. These amendments ensure that the regulations are seen to provide for the financial independence of guardians ad litem to prevent the possibility of any conflict in the position of the guardian ad litem who—although meant to be representative of the child whose future is being considered by the local authority—is also a person who is directly or indirectly an employee of the local authority.
  It has struck a good number of organisations that that is an undesirable position. It is therefore the purpose of this body of amendments to endeavour to remove the dependence of guardians ad litem on the local authority in financial matters. I am conscious of the fact in the way these amendments are framed that the power to make regulations is simply permissive. The objective of the amendments may be achieved by some more convenient method, other than by trying to alter or modify the regulation-making power. I hope that the point of this group of amendments is sufficiently clear to enable the noble and learned Lord to respond to them. I beg to move.
  Lord Prys-Davies: I should like briefly to support these amendments. The criticisms we hear of the guardian ad litem panel and arrangements point to the need to strengthen the independent status of the

  569
  guardians ad litem. It seems to us that the Bill does not really face up to the issue. The question is: how can the independence of the guardians ad litem be enhanced? How can they become independent of local authorities? The amendments of the noble Lords, Lord Meston and Lord Banks, seek to achieve this by severing the connections with the local authorities specifically provided for in four of the paragraphs and by introducing the need for co-ordination and the establishment of national professional standards which are mentioned in the last paragraph. For those reasons we wish to support the amendment.
  The Lord Chancellor: These amendments are practically identical with Amendments Nos. 183 to 188 which were proposed for Clause 36 in relation to guardians ad litem in care and related proceedings. Clause 74 with guardians ad litem and reporting officers in adoption proceedings and the points which I made in reply to Amendments Nos. 183 to 188 apply here too.
  The problem is that we have an existing system set up comparatively recently upon which we must build. The method by which we are seeking to secure even greater independence than exists at present is to give the Secretary of State power to allow associations of local authorities to provide panels. In that way one will be able to take out of the panel dealing with a case in local authority a person who is not provided by that local authority but by one of the other local authorities in the association. This goes a good distance towards achieving the independence which is required. I made a number of other detailed points in answer to the earlier amendments which I believe are equally applicable here. Perhaps I might, for brevity's sake, be allowed to hold them as incorporated here.
  Lord Meston: Like the noble Lord, Lord Prys-Davies, we are concerned that the problem of guardians ad litem being seen to be independent has not been addressed. In an ideal world such guardians would operate independently whoever was financially responsible for them. It is not an ideal world. Now is not the time to develop the argument in answer to the noble and learned Lord. I therefore beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 247 to 251 not moved.]
  Clause 74 agreed to.
  [Amendment No. 252 not moved.]
  Clause 75 agreed to.
  11.30 p.m.
  Clause 76 [Regulations and orders]:
  Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 252A:
  Page 64, leave out line 11 and 12 and insert—
  ("(2) Any statutory instrument exercising powers conferred by sections 10, 27, 29(8), 36(9) and (10), 38(8), 43 and 69 must be laid in draft before and approved by a resolution of each House of Parliament.
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  (2A) Any statutory instrument exercising any other power conferred by the Act shall be subject to annulment in persuance of a resolution of either House of Parliament.
  (2B) Any such statutory instrument may—").
  The noble and learned Lord said: The amendment seeks to ensure that the key regulations—which I venture to be the correct description of what is set out—are provisions for which there should be a necessity for inclusion in the Bill, instead of dealing with the relevant proposals as being merely statutory instruments subject to annulment.
  Members of the Committee will see that they are important provisions relating to Clause 10 dealing with the powers of the court to control the timetable of children's cases; Clause 27(3) directed to avoiding delay in disposing of applications; Clause 29(8) dealing with parental contact with children in care; Clause 36(10) dealing with guardians ad litem; Clause 38(8) dealing with emergency protection orders; Clause 43(1) dealing with rules of court and regulations with respect to the emergency protection of children; and, finally, Clause 69 which gives the courts jurisdiction under this Bill.
  The amendment proposes that any statutory instrument exercising the powers conferred by those clauses should be laid in draft before, and be approved by a resolution of, each House of Parliament and not dealt with by the summary procedure which is proposed. They are far too important. I beg to move.
  The Lord Chancellor: This matter is always one of judgment. Where duties are set out in the Bill and only procedural matters remain to be disposed of, I believe that the negative procedure is the proper means of regulation. It is an effective means. Any objection to the matter can be raised; whereas if there is nothing contentious it can be dealt with without involving parliamentary time.
  That is the structure we have attempted to follow in the Bill. I am amenable to looking at particular provisions but this appears to be a reasonable general principle. I hope that in the light of the explanation of the way in which we work the noble and learned Lord will be able to withdraw his amendment.
  There are one or two areas in the Bill where the matter may require further consideration but, generally speaking, that has been our approach and we have endeavoured to give effect to it.
  Lord Elwyn-Jones: I am grateful to the noble and learned Lord. At an earlier stage we considered the substitution of a more satisfactory procedure than the annulment procedure. Perhaps he will reconsider these provisions, which are of great importance, and we can return to the matter at a later stage. In the circumstances I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 76 agreed to.
  Clause 77 [Interpretation]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 253:
  Page 64, line 25, at end insert ("and any reference to a child who is in the care of an authority is a reference to a child who is in their care by virtue of a care order").
  The noble and learned Lord said: The amendment would add to the definition of "care order" in the interpretation clause to make clear the fact that "child in care" means a child in local authority care by virtue of a care order. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 253A:
  Page 64, line 33, at end insert—
  (" "community home" has the meaning given by section 44;").
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 253B:
  Page 64, line 44, at end insert ("and the question of whether harm is significant shall be determined in accordance with section 26(9)").
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 253C:
  Page 65, line 4, leave out ("had") and insert ("has").
  The noble and learned Lord said: This is a minor amendment to change the tense to the appropriate one. I beg to move.
  On Question, amendment agreed to.
  Lord Kilbracken Lord Kilbracken had given notice of his intention to move Amendment No. 254:
  Page 65, line 36, leave out from ("child") to end of line 38 and insert ("has the meaning given by section 57(1);").
  The noble Lord said: I believe it is admirable that there should be listed in this clause for easy reference all the definitions which have already appeared in this Bill. However, I noticed that in the case of "relative" at line 36 the definition which had already appeared in Clause 57(1)(c) was repeated verbatim and I could not see why such an exception was made.
  However, in my absence, the noble and learned Lord moved Amendments Nos. 208A and 208B, which deleted Clause 57(1)(c). Perhaps to ensure that it is not repeated, he has done it that way round. Therefore, it is essential that the definition of "relative" should remain where it is and I do not have to move this amendment.
  [Amendment No. 254 not moved.]
  Lady Saltoun of Abernethy Lady Saltoun of Abernethy moved Amendment No. 254A:
  Page 65, line 38, after ("affinity)") insert (",cousin").
  The noble Lady said: This is a probing amendment. I am rather concerned at the very narrow definition of "relative" in this Bill. The word "relative" appears in Clause 52(4)(a)(iii), Clause 57(1)(a)(iii) and Clause 58(5)(a)(iii). It is the concept of what I believe is called the nuclear family as opposed to the wider family. I fear that that is a concept which is rather prevalent among social
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  workers. It is the result of the loss of contact with relatives in the past by people who moved from their ancestral areas to pursue their fortunes elsewhere at a time when communications were far less good than they are today.
  A child may not have grandparents or they may not be able to take him in or to help very much. If neither of his parents has brothers or sisters he will have no uncles or aunts. However, people with no brothers or sisters are often very close to their first cousins, who would be the first cousins once removed of the child. In such a case, they would probably be very familiar to him and the best people to care for him or do whatever may be required.
  I am conscious that "cousin" may be too loose a definition but I am concerned at the exclusion of cousins such as I have described from this Bill. Perhaps the noble and learned Lord could explain the thinking behind that and consider the desirability of widening the definition to include at least the first cousin once removed, for the reasons I have explained. I beg to move.
  The Lord Chancellor The Lord Chancellor: This point arose originally in relation to Amendment No. 209. That was an intimation provision. This perhaps depends on the particular context in which these matters arise. However, the problem is, as the noble Lady, Lady Saltoun, mentioned, that the word "cousin" is rather imprecise because it would include cousins of a great variety of degrees.
  The other point is that the definition of "relative" under child care law has excluded cousins and more distant relatives for over 100 years. We have no evidence to suggest that this has caused any difficulty. It does not mean, of course, that cousins—first cousins in certain circumstances—would not be appropriate people to look after children; I understand that. The problem is that one must draw a line which is on the safe side. In other words, one wants to be sure that what is included as "the family" will necesarily be close to the child in question. That is the thinking behind the provision. To fully examine the problem that the noble Lady has raised one must look at the context in which "relative" is used in every place. I mention the first context to show that it would not make a lot of difference but would require additional information to make sure that the local authority appreciated what was happening.
  Lady Saltoun of Abernethy: I am grateful to the noble and learned Lord. It is only in connection with fostering and the placing of children in temporary homes that this question arises.
  I should have thought it possible to define "cousins" as first cousins once removed or first cousins. I am still concerned that nowadays the social workers' concept of a relative may be narrower than in the past. I should be grateful if the noble and learned Lord would perhaps bear in mind what I have said. However, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 225:
  Page 65, line 41, at end insert—
  (" "service", in relation to any provision made under Part III, includes any facility,").
  The noble and learned Lord said: I have already spoken to this amendment. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 255A and 255B:
  Page 66, line 5, leave out ("placed (or to be placed)") and insert ("who is (or is to be)").
  Page 66, hoe 6, leave out ("placed (or to be placed) by" and insert ("(or is to be) by virtue of").
  The noble and learned Lord said: These are drafting amendments which do no more than offer a more natural phraseology in the definitions of "supervised child" and "supervisor". With the Committee's leave, I move the two amendments together. I beg to move.
  On Question, amendments agreed to.
  Lord Kilbracken Lord Kilbracken moved Amendment No. 256:
  Page 66, line 13, leave out subsection (2).
  The noble Lord said: This amendment proposes the deletion of subsection (2) from Clause 77. This is not because I do not think it is important that we should be told exactly what is meant by,
  "a child whose father and mother were, or … were not, married to each other at the time of his birth"
  because it is extremely important in this Bill, as in the Family Law Reform Act, that the usual meaning of such references is greatly extended.
  This precise language has already appeared in Clause 2(3) and it is important that the substance of that subsection should have appeared at the start of the Bill so that we know a special language is being used. However, I do not see how it can be necessary to repeat, absolutely verbatim, in this subsection what has appeared in an earlier subsection. Therefore, I believe that the subsection should be removed from this clause. I beg to move.
  11.45 p.m.
  The Lord Chancellor: This is a very important provision. The noble Lord and myself had a discussion in which the importance of this particular concept arose in another connection. He may remember it. I believe it is very necessary to have this explanation at the beginning of the Bill in Clause 2(3) because there the matter is being elucidated. The interpretation clause normally carries all the special interpretations that exist. That is the reason why I prefer to have the deletion in the earlier provision in the similar situation that we were speaking about.
  In this case we are in a fairly important and a rather new field as regards the Family Law Reform Act 1987. It still requires to sink in, as it were, as part of the statutory framework. Though this is a duplication, I believe that in the context of the Bill it is quite important and I would rather hold on to it. I hope that the noble Lord feels, in the light of the explanation, that it is not wise to press the amendment.
  Lord Kilbracken: I remember the discussions that I had with the noble and learned Lord on this subject when we were dealing with the Family Law Reform Bill, and even more the discussions that I had with his noble and learned predecessor, the noble and learned Lord, Lord Hailsham. Nonetheless, I find it remarkable that it is necessary in the same Bill to have two subsections that say exactly the same thing. If something is important does that mean that we have to say it twice or perhaps three times?
  I shall not take the matter any further. I feel that when three or four lines can be deleted from a Bill they should be. After all, lawyers are accustomed to seeing what effect one subsection will have all the way through the Bill and ahead of it. There may also be a subsection at the end of the Bill which affects everything that has been read until then. I do not know why an exception is made in this case. Certainly at this hour I will not press the amendment further and I beg leave to withdraw it.
  Amendment, by leave, withdrawn.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 256A:
  Page 66, line 34, after first ("or") insert ("an order under section 7(7)(b) of").
  The noble and learned Lord said: This is a drafting amendment and reflects the fact that if the Bill is passed as drafted courts will still be able to make supervision orders under Section 77(b) of the Children and Young Persons Act 1969 but not under Section 1 of that Act. I beg to move.
  On Question, amendment agreed to.
  Clause 77, as amended, agreed to.
  Clause 78 agreed to.
  Clause 79 [Short title, commencement and extent]:
  Lord Prys-Davies Lord Prys-Davies moved Amendment No. 256B:
  Page 67, line 15, at end insert ("but before making any order bringing section 71 of this Act into force the Secretary of State shall consult with the Lord Chancellor, the Home Secretary such other bodies as he thinks fit and shall then lay before Parliament a report stating what resources have been made available for the transfer of the wardship jurisdiction of the High Court.")
  The noble Lord said: I shall not detain the Committee for long over this amendment. We have listened carefully tonight to the noble and learned Lord's explanation of the Government's approach to Clause 69 that contains details of the new jurisdiction. We are grateful for the guidance that the noble and learned Lord has given to the Committee.
  Clearly, the magistrates' court at least at first will play a critical role within the new system. But there are strong objections in some quarters among the voluntary bodies who have an interest in this field to the role that is proposed for the magistrates' court. It is feared that the magistrates may wish to hang on to a case in their domain or they may not have the breadth of vision, if I may put it like that, to identify a problem when they see it and to acknowledge its existence.
  Concern has been expressed that the skills that will be necessary at the magistrates' court and at the county court are not currently available and that the

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  skills will have to be recruited. Moreover, the noble and learned Lord told the Committee a few days ago that court resources are finite. The purpose of the amendment is to ensure that at least Clause 71 will not be implemented until the Lord Chancellor is satisfied that all the resources are available. This springs from unease that the system may not work as well as is hoped. I beg to move.
  The Lord Chancellor The Lord Chancellor: A good number of changes not only to jurisdiction but also to the substantive law are proposed in the Bill. It would be misleading in so major a rearrangement to isolate and identify the resource implications of one change without taking account of all the many other changes and the resource implications for the various courts involved. The Committee will have in mind that we have devoted a good deal of work to trying to get a good definition of the basis on which care orders can be made so that the magistrates will be able more easily to apply them. In the financial memorandum attached to the Bill we have given a description of the Bill's consequences. It is right to look at the matter as a whole.
  The amendment refers to a "transfer of the wardship jurisdiction". No actual transfer is proposed but I understand the noble Lord's point. My basic answer is that trying to take out one part would be a mistake. We want to look at the matter as a whole. That we have done in the financial memorandum which shows that the matter is difficult to estimate in an accurate manner.
  Lord Prys-Davies: I am content that I have brought to the Committee's attention the concern that has been voiced by voluntary organisations active in this field. I am also content to leave the matter there. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 257 and 258 not moved.]
  Clause 79 agreed to.
  Schedule 8 [Minor Amendments]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 258A:
  Page 108, line 36, after ("the") insert ("legal").
  The noble and learned Lord said: This is a drafting correction. I beg to move.
  On Question, amendment agreed to.
  [Amendment No. 259 not moved.]
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 259ZA, 259ZB and 259ZC:
  Page 109, line 15, leave out from ("sixteen)") to end of line 19 and insert ("for subsections (3) and (4) there shall be substituted—
  "(3) The persons who are to be treated for the purposes of this section as responsible for a girl are (subject to subsection (4) of this section)—

  (a) her parents;

  (b) any person who is not a parent of hers but who has parental responsibility for her; and

  (c) any other person who has care of her.

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  (4) An individual falling within subsection (3)(a) or (b) of this section is not to be treated as responsible for a girl if—

  (a) a residence order under the Children Act 1989 is in force with respect to her and he is not named in the order as the person with whom she is to live; or

  (b) care order under that Act is in force with respect to her,"").

  Page 109, line 24, after ("responsibility") insert ("for").
  Page 109, line 27, at end insert—
  (" .After section 46 of that Act there shall be inserted—

  "Meaning of 'parental responsibility'.

  46A. In this Act 'parental responsibility' has the same meaning as in the Children Act 1989."").

  The noble and learned Lord said: The amendments relate to paragraphs 9 and 11 of Schedule 8, which themselves amend the Sexual Offences Act 1956. The first amendment would affect the definition of a person who is treated as responsible for a girl and who therefore may be convicted of causing or encouraging her prostitution. It would insert reference to the girl's parent. This would reflect the policy of the current law and correct an omission in paragraph 9. It would also insert into Section 28 a new subsection (4) to the effect that an individual is not to be treated as responsible for a girl if there is a residence order in force with respect to her and he is not named in the order as the person with whom she is to live, or the girl is subject to a care order. At present subsection (4) is to similar effect but only as regards parents who have been deprived of the custody of a girl by a court order. The second amendment inserts the missing word "for" into paragraph 11(1). The third clarifies that the phrase "parental responsibility", when used in the 1956 Act, has the meaning given by the Bill. I beg to move.
  On Question, amendments agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259ZD:
  Page 109, line 36, leave out from beginning to ("there") in line 40 and insert ("After section 7(7) of that Act (alteration in treatment of young offenders, etc.)").
  The noble and learned Lord said: The amendment removes paragraph 14(1) of the schedule, which would have substituted the phrase,
  "person who is not a parent of his but who has parental responsibility for him"
  for the word "guardian" in Section 7(7)(c). That would have changed the category of persons who may he ordered to enter into a recognisance in respect of a young person who is convicted of an offence. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259ZE:
  Page 109, line 46, leave out ("child or").
  The noble and learned Lord said: This is a drafting amendment. I beg to move.
  On Question, amendment agreed to.
  Baroness Faithfull Baroness Faithfull moved Amendment No. 259A:
  Page 110, line 42, at end insert—
  ("(1EE) A court shall not impose a requirement under subsection (1A) of this section in respect of a child or young person unless it is of opinion—
  (a) that such requirement is appropriate because of the seriousness of the offence; and

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  (b) that the child or young person is in need of care or control which he is unlikely to receive unless the court imposes such a requirement.").
  The noble Baroness said: The amendment restricts the circumstances in which courts can make a residential requirement as part of a supervision order. It spells out that such a requirement can only be imposed if, first, it is appropriate because of the seriousness of the offence, and, secondly, the young person needs care or control, which he would not otherwise receive.
  Those conditions were laid down in Section 23 of the Criminal Justice Act 1982. As a result, the introduction of the conditions in the 1982 Act, which was implemented in May 1983, was followed by a sharp drop in the number of care orders made in criminal proceedings. If the amendment is put in the Bill, I hope that it will have a similar effect. I beg to move.
  Lord Henderson of Brompton: I support the amendment. The noble Lord, Lord Hunt, would very much have liked to be here because he is interested in intermediate treatment rather than institutional treatment for children. The amendment which has been so briefly but effectively moved by the noble Baroness would make the courts think because they would have to satisfy the two criteria contained in the amendment before they could make an order for residential care.
  There is a real danger, as the Bill stands, that the new residential requirement could be used by courts inappropriately to send young people into residential care when more appropriate intermediate treatment could be used. I thank the Government for Clause 66 and Schedule 7, which provide a new power for young offenders to spend time in residential care rather than be subject to care orders in criminal proceedings. That is a great advance. I should like the noble and learned Lord to consider the improvement which would give courts a strong incentive in suitable cases not to send young people into institutional care.
  Baroness David: Perhaps I may add my support as my name is on the amendment, which has been so admirably spoken to by the noble Baroness and the noble Lord. The amendment would be a great improvement and I hope that the noble and learned Lord will accept it.
  The Lord Chancellor: This new power can be used only in closely defined circumstances as set out in subsection (1A), paragraphs (a) and (d).
  It may be useful if I describe the circumstances under which this power can be exercised. By virtue of sub-paragraph (d), the offender must, at the time the offence was committed, already be the subject of a supervision order requiring him to comply with the directions of the court and by definition, therefore, is already likely to have a history of offending. The court can then exercise its new power only if, under the provision of sub-paragraph (b), the offence for which the juvenile is again before the court is one which,
  "in the case of an offender over the age of twenty-one, would be punishable with imprisonment".
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  We are, therefore, talking about a group of young people who have a history of offending; who have already been required to participate in community-based intermediate treatment activities, and despite this have been found guilty of committing another imprisonable offence.
  But that is not all. In addition to the young person's history and the offending test which I have just described, the court has also to he satisfied by virtue of sub-paragraph (c) that,
  "the behaviour which constituted the offence is due, to a significant extent, to the circumstances in which the child has been living".
  In other words, the court has to take into account the offender's home circumstances and be satisfied that they have contributed to his offending behaviour.
  I do not see how the proposed amendment could sit alongside this provision. To have the two provisions together would suggest that there are some situations in which, despite the juvenile's domestic circumstances having contributed to the offence, he either does not need "care or control" or needs them but can receive them without any enforced change in his living arrangements.
  So, really, the need for change in the living arrangements is focused by the necessity that his domestic circumstances have contributed to the particular offence in question. I hope the noble Baroness will accept that there is nothing between us about our desire to avoid the unnecessary removal of young people from their homes. On the other hand, it is necessary that the new power, which, as the noble Lord, Lord Henderson of Brompton, has said—and I am grateful for his remarks—is a new power, should be clear. To put the two alongside would introduce an element of possible confusion. I hope that the noble Baroness, in the light of that explanation, may feel able to withdraw the amendment.
  Baroness Faithfull: I thank the noble and learned Lord for his explanation. I should like to think about this matter and read carefully what has been said. Therefore, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  12 midnight
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259B:
  Page 111, line 21, at end insert—
  (" .In section 34(1) of that Act (transitional modifications of Part I for persons of specified ages) for the words "13(2) or 28(4) or (5)" there shall be substituted "or 13(2)".").
  The noble and learned Lord said: In moving Amendment No. 259B I wish to speak also to Amendment No. 262. These are drafting amendments with no other effect. I beg to move.
  On Question, amendment agreed to.
  Schedule 8, as amended, agreed to.
  Schedule 9 [Consequential Amendments]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259C.
  Page 112, line 28, after ("4(l)") insert ("and (2)").
  The noble and learned Lord said: This amendment would insert subsection 4(2) of the Children and Young Persons Act 1933 into paragraph 3. This would complete the list of references to "custody, charge or care" of a child in the 1933 Act which are to be replaced by "responsibility for" him. This change is consequential to replacement of the old terminology such as "custody" in the Bill. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259D:
  Page 112, line 33, at end insert—
  (".In section 10(1A) of that Act (vagrants preventing children from receiving education), for the words from "to bring the child" to the end there shall be substituted "to make an application in respect of the child or young person for an education supervision order under section 31 of the Children Act 1989".").
  The noble and learned Lord said: This amendment would replace the local education authority's duty in Section 10(1)(a) of the Children and Young Persons Act 1933 to consider whether to bring care proceedings in respect of a child by a duty to consider bringing proceedings for an education supervision order under Clause 31. This duty arises before the authority institutes proceedings against a person for habitually wandering from place to place, thereby preventing the child from receiving full-time education. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 259E, 259F and 259G:
  Page 112, line 43, leave out from beginning to ("and") in line 44.
  Page 112, line 45, leave out ("actual").
  Page 113, line 4, leave out ("actual").
  The noble and learned Lord said: I beg to move Amendments Nos. 259E, 259F and 259G and speak at the same time, to Amendment No. 259L. These are, in effect, drafting amendments. I beg to move.
  On Question, amendments agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259H:
  Page 113, line 9, leave out ("(6)") and insert ("(7)").
  The noble and learned Lord said: I beg to move Amendment No. 259H and will speak at the same time to Amendment No. 259K. The first corrects the reference in paragraph 5(2) of Section 34 of the 1933 Act by inserting subsection (7) in place of subsection (6). The second clarifies the reference to Section 107 in paragraph 6 by inserting subsection (1). I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259J:
  Page 113, line 13, after ("by") insert ("or on behalf of").
  The noble and learned Lord said: This amendment has the effect that the duty to inform the local authority of the arrest of a child or young person is extended to where accommodation is being provided on behalf of the local authority as well as by that authority. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259K:
  Page 113, line 17, after ("107") insert ("(1)").
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259L:
  Page 113, line 19, leave out ("actual").
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 259M and 259N:
  Page 114, line 12, after ("to") insert ("first").
  Page 114, line 18, after ("to") insert ("first").
  The noble and learned Lord said: I beg to move Amendments Nos. 259M and 259N en bloc. These are purely drafting matters to correct similar amendments to the Mines and Quarries Act 1954 and the Factories Act 1961. I beg to move.
  On Question, amendments agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 259P and 259Q:
  Page 114, line 25, leave out ("(xx)") and insert ("(xix)" inserted by paragraph 19 of Schedule 5 to the Child Care Act 1980").
  Page 114, line 32, leave out ("(xxi)") and insert ("(xx) inserted by paragraph 20 of Schedule 5 to the Child Care Act 1980").
  The noble and learned Lord said: I should like to move Amendments Nos. 259P and 259Q en bloc. These correct errors in the numbering of paragraph 12. I beg to move.
  On Question, amendments agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259R:
  Page 116, line 8, at end insert—
  ("The Powers of Criminal Courts Act 1973 (c.62)
  .In Schedule 3 to the powers of Criminal Courts Act 1973 (the probation and after-care service and its functions), in paragraph 3(2A) after paragraph (b) there shall be inserted—
  "and
  (c) directions given under paragraph 2 or 3 of Schedule 3 to the Children Act 1978".
  The Rehabilitation of Offenders Act 1974 (c.53)
  .In section 7(2) of the Rehabilitation of Offenders Act 1974 (limitations on rehabilitation under the Act) for paragraph (d) there shall be substituted—
  "(d) in any proceedings relating to the variation or discharge of a supervision order under the Children and Young Persons Act 1969, or on appeal from any such proceedings;
  (dd) in any proceedings relating to the making, variation or discharge of a care order or a supervision order under the Chidren Act 1989, or on appeal from any such proceedings".").
  The noble and learned Lord said: Amendment No. 259R is an amendment which empowers each probation committee to provide facilities for enabling directions given by a supervisor under paragraphs 2 or 3 of Schedule 3 to the Bill to be carried out effectively. The second part would retain for proceedings relating to care and supervision orders under the Bill the benefit of Section 7(2) of the 1974 Act, which currently applies to care proceedings under the 1969 Act. This subsection allows evidence relating to previous convictions to be given in those

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  proceedings even though for other purposes the Act treats those convictions as spent. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259S:
  Page 116, line 24, at end insert ("(within the meaning of the Children Act 1989).").
  The noble and learned Lord said: This is a purely technical amendment, made with the aim of clarifying that the phrase "parental responsibility", which has been inserted into Section 131(2) of the Mental Health Act 1983 by Schedule 9, has the meaning ascribed by this Bill. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 259T to 259X:
  Page 116, line 36, leave out ("(b)").
  Page 116, line 38, after ("persons)") insert—
  ("(a) in paragraph (a), for the words "parent or guardian of a disabled person under the age of sixteen" there shall be substituted—
  "(i) the parent of a disabled person under the age of sixteen, or
  (ii) any other person who is not a parent of his but who has parental responsibility for him"; and
  (b) in paragraph (b)").
  Page 116, line 40, leave out ("(5)").
  Page 116, line 41, at end insert—
  ("( ) In subsection (3)(a) for the words from second "the" to "by"" there shall be substituted "for the words 'if so requested by the disabled person' there shall be substituted 'if so requested by any person mentioned in section 1(3)(a)(i) or (ii)'."").
  Page 116, line 42, at beginning insert ("In subsection (5)").
  The noble and learned Lord said: I beg to move Amendments Nos. 259T to 259X and to speak to Amendments Nos. 259Y to 259CC and 267. The first two amendments extend the power to make regulations for the appointment of authorised representatives of disabled persons under the Disabled Persons (Services, Consultation and Representation) Act 1986. These regulations may in future provide for a parent or a non-parent who has parental responsibility to appoint an authorised representative. At present this power is limited to parents and guardians. The change will cover persons who are not parents but who have the benefit of a residence order.
  The remaining amendments, except for the last two, have the same effect as regards Section 2(3) of the 1986 Act. They will mean that a parent and any person who is not a parent but who has parental responsibility for the child may require the local authority to permit the authorised representative to take part in the provision of local authority services as set out in Section 2(1) and (2). Amendment No. 259AA makes the same substitution of the word "guardian" in Section 5(7)(b) so that the relevant persons may request that a child under the age of 16 is not assessed for the provision of services, as would otherwise be required. Amendment No. 259CC removes the definition of "guardian" from this schedule, since it has now become unnecessary, and defines "parental responsibility" by reference to the meaning in the Bill. Amendment No. 267 to Schedule
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  11 will remove the existing definition of the word "guardian" from the 1986 Act. I beg to move.
  On Question, amendments agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259Y:
  Page 116, line 43, after ("by") insert ("or on behalf of").
  The noble and learned Lord said: If I may, I should like to speak also to Amendment No. 259DD. The first amendment updates the reference to children who are accommodated by local authorities in paragraph 26(2) by adding reference to those who are accommodated "on behalf of" an authority. This ensures that children who are, for example, fostered by the authority are covered in the same way as those accommodated on local authority premises. The second amendment ensures that reference to a child who is "looked after" by a local authority in the Disabled Persons (Services, Consultation and Representation) Act 1986 has the meaning ascribed by the Bill. I beg to move.
  On Question, amendment agreed to.
  The Deputy Chairman of Committees: The noble and learned Lord the Lord Chancellor has already spoken to Amendments Nos. 259Z and 259AA.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 259Z and 259AA:
  Page 116, line 45, after ("(c)") insert ("of subsection (5)").
  Page 116, line 48, at end insert—
  (".In section 5(7)(b) of that Act (disabled persons leaving special education) for the word "guardian" there shall be substituted "other person who is not a parent of his but who has parental responsibility for him".").
  On Question, amendments agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259BB:
  Page 117, line 3, after ("substituted") insert (" "means—").
  The noble and learned Lord said: This corrects a drafting error. I beg to move.
  On Question, amendment agreed to.
  The Deputy Chairman of Committees: The noble and learned Lord the Lord Chancellor has already spoken to Amendment Nos. 259CC and 259DD.
  The Lord Chancellor The Lord Chancellor moved Amendments Nos. 259CC and 259DD.
  Page 117, line 9, leave out sub-paragraph (2) and insert—
  ("(2) After the definition of "parent" in that section there shall be inserted—
  " 'parental responsibility' has the same meaning as in the Children Act 1989." ").
  Page 117, line 18, at end insert—
  ("( ) At the end of that section there shall be added—
  "(2) In this Act any reference to a child who is looked after by a local authority has the same meaning as in the Children Act 1989." ").
  On Question, amendments agreed to.
  Schedule 9, as amended, agreed to.
  Schedule 10 agreed to.
  Schedule 11 [Repeals]:
  The Lord Chancellor The Lord Chancellor moved Amendment No. 259EE:
  Page 117, line 44, column 3, leave out ("Section 34(2)") and insert—

  ("In section 34(8), "(a)" and the words from "and (b)" to the end.")

  The noble and learned Lord said: This amendment corrects the repeal of words in Section 34 of the Children and Young Persons Act 1933 which have been made obsolete by the Bill. Section 34(8)(b) requires that where parental rights and duties are vested in a voluntary organisation by a local authority resolution, that organisation rather than the child's parent or guardian should be informed of the child's arrest. Such resolutions are repealed by the Bill, so that Section 34(8)(b) itself may be repealed. Section 34(2) should remain unamended. I beg to move.
  On Question, amendment agreed to.
  [Amendment No. 260 not moved.]
  The Lord Chancellor The Lord Chancellor moved Amendment No. 261:
  Page 118, line 35, column 3, leave out (" "as") and insert (" "and as").
  The noble and learned Lord said: This is purely a drafting change. I beg to move.
  On Question, amendment agreed to.
  The Deputy Chairman of Committees: The noble and learned Lord, the Lord Chancellor has already spoken to Amendment No. 262.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 262:
  Page 119, line 26, column 3, leave out from ("34") to ("(2)") in line 30.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 263:
  Page 120, line 31, column 3, at end insert—

  ("In Schedule 3, in paragraph 3(2A), the word "and" immediately preceding paragraph (b).").

  The noble and learned Lord said: This is purely a drafting amendment. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 264:
  Page 120, line 36, column 3, at end insert—

  ("In section 5, in subsection (5)(e) the words "a care order or"; and in subsection (10) the words "care order or".").

  The noble and learned Lord said: This amendment removes the references in Section 5 of the Rehabilitation of Offenders Act 1974 to care orders made in criminal proceedings. It follows from the repeal of the power to make such orders by Clause 66 of the Bill. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 265:
  Page 120, line 58, at end insert—

  ("1978 c. 30. The Interpretation Act 1978

  In Schedule 1, the entry with respect to the construction of certain expressions relating to children.").

  The noble and learned Lord said: This amendment would delete from the Interpretation Act 1978 three definitions of terms used in states, namely "the parental rights and duties"; "legal custody" and any reference to the person with whom a child has his home. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 266:
  Page 121, line 35, column 3, at beginning insert—

  ("In Schedule 2, the entry relating to section 16 of the Child Care Act 1980.").

  The noble and learned Lord said: This amendment is to the Police and Criminal Evidence Act, in effect. It would repeal the reference to the power in Section 16 of the Child Care Act 1980 to arrest a child in care who has been abducted or has absconded. In future the recovery of such children will be covered by powers which the Government intend to introduce by way of amendment in due course. I beg to move.
  On Question, amendment agreed to.
  The Lord Chancellor The Lord Chancellor moved Amendment No. 267:
  Page 121, line 43, at end insert—

  ("1986 c. 33.

  The Disabled Persons (Services, Consultation and Representation) Act1986.

  In section 16, in the definition of "guardian", paragraph (a).").

  The noble and learned Lord said: This amendment removes the definition of "guardian" as regards England and Wales from the 1986 Act. This definition is no longer needed following the amendments to the Act made in Schedule 9. I beg to move.
  On Question, amendment agreed to.
  Schedule 11, as amended, agreed to.
  House resumed: Bill reported with amendments:
  House adjourned at sixteen minutes past midnight.