Lords Sitting of 22 March 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 Southwark.

British Rail: Manning
Lord Jay Lord Jay asked Her Majesty's Government:
What was the total number of British Rail employees in January 1985 and January 1989 respectively, and how many of these in each case were maintenance staff.
The Parliamentry Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, British Rail informs me that the total number of group employees was 181,782 in January 1985 and 148,316 in January 1989. Excluding employees in subsidiaries such as BREL, the numbers of rail employees were 144,261 and 127,686, a reduction of 11·5 per cent. over the period. It is not possible to give an exact figure for staff employed solely on maintenance duties, but the numbers employed by BR's three engineering divisions fell by 10·6 per cent. in the same period, from 60,936 in January 1985 to 54,497 in January 1989.
Lord Jay: My Lords, is there not a risk that the undermanning of our public transport services enforced by the Government's financial targets may become a threat not just to efficiency but to the safety of those services?
Lord Brabazon of Tara: My Lords, British Rail makes safety its first and highest priority. It would not reduce staff numbers if that were compromised.
Lord Underhill: My Lords, is it not a fact that for some years now concern has been expressed by the unions and others about excessive overtime that has to be worked by many members of British Rail staff? Is it not correct that, as reported recently, there is a 10 per cent. shortfall of drivers in Network SouthEast? As regards excessive overtime, while one cannot comment on the results of the three rail inquiries now taking place, is there not some concern at the evidence given of the excessive overtime that is worked and of the bad morale that exists due to the loss of skilled and technical staff, arising from low wages, to other concerns such as British Telecom?
Lord Brabazon of Tara: My Lords, overtime is a management matter for British Rail. It is obviously being carefully considered, as the noble Lord said, by the accident inquiries now taking place and it would be wrong to speculate on the inquiries' conclusions in advance. I understand that British Rail is considering a range of measures to encourage recruitment and the retention of staff in areas where there are shortages. That should help to reduce overtime.
Lord Orr-Ewing: My Lords, can my noble friend say how the figures for British Rail compare with the manning of Continental railways, taking account of the proportions of rail track in use? Are British Rail's figures higher or lower for manning than that of our Continental competitors in France and particularly in Switzerland?
Lord Brabazon of Tara: My Lords, I am afraid that I do not have figures to compare our manning levels with overseas operators. I shall endeavour to ascertain whether comparable figures are available and perhaps write to my noble friend.
Lord Hatch of Lusby: My Lords, the Minister said that British Rail puts safety as a priority. If British Rail were to be nationalised, would not profit be given priority over safety?
Noble Lords: Privatised!
Lord Hatch of Lusby: My Lords, if British Rail were privatised and private companies returned to the railways, would it not be their duty to put profit before safety?
Lord Brabazon of Tara: No, my Lords. There is little that I can add to my reply to the debate just before Christmas. If British Rail were to be privatised, safety would continue to be paramount. We would obviously have to ensure that is so through rigorous oversight by an independent inspectorate.
Lord Boyd-Carpenter: My Lords, did my noble friend observe that the noble Lord, Lord Underhill, speaking from the Opposition Front Bench, referred to the move of labour from a nationalised to a privatised industry? Has my noble friend any comment to make on that?
Lord Brabazon of Tara: My Lords, I am not sure that the noble Lord, Lord Underhill, mentioned privatisation in his question.
Lord Boyd-Carpenter: My Lords, the noble Lord, Lord Underhill, referred to British Telecom.
Lord Brabazon of Tara: I apologise, my Lords. The noble Lord did mention British Telecom. However, as I said in my previous answer, there is absolutely no reason to suppose that privatisation would affect safety one way or the other.
Lord Underhill: My Lords, does not the Minister agree that the question put by the noble Lord, Lord Boyd-Carpenter, is far from the subject of the original Question? I referred to the position where there is a transfer of technical staff to illustrate the bad morale that exists in sections of British Rail due to the low wages. That is the point that should be considered and I hope that the Minister agrees with that.
Lord Brabazon of Tara: My Lords, I have already said that British Rail is considering a range of measures to encourage recruitment and the retention of staff.
Lord Glenamara: My Lords, the noble Lord has not answered the point put by my noble friend Lord Jay. Has the noble Lord noticed that as the Government have raised the financial targets the number of men employed on maintenance has fallen? There is a clear correlation between the two. As one graph has gone up the other has gone down.
Lord Brabazon of Tara: My Lords, the responsibility of British Rail is to run a safe, economic and efficient railway. It is obviously right that it should look at staff numbers in that context. I remind the noble Lord that although subsidy to the railway system has gone down—which must be a good thing—at the moment railway investment is at the highest level for 20 years.

Hospitals: Car Parking
2.43 p.m.
The Earl of Selkirk The Earl of Selkirk asked Her Majesty's Government:
Whether they are satisfied that adequate car parking space is being provided in new hospitals.
Lord Henley: My Lords, because of the growth in car ownership it is not always possible to provide on site parking for everyone travelling to hospital by car. Where parking has to be restricted it is usually to ensure that routes used by emergency traffic are kept free and that there is access for sitting case ambulances, disabled drivers and priority staff cars.
The Earl of Selkirk: My Lords, I do not know whether my noble friend has read the North Report which specifically says that our economy and society depend overwhelmingly on the motor vehicle and the motor vehicle depends on having somewhere to stop and let its passengers out. Does the noble Lord really think that for a hospital with 600 beds and with a staff of perhaps 600 to 1,000, 600 parking places are enough? One has to allow too for persons to go daily to hospital to get treatment and for visitors to patients whom I am sure the noble Lord would welcome as being good for morale. Has the Minister gone into that question? Can the noble Lord say whether there is a limitation of money or has a direction been given by the Government?
Lord Henley: My Lords, current guidance suggests a ratio of one parking place to every four beds increased to one to one where access is difficult due to the limited availability of public transport. Her Majesty's Government consider that this level of provision is sufficient to provide for patients who cannot visit hospital without a car; for example, the disabled, essential staff and some, but by no means all, visitors.
Lord Wallace of Coslany: My Lords, is the Minister aware that the imposition of parking charges at many hospitals is causing serious disruption and delay particularly to patients who are arriving? Is the Minister further aware that the situation at some hospitals is becoming very serious?
Lord Henley: My Lords, where a health authority wishes to provide more parking than is advised, it may decide to recover some of the cost by charging. Differential charges can be made according to the status of the user: staff, patients and visitors. Staff who are required to use their cars to perform their duties—for example, district nurses—are exempted from charges.
Lord Ennals: My Lords, does the noble Lord accept that the site of the new Westminster and Chelsea Hospital to replace Westminster, St. Stephen's and three other London hospitals, is so overcrowded that it will not provide adequate parking for patients and staff when one considers the size of the hospital?
Lord Henley: My Lords, in fact an underground car park is planned at the new Westminster and Chelsea Hospital with 300 spaces. That will be a ratio of 2.2 to 1. That level of provision is considered acceptable given the limited space available and accessibility to the hospital by public transport.
The Earl of Selkirk: My Lords, is parking at the new Charing Cross Hospital good enough? Has the noble Lord tried recently to park his car anywhere near there? I ask my noble friend to consider very carefully the situation of a hospital in Dorset with a staff of 1,300 people all of whom will want parking space. All young nurses will have cars by the year 2000. Does the noble Lord agree that it will be very difficult to increase parking space after the hospital has been built? It is something that has to be laid out at the very beginning. Will the noble Lord consider whether he is grossly underestimating the national requirement?
Lord Henley: My Lords, I do not believe that I am. After the current redevelopment of a new mental illness unit at the Charing Cross Hospital, there will be a total of about 200 spaces, which will be a ratio of 3.3 to 1. There is very good public transport in that area. I agree with the noble Earl that it is very difficult to park in the area of the Charing Cross Hospital. I have done it myself.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that he said that district nurses can park free of charge? The point is that they and parsons, for instance, have to get a chit from a porter to take to the ticket barrier when they depart. That causes an enormous amount of delay even when the parking is free of charge.
Lord Henley: My Lords, it is a matter for each individual hospital. I do not believe that it is a matter for the Government to issue directives on the day-to-day operation of hospital car parks. Each hospital will have a unit general manager who is capable of taking decisions on the allocation of car parking space and how it should be operated.
Lord Molloy: My Lords, as regards some of the large car parks, if someone does not park absolutely correctly—I know of instances of disabled people to whom this applies—his car is wheel-clamped. When the clamp is put on or taken off it causes a great deal

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of stress to other people as well. Can the Minister ask his right honourable friend if there is a possibility at the large car parks of having a car park superintendent to help and guide patients, staff and the disabled?
Lord Henley: My Lords, that is again a matter for the hospitals. Clamping is available to hospitals as long as sufficient warning is given to the owner so that he knows that his car will be wheel-clamped and there is no damage to his car.
Lord Glenamara: My Lords, is the noble Lord aware that I recently had an appointment at the Freeman Hospital in Newcastle? I was unable to find a parking place in the car park. I parked in a quiet street nearby and promptly got a ticket. So my visit cost me £12. It is a new hospital completed under this Government, with completely inadequate parking space. It is also built on a greenfield site. Will the Government look at this problem?
Lord Henley: My Lords, I am very sorry that the noble Lord acquired a parking ticket. He will know that in Newcastle the metro is available. I also know that the local authority in Newcastle is very anxious that people should use public transport if possible.
Lord Glenamara: My Lords, the metro is nowhere near the Freeman Hospital, which is built on a greenfield site outside the city. I gather that the noble Lord knows the area very well. He should be aware of that.
Lord Henley: My Lords, I do not know the Freeman Hospital, but I know Newcastle.
The Earl of Selkirk: My Lords, who makes the decision in these matters? Is it the Secretary of State; is it the region; or is it the district? If noble Lords want information, they can get it from all these sources; and it will differ from what the noble Lord is saying at the present time.
Lord Henley: My Lords, as I have stated, the Government have issued guidance, but it is then up to the district and the unit itself to decide how to run its own car parking.

Ozone Layer: Protection
2.50 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What international efforts to protect the ozone layer they expect to follow the London conference.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, the "Saving the Ozone Layer" London conference will give a political boost to the first meeting of the parties to the Montreal Protocol which will be held in Helsinki in May and will begin the process of reviewing the protocol. We hope that
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at the second meeting of the parties in London next year tougher measures will be agreed.
Lord Campbell of Croy: My Lords, I thank my noble friend for his Answer. I congratulate the Government on the way in which the London conference has concentrated attention on this disturbing subject. What is the prospect of obtaining the necessary changes in China and in developing countries which are planning substantial increases in refrigeration units as a significant part of their domestic economic programmes?
Lord Hesketh: My Lords, the Government agree that it is absolutely crucial that the larger developing countries should join the Montreal Protocol. We appreciate the desire of such countries to develop and enjoy the benefits of refrigeration. The London conference aimed to show that it will be possible to do so without using harmful CFCs. At the conference Brazil undertook to become a party, while China, the Asian countries and the members of the Gulf Co-operation Council said that they would also give it serious consideration. The Montreal Protocol includes provisions to help developing countries. The first meeting of the parties in Helsinki will examine how to take these proposals forward.
Lord Hatch of Lusby: My Lords, do the Government agree with the delegates to the conference from China and India that as the developed countries have created almost all the emissions which have been attacking the ozone layer, it is the responsibility of the developed countries to assist the developing countries in paying the extra costs that will be necessary in order to develop refrigeration free of CFCs?
Lord Hesketh: My Lords, as the noble Lord will be aware from my previous answer, the Montreal Protocol fully accepts that we must look after the interests of the less developed countries. As all noble Lords will know, if everyone in China acquired a refrigerator the prospective emissions would be a large multiple of anything produced in the United Kingdom. One of the objects of the conference was to get an extraordinary number of people and countries together in order to address the problems and to find out what those countries felt should be done to assist them.
Lord Hailsham of Saint Marylebone: My Lords, am I not right in thinking that, at least in theory, it is possible to manufacture devices which actually generate ozone? In addition to the restrictive measures, has consideration been given to the possibility of sending up such devices into the stratosphere to generate new ozone to replace the lost ozone?
Lord Hesketh: My Lords, I believe that it is possible to create ozone, but there are some difficulties in getting up into the atmosphere to do so.
Lord Hatch of Lusby: My Lords, in his answer to me the noble Lord said that one of the objects of the conference was to hear what the developing countries

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want. China, India and other developing countries have stated quite clearly what they want. What is the Government's attitude to the demands made by China and India that the developing countries should be assisted in developing refrigeration free from CFCs? What is the Government's attitude? What will they do to help the developing countries?
Lord Hesketh: My Lords, the first thing the Government did to help the developing countries was to call the conference and provide the initiative. The second point that must be faced up to is that at the moment we do not have available direct swaps for CFCs. We are looking, for instance, at technology transfers, but these are early days yet.
Lord Grimond: My Lords, is the damage to the ozone layer thought to be already affecting the climate? If so, is it responsible for the excellent winter which the south of England is enjoying? If the climate continues to improve, is there any possibility that we shall have better weather even in Scotland?
Lord Hesketh: My Lords, in answer to the last part of the noble Lord's question, I doubt whether that would ever be possible.
Baroness Nicol: My Lords, what discussions are taking place with producers of CFCs here and in other countries, particularly those that have subsidiaries in under-developed countries? Is there full co-operation with the industry so far as he is aware? I do not refer simply to our own producers.
Lord Hesketh: My Lords, the noble Baroness will be aware that the object of the exercise from this country's point of view is to eliminate eventually the production of CFCs. Notable companies are already engaged in a dialogue, but we still have a long way to go.
Viscount Montgomery of Alamein: My Lords, is my noble friend aware that the indiscriminate cutting of the Amazon rain forest may be causing an ecological disaster of almost equal proportions to that caused by the depletion of the ozone layer? Do the Government have any plans for an international conference on this subject?
Lord Hesketh: My Lords, that question I feel, is just a little wide of the one on the Order Paper.

CFC Gases and Refrigerators
2.56 p.m.
Lord Hayter Lord Hayter asked Her Majesty's Government:
What kind of refrigerators use CFC gases and whether they cause the damage to the ozone layer when they are in use, or only when dicarded.
Lord Hesketh: My Lords, all domestic and commercial refrigerators and freezers currently
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available use CFC gases, both as a coolant and in their insulation foam. Many commercial refrigerators and freezers now use HCF22, which is not controlled by the Montreal Protocol and which causes only 5 per cent. of the damage to the ozone layer caused by the equivalent weight of the more dangerous CFCs. CFC gas can leak from both the cooling system and from the insulation foam during the lifetime of the product, but the major source of emissions takes place once the applicance is scrapped.
Lord Hayter: My Lords, how does the man in the street, of whom I am one, know how to dispose of his old refrigerator? Is there a list of municipal councils which can do so without damaging the ozone layer?
Lord Hesketh: My Lords, officials from the department are in discussion with industry representatives about this difficult question. The bulk of CFCs in refrigerators is in the insulating foam. No techniques for its safe disposal have yet been developed. The coolant, however, can be recovered and recycled in most cases. That is happening widely in commercial refrigeration. At least one retailer of domestic refrigerators has agreed to remove old applicances and extract the coolant for recycling.
Viscount Hanworth: My Lords, can the noble Lord give me some idea of how much CFC is contained in a domestic refrigerator? If one could recover it, would this not be a large contribution to avoiding the emission of CFCs? Will he confirm that the larger refrigerators use ammonia, and that its use and the use of polyurethane and other foams could be a major consideration?
Lord Hesketh: My Lords, I am not an expert on ammonia, but I can assure the noble Viscount that one of the features of the Montreal Protocol will be that the incentive for recycling will increase progressively with the reduction in production.
Lord McIntosh of Haringey: My Lords, the Minister gave a disappointing reply to the noble Lord, Lord Hayter, who asked for guidance about what the man in the street should do when disposing of a refrigerator. Can he give any guidance to those of us who have recently acquired Halon fire extinguishers—which I am told are many times worse than refrigerators in their potential to damage the atmosphere—as to how we are to dispose of them, as we bought them without knowing how dangerous they can be?
Lord Hesketh: My Lords, I think that we are beginning to drift somewhat wide of the Question on the Order Paper. However, I can assure the noble Lord that certainly with regard 1 o future fire extinguishers, all encouragement will be given for them not to be used in, for example, training. Moreover, research is being carried out to see whether a replacement for those extinguishers can eventually be found.
Lord Winstanley: My Lords, since it is established that the damage to the ozone layer by refrigeration gases occurs only when refrigerators are broken up, instead of advising people not to buy new fridges, would it not be more sensible to prohibit the breaking up of old ones? More specifically, can the noble Lord tell us what facilities exist in Britain for the recovery, and possible neutralisation, of those gases? Further, will he put information in the Library as to where those facilities exist in different parts of Britain?
Lord Hesketh: My Lords, there are two parts to the problem. As I explained earlier, the incentive for the recovery of refrigerants themselves will increase; the difficulty is with the insulation, to which there is no answer at present. As a result there is a difficulty. That is why we are pushing so hard to eliminate the production of CFCs, because that is the fastest way of tackling the problem.
Lord Cledwyn of Penrhos: My Lords, further to the noble Lord's question, is it not the case, as I have read in the newspapers, that 2 million refrigerators and freezers are scrapped in this country every year? Is it not further the case that the West German Government reclaim freezers and refrigerators in those circumstances and make them safe? I ask why Her Majesty's Government cannot take similar steps.
Lord Hesketh: My Lords, I am most interested in what the noble Lord the Leader of the Opposition said. But as regards insulation, which is half of the problem of CFCs, my understanding is that there is no satisfactory way at present of dealing with that.
Lord Mellish: My Lords, the noble Lord, Lord Hayter, asked a most important question, which was whether the municipalities are being asked to help or co-operate in any way in the matter. The average man in the street today has a refrigerator; indeed, it has now become normal for everyone to have one. Therefore we cannot say, "Discard them; they might be dangerous". Where do we discard them, and how? Further, what are we all talking about?
Lord Hesketh: My Lords, in answer to the question posed by the noble Lord, officials from the department will shortly be meeting representatives of local authorities to discuss their role in the efforts to reduce the emissions of CFCs.

Business
3.3 p.m.
Lord Denham: My Lords, with the leave of the House, I should like to say a word about the two short debates standing in the names of the noble Lord, Lord McIntosh of Haringey, and the noble Baroness, Lady Turner of Camden. As is customary in short debates, the mover is allowed approximately 15 minutes to speak and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate.
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In the debate tabled in the name of the noble Lord, Lord McIntosh of Haringey, this means that all other speeches should be limited to a maximum of 12 minutes and in that tabled in the name of the noble Baroness, Lady Turner of Camden, it should be seven minutes. If any noble Lord were to speak at greater length, it would be at the expense of subsequent speakers in the debate.

Antarctic Minerals Bill [H.L.]
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, I beg to introduce a Bill to make provision with respect to the exploration and exploitation of mineral resources in Antarctica; to enable proceedings with respect to matters arising under the law of the British Antarctic Territory to be brought in England and Wales; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Glenarthur.)
On Question, Bill read a first time, and to be printed.

Brunei (Appeals) Bill [H.L.]
Lord Glenarthur: My Lords, I beg to introduce a Bill to make provision with respect to the reference of appeals from the Supreme Court of Brunei Darussalam to the Judicial Committee of the Privy Council. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Glenarthur.)
On Question, Bill read a first time, and to be printed.

British Railways (No. 2) Bill
Read a third time, and passed, and returned to the Commons with amendments.
Tees (Newport) Bridge Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Non-Elected Body Appointments: Policy
3.5 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey rose to call attention to the growth of non-elected bodies; to the patronage system used by central government for their selection; and to the effect of such bodies upon local government; and to move for Papers.
The noble Lord said: My Lords, in rising to move the Motion standing in my name on the Order Paper I am conscious that there are a number of quite severe paradoxes in bringing such a Motion before

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your Lordships' House. This is, after all, a House which consists almost entirely of people who owe their membership of it to patronage of one kind or another—in my case in the capacity of what is politely called "a working Peer" who was put on a list of names suggested by leaders of political parties—quite apart from the Honours Lists which are produced at New Year and on the Royal Birthday. I am quite conscious that I owe my presence in your Lordships' House to the patronage of the Labour Party. Indeed, a comparable arrangement with other parties exists for many other noble Lords who are present in the Chamber this afternoon.
In the case of noble Lords with hereditary titles, many were won originally for distinction on the battlefield or in other fields of public life; but a considerable number are rewards for past patronage in favour of their ancestors. There are noble Lords who find themselves here because they were part of Honours Lists at New Year or on the Queen's Birthday and there are others who find themselves here because of Dissolution Honours Lists. Many peerages are awarded for great distinction, but I think that most noble Lords will recognise that there is an element, at the very least, of the luck of the draw as to who is appointed to come to this Chamber. Indeed, there are many people of great distinction who are not Members of your Lordships' House, although they would adorn it considerably were they to be here. Therefore there is that paradox in the membership of this House when we are seeking to discuss the question of patronage in public life and the patronage of central government.
The second paradox I should like to mention comes to my attention through the Answers which Ministers have given in response to Starred Questions in recent weeks. I should like to say immediately that I recognise that when Ministers tell us that the number of quangos—that is, quasi-autonomous non-governmental organisations—has gone down by, I think, 25 percent. in recent years, I do not dispute that figure. The case for the Motion which I move today does not depend on the number of quangos which exist; what it depends on, and what gives it its force, are the scope and the power of those quangos and the scope and the power of central government in appointing people to organisations which have very much larger budgets and considerably more influence in public life than was the case 10, 15 or 20 years ago. I do not say that there was a watershed with the election of this Government in 1979. I consider that this is an issue which has affected public life all the time that I have been involved with it and, I have no doubt, for many years before that.
There is plenty of evidence that bodies appointed by central government have increased in their power and scope, and that there has been an increase in the ability and willingness of central government to use them for party political ends and in order to subvert the other estates of public life which in the past have been a countervailing force to the power of central government.
I have no figures more recent than April 1987, but in April 1987 no fewer than 1,643 quangos existed. Those organisations had 148,700 employees. They had budgets of £7.1 million, of which £5.7 million came from central government. In addition to the number of employees, almost 44,000 appointments were made directly by Ministers or on behalf of Ministers. It is worth nothing that of those apppointments at that time—I doubt whether the position is any worse now—81 per cent. were men and 19 per cent. only were women.
In a study in 1986, the Labour Research Department—again I apologise that there are no more recent figures and if any noble Lord has more recent figures I shall listen to them with great interest—made comparisons between the membership of 22 large quangos in 1985, which was the most recent year available to it, and in 1979, when a Labour Government had been in power for a sufficient length of time to enable them to have considerable influence on the membership of those public bodies. What it noted over that period of time was that there was a considerable increase in the politicisation of those bodies.
If we look at the 22 chairs of the public bodies concerned, in 1979 six of them were directly appointed from among the ranks of the Labour Party. I suppose that I should add to that figure my noble friend Lord Shepherd who, although his chairmanship of the National Bus Company came more from his wealth of experience in business matters and interests than his Labour Party concerns, nevertheless remains, I am delighted to say, a member of the Labour Party. One of them was an active Conservative and two more were directors of companies which made substantial contributions to the Conservative Party. One of them was a Liberal and 11 of the 22 had no discernible political affiliations of any kind.
In 1985, by contrast, no chairman of those public major bodies had any discernible Labour or Liberal connections. There were however 13 w ho were either active members of the Conservative Party or considerable contributors to Conservative Party funds, whether active in politics on a full-time basis or because of their activities in business.
There can be no doubt that the politicisation of those major public bodies has been on the increase. I do not deny for a moment that it existed under a Labour Government. I do not deny that that has been a tendency which has been noticeable for a considerable number of years; but it has been increasing, is increasing and in my view should diminish.
Much of the talk about the membership of public bodies is on the basis of the Prime Minister's favourite phrase that in order to be a member of a public body, "You have to be one of us". Many of the examples which are most talked about in public life are those which are difficult to refer to in the House because the people concerned are Members of your Lordships' House, and especially when so many are not present. It would be invidious of me to refer to individuals. I shall not go through the usual list of bodies which it is claimed, and I believe with some

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justice, have been subject to political influence in appointments to their management.
It is now well accepted that 10 Downing Street has considerable influence on who is appointed to bodies such as the Arts Council, the Board of Governors of the British Broadcasting Corporation, of the Independent Broadcasting Authority and to many university appointments—I am not referring to regius professorships—and to the governorship and membership of the court of the Bank of England. All those are common knowledge, but it is not particularly relevant to the Motion or to propriety in the House to go into them in more detail.
However, I should like to refer to those public bodies which directly affect something which is close to my heart and which I know is close to the heart of a number of noble Lords—the public bodies that affect the local provision of services in our community, especially local government. That is why a reference has been made to the issue in the Motion.
Let us take, for example, the supervisory bodies for the finances of local authorities. It is generally agreed that the Audit Commission is doing an admirable job, not just under its present director, but it did so under its previous director. The fact remains however that the present director was a special adviser to the Chancellor of the Exchequer before becoming director of the Audit Commission; similarly, the Commission for Local Authority Accounts in Scotland should have had, and did have originally, representations from the business community and central government and also from local authorities. There is after all only one local authority association in Scotland (the Convention of Scottish Local Authorities). During the whole time that that body has been established in Scotland only five CoSLA nominations have been accepted on to the commission. On the most recent occasion when there were vacancies, the Secretary of State for Scotland turned down all four CoSLA nominations.
Let us look briefly at the education world. The examples that I wish to give are not about local authority education, which, with the exception of the opting-out procedures, has not on the whole been greatly affected. Let us look at the city technology colleges which are intended to take away a significant part of local government from democratic control. Let us look at the Grant Maintained Schools Trust, which claims to have charitable objectives but somehow fails to have registered as a charity and is yet obtaining money from central government. Let us look, more importantly, at the Housing Corporation, which it is intended should take over from council housing—in other words, that it should become 10 times more powerful and yet have no democratic representation; at the residuary bodies which have taken over from the metropolitan county councils—others of my noble friends will refer to that matter—to the training and enterprise councils in local areas, which will take over the training functions that have been exercised by national bodies, which at least had trade union represen-
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tation; and at urban development corporations, which take away planning powers from elected representatives. There are many more similar examples.
It is not just the people involved in those bodies who are of concern. It causes a great deal of disaffection in local areas where people have the feeling that their elected representatives, from whatever party, should have a say in what is happening in their area. It has two effects to which I wish to refer briefly. They are more important than the nature of the individuals or the way in which the patronage is exercised. First, it means a centralisation of policy-making. Whatever the intention, that is the effect. It means that policy-making and funding are taken away from local influence and local government and become the prerogative of Whitehall and of Ministers.
Secondly, there is a fragmentation of the service provision. If we look at the bodies that are responsible for housing in any community now, the responsibility is fragmented among housing associations supported by the Housing Corporation; in some areas the housing action trusts; in some areas still the local authorities and in some areas private landlords supported by the business expansion scheme. All that means that nobody concerned with community provision at the sharp end has any real idea of who runs what any more. There is no possibility for a co-ordinated approach to delivery of services. Although that is quite correctly subject to central government policy direction, the services ought not to be run on the ground in the local areas by the nominees of Whitehall, the nominees of Ministers or the nominees of any political party. That is the principal thrust behind our Motion this afternoon and that is why, my Lords, I beg to move for Papers.
3.21 p.m.
Lord Bellwin: My Lords, perhaps I may say at once that I was never on an honours list at all; I came here not for services rendered but rather for services to be rendered. Whether or not I rendered them adequately is for your Lordships to decide, not for me.
In general I say at once that I much prefer services to be provided by local authorities. To that extent I find myself not in disagreement with the noble Lord, Lord McIntosh, and I hope that he would have expected me to say so. We cannot ignore the fact that the numbers of quangos are fewer than they were. I remember that my first task on arriving at the DoE was to be asked by the then Secretary of State to conduct an examination of the numbers of local quangos pertaining to local government in order to see how many we could abolish. I am glad to tell your Lordships' House that eventually we took from the statute book in excess of 300 such quangos.
It is fair to ask, "Why were they there for so long?" Some had been there for many years, some it has to be said, existed just in name. I concede to the noble Lord, Lord McIntosh, that those to which he referred were of much greater significance and importance. I shall address myself to them in a moment. Nevertheless we wiped out 300 quangos in one

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department alone. As the noble Lord said, the number today, at least on the latest information that I have for 1988 from the Cabinet Office, has decreased since 1979 from 2,167 to 1,648. I believe that many more than the 500 have gone but in some cases they have been replaced by others. I shall refer to that later.
Whether or not one considers that such bodies are good or bad and whether or not one wonders why they exist depends on what we expect them to do, whether we approve or disapprove of what they set out to achieve and how that relates to what is currently being done or in some cases not done. I shall address myself in the main to what the Motion calls for—that which pertains to local government.
First, I especially wish to mention the two major urban development corporations which were set up to deal with the London Docklands and Merseyside development. They were the subject of tremendous controversy when they were set up, to deal, in the case of London, with some 6,000 acres of land. I am told that certainly for 50 years and maybe more, although it was less in some parts, that land had been derelict and in disrepair.
The question was this. If local authorities were given additional resources, could they tackle that problem? It was felt that they could not and I believe that was right. A major factor in the debate is that local authorities, especially the urban local authorities, have a whole range of services, many with inner city problems which have built up over the years. When we examine the situations with which they have to deal we realise that they must decide their own priorities for spending: whether more or less money can go to this or that service. I want to be charitable about this, because having worked in the field I know some of the problems. Often with the best of intentions those local authorities cannot do what they would like to do and have been unable to do.
As regards the urban development corporation, I accept what the noble Lord, Lord McIntosh, says about the desirability of problems ideally being dealt with by local people. This is an instance where it was not done by local people. I am giving them the best of motivation as they have gone along but they were not able to deal with the problems. Organisations were set up comprising competent and qualified people with know-how, and those organisations went across party lines. When we examine the original composition of the first Docklands Development Corporation team we find that people came from all parties and no parties. They had qualifications, experience and background. They were given resources and were able to apply themselves single-mindedly, with no distractions and no need to decide priorities.
The record shows that while we may not agree with all that has been done and we might have liked to have seen more of this and less of that, sitting here today some eight or nine years later we see a dynamic achievement and a cause for great pride to all the people who have been a part of the development. I am proud of the small part I played in helping to establish the project. As I have already
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stated, I concede that it might have been nicer and easier if this had been accomplished in other ways. I do not think that local authorities were able to do it. What has happened since more than justifies the setting up of such an organisation with all the downside of it being a non-elected body, to which the noble Lord referred.
The Merseyside Development Corporation is about one-tenth the size. As I recall, it is some 600 acres. It has different problems but nevertheless I know some distinguished people on the corporation who have done a good job. If they have not achieved everything, they have achieved a great deal and will go on doing so.
As for the 10 mini-UDCs which have been set up and are now working, one of the happiest aspects is that they are, in the main, working very well with the local authorities. Who would have thought it? I am vastly encouraged because the elected members have decided very sensibly and responsibly to work together. They accept that they might have liked to have had additional money but they say, "The fact is that it has come here to our area"—I give way to the noble Lord.
Lord McIntosh of Haringey: My Lords, perhaps the noble Lord will permit me to intervene. He has already answered the point I was going to make. If the local authority is sensible—and these Labour local authorities are—it would recognise that the Government will only give money to their own appointees. They will not give it to elected local authorities. That is the realism that the local authorities have shown.
Lord Bellwin: My Lords, nevertheless I am encouraged by the fact that those bodies are working together. I remind the noble Lord that that was not always the case, although it is the case now. The areas controlled by those bodies are benefiting accordingly.
The great thing to remember about the urban development corporations, especially the 10 mini corporations, is that after about five years they are dissolved. They leave behind what they have achieved. That is kept within the community and is passed on to the elected members of a local authority. The urban development corporations are temporary.
The other day I spoke to a chief executive of a large Labour-controlled authority. He said to me that for all the talk of what this Government are supposed to be doing to the detriment of local authorities, he had never known his town and his authority to be so busy and to be undertaking so many activities. Heaven forbid that I should mention the name of that person. It may not do him a lot of good.
I want to stress that all of these bodies have accountability of the most onerous kind. They must be accountable, through Ministers, to Parliament. They have to follow strict audit procedures. I suspect that more than any other body these particular organisations are under scrutiny under the magnifying glass.

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I know that my noble friend Lady Blatch can say a lot more on the new towns than I can as she has vast experience of them. However, the new towns themselves are unelected bodies. They are something of which the whole country can be proud. Their achievements are immense. When one sees the new towns, one must be impressed with their achievements. But I shall not say more on that now.
The noble Lord, Lord McIntosh, mentioned the Audit Commission. I remember when that body started. I remember the tough fight we had to get it accepted in your Lordships' House and the many battles that were fought. Yet, at the end of the day, even the noble Lord, Lord McIntosh, conceded that it does a fine job. It is respected by local authorities. It may not be liked by everyone as it is of course a watchdog. The first director appointed to the Audit Commission was called Mr. Banham. He has now moved to other things. No one could ever have said that Mr. Banham leant towards any particular government, least of all the Conservative Government. The Audit Commission does a great job, but time does not allow me to speak further on it.
I must now refer to the patronage point. The noble Lord, Lord McIntosh, must have had his tongue in his cheek when he touched on this, although I thought he put his case very honestly. I did a little homework and was amused to find that in 1977, 39 members of the TUC General Council held office in 180 quangos. I have found that many of the heads of the nationalised bodies are now Members of your Lordships' House. I will not name them; they are not present and that would not be fair.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord for giving way again. I have a very quick point to make. The research in 1986 to which I referred showed that by 1985 there were more Old Etonians than trade unionists on these 22 bodies.
Lord Bellwin: All I can say is that the research was just catching up with them. I should make one reference to something which Roy Hattersley, then a member of the Labour Cabinet, said in a radio programme in June 1978. It puts the "party political ends" point in context. He said:
"By and large, having set up the National Enterprise Board, or the Price Commission, or the Monopolies Commission, or the General Medical Council, I would want to believe that I'd so equipped it in terms of the membership that they took the right decisions, and I would think it extraordinary if nine times out of ten I didn't want to endorse their recommendations".
So much for politically independent bodies run by politically independent people. One could go on at some length on this and I wish we had more time to do so. However, I think what really matters at the end of the day is the point that Peter Walker the Secretary of State for Wales made in another place in a Written Answer to a Question about the information that he sought concerning candidates for public appointment. On 21st October 1988 at col. 1016 of the Official Report Mr. Peter Walker replied:
"Prior to appointment we seek details for candidates' past and present occupations, relevant specialisms, areas of interest,
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previous or existing appointments or voluntary service, time availability for public duties and ability to speak Welsh.
Once appointed their performance is regularly assessed and certainly taken into account before any decisions are reached on either reappointment or further appointments".
On a personal note, I should say that one of the tasks that I had in Government was to look at the reappointment of a Member of your Lordships' House who was the chairman of one of the bodies about which we are talking. We decided he was doing such a very good job that we had no hesitation in reappointing him, despite the fact that he sits on the Labour Benches.
I understand the thrust of this debate. As I said at the beginning, I am not without sympathy for it. But if local government is to retain its autonomy to a greater extent than it has been able to do in the past, it must do all the things it was statutorily set up to do. If it concentrates on that and does not digress from it, some of the more outrageous things that have happened in local government in the past will occur less frequently in the future.
3.39 p.m.
Lord Bottomley: My Lords, it affords me pleasure to take part in a debate in which many of my noble friends are playing their part. The noble Lord, Lord Bellwin, who has just spoken, was very helpful to the town of Middlesbrough when he was a local government officer. As a local government leader he was outstanding. However, I regret to say that since he left local government and became a Minister and then came to this House, he has never lived up to those high standards.
The noble Lord, Lord Jenkin of Roding, and I worked together in the same district. The noble Lord has great knowledge of local government. It is my belief that if he had been able to pursue the policy in which he believed, local government would not be in the weak position that it is today.
When the noble Lord, Lord Rippon of Hexham, was Secretary of State for the Environment, I told him that we should do something to remind the public that our democratic society won through to victory in the last war. I told him that one way in which he and I could make a contribution would be to get a statue as a tribute to Attlee placed in the House of Commons Members Lobby. The noble Lord, Lord Rippon, was very enthusiastic. Both of us in due course were present at the ceremony when Attlee's statue was erected.
I became a member of Walthamstow Borough Council in the late 1920s. In 1945 I became the mayor of that council. That just shows how old I am getting. The council was very representative. It included civil servants, teachers, trade union officials, factory workers and housewives. Those people provided a very high standard of local government services for housing, schools, public cleansing libraries and museums. Three members of that local council eventually became members of the Labour Government in 1964.
Walthamstow Borough Council was able to experiment in providing other services. It provided one of the first maternity hospitals in the country

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and one of the first day nursery schools. In the field of education it also introduced a system whereby two central schools were selected in which the school-leaving age was increased to 16, a forerunner of the national increase in school-leaving age to 16.
Thus local government can experiment in the introduction of social services of one kind or another which in due course could be adopted nationally.
A good example of how local government serves the public is provided by my own war-time experience. I was chairman of the Air Raid Precautions Committee after the passing of the 1935 Act. When war broke out in 1939 we were ready to meet enemy bombardment. The first fire-watching scheme in the country was introduced by me, as a trade union officer with the National Union of Public Employees, and the town clerk of Westminster, Parker Morris—the father-in-law of Lord Jenkins of Hillhead.
I became very active in the civil defence service and when Winston Churchill became Prime Minister I was invited to become a deputy regional commissioner for the South-East of England. There were 96 local authorities and the task of the commissioners was to co-ordinate their work and liaise with the Army and the police. That could not have been achieved by central direction. The work done by the local authorities was outstanding and the late King George VI acknowledged it by sending a personal letter to each of the commissioners. That answers the Prime Minister's contention that local authorities are not accountable, are inefficient and irresponsible.
Over the past 50 years, local authorities of all political persuasions have carried out their duties efficiently and in the interests of those who elected them. Over the past nine years the Government have progressively and deliberately deprived elected authorities of their powers and have vested those powers in Secretaries of State and civil servants. Since the Conservatives came to power in 1979 there have been 46 local government Acts of Parliament and 12 major changes in local government finance. The Government have undermined the confidence of members of local authorities of all political persuasions who have worked so hard for the good of their communities. Local authorities, the Churches, the CBI, trade unions and other organisations are opposed to present government policy.
In creating quangos to replace local government the Government have packed their boards with political sympathisers. A comparison of the membership of 22 quasi-autonomous non-government organisations in 1979 with their membership today shows that two-thirds of the chairmen had connections with the Conservative Party, nine were active members of the party, four were directors of companies which subscribed to the Tory Party. Since 1979 fewer members have been drawn from local government and community organisations than ever before. More and more businessmen are taking their places. Women are under-represented. There is a greater chance of being invited by this Government to sit
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on a public body if one has been to Eton or Harrow, than if one is a member of a trade union or a social organisation.
By the creation of boards for transport, health, police, docklands and a range of other services, the powers of local government are being further diminished. Those boards meet for the most part behind closed doors, well protected from criticism by a buffer of public relations officers. They are not accountable to the public that they endeavour to serve.
I did the groundwork for my work in national politics as a member of a local council for many years. As a councillor, one is in daily contact with the electorate and the administration, working closely with local government officers. The weakening of local government is a threat to democracy itself and the Government stand condemned for their policy.
3.45 p.m.
Lord Jenkin of Roding: My Lords, while I am grateful to the noble Lord, Lord Bottomley, for his half-kindly reference to me, I can reciprocate by saying that in our part of London he and his very distinguished wife have played a most notable part in local life, she particularly in the health service. That is remembered widely by many of the older of my former constituents.
The noble Lord, Lord McIntosh, started with a proposition with which everyone would agree, namely that all governments have made use of quangos. It is a perfectly acceptable means of making arrangements for public service. However, when he started talking about the multiplication of quangos he left me behind. There has never beer aquango-making period remotely to compare with the period of the first post-war Labour Government who transferred huge swathes of private industry, co-operatives, local authorities, charities and many others into the hands of government-appointed nominees. What is more, every successive Labour Government have sought to repeat that process. One has only to look at the last Labour Government of 1974 to 1979 to see that further swathes of the economy were brought under the control of government-appointed quangos—the aircraft industry, the shipbuilding industry, computer companies and many others.
That process has been most decisively reversed in the past nine years, to the huge benefit of the public, of the economy, and, moreover, of the employees in those industries. It has always remained a complete mystery to me why week after week in both Houses of Parliament Labour politicians complain about the conditions of employment of those in the public sector and in the next breath demand that there should be many more of them by bringing industries back into the public sector.
Now I turn to the bodies with which this debate is particularly concerned. My noble friend Lord Bellwin has given the figures and I shall not repeat them except to make one point. I was responsible for the creation of 193 district health authorities in the place of 90 area health authorities. That was a

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process of devolution to the more local level, which I have to say—and the noble Lord, Lord Ennals, is nodding in agreement—was widely welcomed in all parts of the country. That comprised much the largest part of the small increase which went some way to offset the major reduction in quangos. There has been a net cull of over 500 quangos since 1979. The message is clear. If one is looking for quango breeding, go for the Labour Party; if one wants to reduce them, vote Conservative.
Lord Ennals: My Lords, will the noble Lord allow me to intervene? I am most grateful. One of the reasons why I nodded in agreement with him was that he had to take that action in order to put right the tremendous increase in quangos created by his predecessor as Secretary of State, the noble Lord, Lord Joseph.
Lord Jenkin of Roding: My Lords, I am grateful to have the noble Lord's support for what I said. I believe that mere numbers are not necessarily the most important point if one obtains further dispersal of power away from the centre.
I should like to refer to some of the points made by the noble Lord, Lord McIntosh, and draw on my experiences at the Department of the Environment. Let us look first at the rules regarding the making of public appointments of which the noble Lord had some criticism to make. I worked to what was called Issue 3 of the Civil Service Department Guide on Public Appointments Procedures, dated April 1984. On looking through that, one sees that the details are spelt out in two letters dated in 1976—one from Sir Kenneth Stowe, the Labour Prime Minister's private secretary, and the other from the Head of the Civil Service, Sir Douglas Allen, now the noble Lord, Lord Croham. They spelt out the procedures. which were exactly the same under the Conservative Government as under the Labour Government. There had been no change in form or substance from the rules operated by the government of whom I was a member.
The noble Lord, Lord McIntosh, says that surely No. 10 has had a great influence on public appointments. Those procedures spell out the precise order of events before one can approach someone about a public appointment. One of the essential steps is that before one can even speak to someone—it was the same in 1976 as it was when I was in office—one has to put one's proposal to No. 10 and have it accepted.
The Public Appointments Unit—the PAU—maintains a central list of between 5,000 and 6,000 names of people from all walks of life. Although it is aimed primarily at providing candidates for more senior appointments, it is no longer right to refer to it as simply a list of "the great and the good". It is the source of information for a wide range of appointments, including major regional and departmental committee appointments. The central list contains the names of people from a wide range of disciplines, professions and occupations, as well as the names of generalists.
The list also contains the names of people in what are sometimes referred to as special demand groups.
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The noble Lord, Lord McIntosh, referred to women. There has been a great increase in the number of women appointed to public bodies in recent years, not least because there are now many more women on the central list. There are also younger people, members of minority groups and others who it is felt should be considered for appointments. There is also a list of retired civil servants.
The noble Lord referred to political nominations. Many people think that there is a separate list of political nominations. It is right that the political affiliations of those people on the central list should be noted, but there are no formal arrangements—there were certainly none when I was in office—operated by the Civil Service for receiving a flow of nominations from any political party, national or local.
Lord Dean of Beswick: My Lords, the lessons of experience contradict the noble Lord's comments. When people like myself raise questions about political affiliations being known with regard to appointments to district and regional health boards, we are told that such affiliations are not listed. Who is right?
Lord Jenkin of Roding: My Lords, I am reporting the procedure that operated when I was a part of it.
Thus, when an appointment is to be made, it is officials—civil servants—who consult the PAU. They add some names from their own lists. They then consult the Prime Minister and, with the Prime Minister's consent, approach the first choice. It is a set procedure operated by the Civil Service in all departments on behalf of their Ministers. If it had been subverted to the extent that the noble Lord, Lord McIntosh, has sought to suggest, he in fact makes a serious accusation about the political impartiality of the Civil Service.
When I made appointments, I tried to achieve a balance. In some cases, I succeeded. I quote as one example the appointments to the Widdicombe Committee. Although it was well known that that committee was set up to look at abuses within local government which had been widely commented on, the committee was chaired by someone who had been a Labour parliamentary candidate. The committee members included a distinguished local government official, one capable businessman, a very distinguished public servant who was certainly not of Conservative persuasion and a lady with wide experience of local and public affairs; only the last name had any Conservative affiliations and those were pretty tenuous. It was an excellent committee. I consulted all the local government bodies and all the political parties; they all eventually agreed to co-operate despite the fact that the intention of the Widdicombe Committee was clear. In this Session we shall debate some of the recommendations that flowed from that report.
My noble friend Lord Bellwin referred to urban development corporations. I do not wish to repeat what he said. It was always our practice to consult local authorities informally, but I have to say that during my time most of them refused to have anything whatever to do with the corporations and

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declined to nominate people. They imposed conditions that they knew perfectly well the Government could not possibly accept. We always invited local councillors to serve,
"as persons having special knowledge of the locality".
To their eternal credit, three distinguished council leaders in London—Paul Beasley of Tower Hamlets, Jack Hart of Newham and John O'Grady of Southwark—agreed to serve, despite the total hostility of their own local authorities. When their terms of office expired, we were unable to recruit anyone from the councils to replace them, except more recently in Tower Hamlets where political control has changed. It has now accepted a place on the LDDC. Newham and Southwark still refuse to do so.
I have tried again and again to persuade a representative of Liverpool City Council to serve on the Merseyside Development Corporation, but the council has refused. It does not lie well in the mouth of the noble Lord, Lord McIntosh, to say that there has not been proper consideration regarding the appointment of Labour nominees. They were asked again and again, and again and again they refused to serve. Happily, wiser counsels now prevail in Liverpool and a council representative now sits on the Merseyside Development Corporation.
Bristol is an even more absurd example. The Government invited two city councillors and a councillor from Avon Council to sit on the Bristol Urban Development Corporation. On consultation, the city council took an official line of non-co-operation and the county council voted down acceptance of a place. Happily, its members were wiser and the individuals approached chose to outface their colleagues and serve rather than boycott the corporation.
We had problems with the appointment of a deputy chairman for London Docklands to replace the noble Lord, Lord Mellish, (to whom I mentioned the matter) at the end of his distinguished period of office. We looked at a range of possible successors because we always took the view that it was wise to have a Labour deputy chairman to balance a businessman chairman. We considered the noble Lord, Lord Northfield. The noble Lord, Lord Graham of Edmonton, was approached, but he very properly made the point that he would have had to give up some of his Front Bench appointments and was therefore unable to accept. We eventually appointed John Mills, a Labour councillor from Camden. When he had to be replaced last November, the noble Lord, Lord Cocks, took his place. Perhaps I might tell the noble Lord, Lord McIntosh, that his name was on the list but he was not approached because it was felt that he would not have accepted in view of his Front Bench responsibilities.
The idea that we have not appointed Labour people is absurd. If one looks at other authorities—water authorities, development councils and so on—one sees that that is not true. I totally reject the main accusations made by the noble Lord, Lord McIntosh. I believe that the Government's record in handling appointments to those bodies has been of
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a very high order and has not had the political bias to which he referred. I believe that he grossly overstated the case and has left out of account entirely the efforts made by myself and others to try to obtain nominees from other parties only to find that they refuse to serve. I think that this Motion is a lot of nonsense and I hope that the House will treat it as such. It may be a point of some interest to the Labour Party to debate the findings of the Labour Research Unit, but I do not believe that they have much purpose or relevance to reality.
3.59 p.m.
Lord Graham of Edmonton: My Lords, the noble Lord, Lord McIntosh, introduced a word which is not easily used either in this Chamber or in another place; namely "patronage". We should not baulk the issue. We are politicians. One of the arts of being a good politician is the manner in which one uses the patronage and privilege that one has. I believe therefore that it is perfectly proper arid sensible for this House to spend a short time in 1989 reviewing the history of patronage used primarily by central government over the past few years.
The noble Lord, Lord Bellwin, spoke from his long experience. He was able to persuade me of the attempts that he has made to achieve an appropriate balance. That does not always mean an exact balance. The noble Lord, Lord Jenkin, was kind enough to indicate to me that he was going to refer to the situation five years ago when certainly did not object to being approached. However, I indicated to him then, as I indicate to the House now, that I was sent here, not in order to obtain perhaps a post somewhere else, but to be a working Peer on behalf of the Labour Party, and I was not prepared to accept his offer although I told him that I appreciated his thought at the time.
We are considering situations that are light years away from the reality of 1989. We are looking at the situation from a period that I would categorise as bipartisan when attempting to make sure that major public bodies have some semblance or balance. The noble Lord, Lord McIntosh, makes a charge that I believe is well founded. It is that patronage and privilege is being used excessively for party political ends in 1989, far beyond what those of us who have served in public life for 20 or 30 years—or, as my noble friend, Lord Bottomley said, perhaps 50 years or longer—have experienced. The situation has radically changed. We are inviting the House to say that it is not good for public life and it is certainly not good for local government.
When one wants to know about the quality of life as a public representative on a council one does not listen to what I say from my experience but one goes to the councillors in one's community, whether they are Labour or Conservative. In 1989 am still able to keep up my contacts with the local councillors of both political persuasions in Enfield.. It is not a question of nostalgia, or of saying, 'Things ain't what they used to be." It is a question of considering the quality of life as a councillor in 1989. That quality of life has been made far worse not only because of the problems but because of the attitude of this Government and above all else of the Prime

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Minister. Reference has been made to the urban district councils, in particular London. The anti-democratic nexus was the crux of the argument in 1979, 1980 and 1981. I was heavily involved in the arguments on the planning and land legislation. I supported the view of my party and local people that the creation of the urban development corporation would not be the best way forward. I have to admit in 1989 that the record of the London Docklands Development Corporation is a very fine one indeed. Those people who have been associated with it are entitled to take most of the credit, although not all. With the passage of time, it means that councillors, not only in London but in many other places, are political realists. There was a period when consultation, and simply saying, "No", was perhaps the mode of the day. However, the councils have to work with the government of the day. They have to try to reconcile passionately held beliefs. What has happened in local government has borne that out over the period.
When one talks of the extent to which this Government have interfered and used patronage, one can talk in terms of personalities and appointments. The noble Lord, Lord Bellwin, decided to illustrate the extent to which trade unions and trade unionists were part of the picture some years ago. I may have written it down incorrectly, but I understand that 39 members of the TUC General Council were members of 180 quangos. I bet that the noble Lord could not find 39 members of the TUC General Council who are members of those quangos today—nor 29 or 9. Some might say that the trade union movement is marginalised and irrelevant, and that there are not as many high serving members of trade unions who are competent to serve on a range of bodies as were indicated by the noble Lord, Lord Bellwin. But if one is not prepared to give them a fair share—and I believe that the charge we are making is that they are not getting a fair share—then I believe that the noble Lord, Lord Bellwin, should be as worried as I am.
Lord Bellwin: My Lords, will the noble Lord be kind enough to equate his question on the representation of trade union people with the representation of Conservatives during the same period of time?
Lord Graham of Edmonton: My Lords, it is interesting that the noble Lord says that to be a trade unionist ipso facto is not to be a Conservative. I do not argue that there is not an imbalance. The point is that 39 out of 180 is a gross distortion of a fair proportion. I am saying that not only were trade unionists represented, but, as the noble Lord, Lord Jenkin, indicated when speaking of earlier days, the Co-operative movement was inordinately well represented.
I shall give way to the noble Baroness, Lady Blatch, although she has some 12 minutes of her own later. I also give her some of my time in order to keep the balance. The trade union movement and the Co-operative movement have men and women who are able to serve in public life. But they are being denied that opportunity not because they do not have the able men and women but for party, if not political purposes.
Baroness Blatch: My Lords, I thank the noble Lord for giving me a few seconds of his precious time. Has he taken into account the TUC's decision not to become involved in the Government's training schemes? It was invited to do so but chose not to become involved.
Lord Graham of Edmonton: My Lords, a body as powerful and influential as the TUC is entitled to consider how best it can demonstrate just how much it dislikes government legislation. If it decides not to be represented, that is its decision.
However, we are talking about a trend—a mood. We are discussing what has happened in public life over the past few years. I make the charge that this Government, and, above all, the Prime Minister, are responsible for changing ordinary people's willingness to serve in public life.
Among many other sensible words, the noble Lord, Lord Bellwin, introduced the words "accountable" and "accountability". He says that people are just as accountable now. I do not believe it. I believe that there are fewer people willing to serve in public life now than ever before. When people today consider what is in it for them—and I do not refer to money —in terms of satisfaction, being able to influence events and taking decisions on behalf of local communities in comparison with the past they feel that there is nothing in it for them. Many of them are wretched, in particular those who have good memories of the position 10 or 15 years ago.
Let me tell noble Lords what is happening in Enfield today. We now have a proposal being brought forward before the council to put all council services out to tender—not just those that the Government are suggesting, but all of them. We want Enfield run as Enfield plc. We want two categories of director—executive directors who are the council officers and non-executive directors who are the councillors. Every 12 months we shall report to the shareholders, who are the people who live in Enfield. At the end of the day that may give a better and more efficient service, but what about the nexus of accountability? What about the nexus of community? And what about making life worth living for those people? We ought to listen carefully to what other people are saying.
I have here an article written in the Observer magazine a few weeks ago and I believe it sums it up.
"But the charge against Mrs Thatcher goes deeper than this. All governments may have made politically motivated appointments from time to time; only she, it seems, has systematically subverted the country's institutions, breaking their independence and bending them to her will. Political commentators have long theorised about her hostility to all 'intermediate institutions': local government, the trade unions, the broadcasting organisations, the universities, the Church. When she cannot abolish them altogether, the argument goes, she packs them with her placemen".
I believe that that charge is well founded. When the GLC proved that it was not prepared to bend, it was abolished. When the Inner London Education Authority proved that it was not prepared to bend, it was abolished. When football proves that is has difficulty in managing its problems, a quango is to be created, the Football Membership Authority, which will be able to run football—except in the

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small print we find that it has to have the endorsement of the Secretary of State. I believe the Government's attitude is summed up by what the Prime Minister said last week, "Bag it, bin it and then we will win it"
4.12 p.m.
Lord Rippon of Hexham: My Lords, it has never, at least until recent times, been a principle of the Conservative Party that the gentleman in Whitehall really does know best. I was not wholly happy to hear my noble friend say that he operated in these matters under some department directive. I did not know about it in my time. Perhaps I should have, but I have always believed that, while it is perhaps nice for noble Lords opposite to have their names on the list of the great and good, there are great and good outside the list which is kept in Whitehall.
Of course a Conservative Government or a Conservative Minister may believe that power has been exercised wisely and fairly, but that is not a good or sufficient argument for increased central control. The trouble is that the nominated body looks towards those who nominated it and away from those elected to represent local interests and opinion.
Indeed I have now come to the conclusion that preventing central government, the executive, from wielding power almost to the exclusion of all rivals has become an urgent task. The process of centralisation for the sake of good government, central as well as local, should be halted and halted now. My reminiscences cannot go back as far as those of the noble Lord, Lord Bottomley, but when I went into local government in 1945 on my council, there was the Accountant General of the Ministry of Pensions and another high ranking civil servant, a director of a large public company, a senior partner of a firm of London solicitors, and the secretary general of the Municipal and General Workers Union. I can remember when in 1949 at the conference in Torquay of the Association of Municipal Corporations the late Mr. Walter Elliott, himself a great Minister in charge of local government at one time, warned about the growth of nominated bodies. He cited the example of the Roman and the Chinese Empires, which eventually both collapsed under the weight of centralised bureaucracy which could no longer recruit at the periphery.
Local councillors directly elected play a vital role in the maintenance of a free and responsible society, because they are the representatives of local public opinion. They are responsive to local needs and wishes and they are, I emphasise, an essential counterbalance to the immense and growing power of central government. When a Conservative Party is in opposition it understands that. I wish we could recognise that the purpose of local elections is not to recruit those who are acceptable to existing authority. Traditionally if there is a Conservative government the Socialists win the local elections. It is very hard on councillors that this should be so. The reserve position applies when there is a Labour government when we win the elections.
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I entirely agree with those noble Lords who have said that the diminution of local democracy by the transference of great blocks of power to ministerial nominees is dangerous. Ministers are but shadows. They come and go, but these Whitehall mandarins remain with their directive telling Ministers whom they should or should not nominate. Not that I believe that every Minister takes that advice because if one looks at who is appointed there is a tendency for people to appoint those whom they think support them rather than those whom they think do not.
To come to more recent times, I was reminded in an article in the Financial Times on 7th February by Mr. John Humphries, the chairman of the Environmental Council, that when in 1973 I introduced the Water Bill and set up the existing water authorities, I then gave an assurance in the name of the Government that the local authorities would have an absolute majority on the water authorities' boards. It could then be argued that there was simply a change of form not of substance. The ratepayers who had bought all the infrastructure and paid for it were told that they would still have ultimate control over it, but in 1983 the Government quietly changed the rules of the game by removing most of the local authority members. They did not ask for this or that member of the council to go on to the boards: they were told that they must all leave. I deplored that action then and I deplore it now. In the process the Government effectively transferred the ownership and control of the assets which previously belonged to the ratepayers into their own hands. The effect, as Mr. Humphries says in his article, is that,
"the Government are selling something that they do not own and for which they have never paid".
Lord Dean of Beswick: What about compensation, my Lords?
Lord Rippon of Hexham: The compensation should go to the ratepayers, my Lords.. They should have their assets back. On 31st January, the Government in their Statement introducing their proposals for reform of the National Health Service announced that in future local authorities would lose their present rights to appoint direct their own members of health authorities. That moved me to ask the Minister who had made the Statement and who is replying to the debate today why the Government persistently regard democratically elected councillors as unrepresentative of local inerests and concerns. To that I received the reply that the object was to confine the numbers involved on boards to people who have a straightforward, technical contribution to make. On that basis I suggested that government might as well be run by Permanent Secretaries instead of Ministers. All this was being done, I was told, and I quote from the Statement:
"Authorities will need to be organised as more effective decision-making and managerial bodies."—[Official Report, 31/1/89; col. 1004.]
But efficiency as the greatest social good has been the cry of despots throughout the ages. I am not particularly impressed by the record of Mussolini just because he made the trains run on time.

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The doctrine that central executive power is exercised in the name of efficiency is not confined to any one political party. It can come from the Right or the Left. What concerns me is what elective dictatorship, of which my noble and learned friend Lord Hailsham of Saint Marylebone wrote, has come not from the Left but from the Right. Labour Governments have nothing to boast about in that regard. My noble friends have already referred to their not wholly satisfactory record. Change the government and you change the tune. I am concerned that over many years covering successive governments the status of the elected member has been seriously eroded by the growth of public bodies whose members are nominated by a higher authority or by the Minister.
I do not believe that the charge is answered by the Government saying that they have abolished a number of quangos. Some are purely governmental bodies. I regret the departure of several, such as a small committee of mine responsible for bird-watching in the Royal parks. It did not cost much money and as a statistic is not very impressive.
Nor do I believe, as one of my noble friends on the Front Bench recently said, that it is any good for the Government to say that they have given people more freedom to buy their own homes and to choose local education. It is not good enough to say, "You can have the freedoms that we choose to give you but not the freedoms we do not choose to give".
When a Labour Government was in office the Conservative Central Office produced a nice little document which is still worth reading. It is entitled Guidelines for good local government. It stated:
"Conservatives oppose the growing tendency to make all decisions in Whitehall. Labour, on the other hand, sides with Whitehall against town hall".
Our cry in the Conservative Party used to be, "Town hall, not Whitehall". It was the party opposite which was then the prisoner of the central bureaucracy.
I also recall a draft election address issued by Conservative Central Office for use by local candidates. It denounced the taking of power out of the hands of local councils and giving it to people who had not been elected but hand-picked by the Minister. It proclaimed:
"This is a vicious system, not what should be expected from Socialists who are always talking about democracy".
There is just one question I want to put to the Minister. Why is a system which is vicious when there is a Socialist Minister any less vicious when there is a Conservative Minister?
4.22 p.m.
Lord Dean of Beswick: My Lords, I am grateful to be able to follow the noble Lord, Lord Rippon. Some years ago I was one of a delegation of junior councillors who on several occasions saw him when he was Secretary of State for the Environment. Although we differed politically we gained the impression that our comments were heeded. They may not have been acted upon but there was some sympathy towards them.
I am glad that the noble Lord referred to the appropriation of the water authorities. I recalled that
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when I left Manchester as leader of the council the valuation of its water holdings was between £250 million and £300 million. That has been taken away without compensation. When the privatisation is complete and all the surrounding land has been flogged off to the private sector, not one penny will go back to the ratepayers of Manchester who helped to develop that. I declare an interest as a ratepayer in two areas in Greater Manchester. I have a property in Tameside and another in Manchester.
I was interested to hear the noble Lord, Lord Jenkin, refer to his democratisation of the health service. If he did what he said, then I applaud him. Can I expect that he will join us in our stand against the Government's new proposals which will remove every local authority representative from the new health authorities? I hope to see him stand and be counted on that issue, because that is the intention of the present Government.
I hope that noble Lords will forgive me if I localise my argument. Most of the debate has so far been related to urban development corporations. I am not against them; initially I was opposed to them. It is nonsense to say in the Chamber today that they were willingly accepted by the local authorities in whose areas they were planted. They were accepted reluctantly. Some of the cities on which they were imposed were in the process of huge developments freely entrered into with various bodies such as Phoenix Initiatives. However, the corporations exist and it is wise for local authorities to join in and make them work. That was the advice that I gave when asked.
I should like to turn my attention to the residuary bodies. The noble Lord, Lord Jenkin, was the Minister when the Local Government Act was passed which set them up. I dealt with the Bill with my noble friend Lord Graham. I have the impression that some of the residuary bodies are now involved in activities never dreamt of by the noble Lord, Lord Jenkin. I believe that that is probably because of a change of Secretary of State. We on these Benches have always said that one should not expect Secretaries of State to behave consistently. One may act in a completely different way from another.
I recall our discussions on the Local Government Bill, in particular the residuary bodies. We asked how they would be formed and what their powers would be. Subsequently a situation arose in the Greater Manchester area about which concern was expressed in the press. It was the development of the site of the old Central Station in Manchester, now known as G-Mex. I believe that the noble Lord, Lord Jenkin, knows about that. I was not the only person to be concerned about some of the rumours which were being circulated in the responsible press regarding the financial arrangements. The body had been set up by the previous Greater Manchester Labour Council. I believe that it got it wrong and made an appalling blunder at that time.
At the time I was concerned about what I read in the press and I sent a full briefing of my information to the Secretary of State, the right honourable Kenneth Baker. He was also concerned. Nothing was made public because I understood that if the matter was reported in the press commercial damage could

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be caused. I met Mr. Baker and the noble Lord, Lord Skelmersdale, and the noble Lord, Lord Elton, who was then a Minister, to discuss the matter. I was concerned by the fact that rumours were being spread that the new chairman of the residuary body—whose name I did not know but I knew that an appointment with him had been made—had been placed on the board by the then chairman of the company who had been chief executive of the Greater Manchester Council.
I am convinced that I am right about what Mr. Baker said. He said, "No, I have placed the chairman of the residuary body on that company to safeguard the ratepayers' money". The ratepayers held 51 per cent. of the shares in that company but had no say in how it was to be operated. It was the first time I had heard the name when Mr. Baker said, "Do you know Peter Hadfield?"; I said, "I have never heard of Peter Hadfield". He said, "He is the new chairman and he will look after the interests of the ratepayers concerned".
Developments took place which resulted in my tabling a Question in your Lordships' House in the middle of last year. I discovered quite obliquely that the chairman of G-Mex had been removed from office by the chairman of the residuary body and he had taken his place. When I asked the Question in your Lordships' House the noble Earl, Lord Caithness, said that he had been removed because he had ceased to operate the company in the public interest. That was the official answer. Subsequently, the person involved has disappeared from the scene and the chairman of the residuary body is in charge.
But that is only part of the argument, because another company is involved which is known as Greater Manchester Property Trust Limited. The former GMC set up a complex web of companies to manage and control this site. These companies have never reflected the interests of the public sector nor the level of public financial support which was provided. The public sector had no power to nominate members or directors, to control remuneration levels or the finances of the company, or to monitor the affairs of the company. Elected members were specifically excluded by the constitution of one company to become directors.
There was, I believe, £20 million of funding put in to start this company off; and what activated my concern was a prediction of enormous debts accruing. I did not see why I and my family should have debts loaded on to us through the rates ad infinitum by the actions of the chairman of a residuary body or anybody else, taking control. Suffice it to say that it has taken over two years for the chairman of the residuary body and his chief executive officer, who, by the way, was the legal officer of the former Greater Manchester Council and who I would have thought had some say in drawing up the original legal concept, to set this company in being. But it has taken him over two years to sort it out and either he or somebody in his department, as the senior legal officer working for the Greater Manchester Corporation, must have been responsible for drawing up those contracts.
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Turning now to the present situation, where obviously there is a dispute going on involving the City of Manchester, I do not want to get involved in the political arguments there although I do not see eye to eye with all that has been done. Nevertheless it is the elected body in Manchester; a short while ago it was trying to negotiate development as an adjunct to this particular site and was told by the residuary body "Hands off'. What the chairman has done in order to bolster his strength in connection with Greater Manchester Property Trust Ltd. is to appoint all the members of the residuary body as directors and also two of the leaders of other councils in the area (Labour-controlled) as directors in order to discipline the City of Manchester. I do not believe that the noble Lord, Lord Jenkin, when he brought the Bill through Parliament had any idea that such a situation was going to develop.
The point I want to put to the Minister is this. I understand that the papers are now there; an order has been laid, and is available, which is intended to wind up the Manchester residuary body. What happens to that company when it is wound up? The residuary body is set up only on a limited lifespan of five years—I think I have that right—and the period can be extended somewhat by the Secretary of State. Does it mean that in June, July or August of this year, if it is wound up, the chairman of the residuary body and all those directors he has appointed will cease to have any control? Will it then go to the people who are expected to provide the money to keep it going—that is, the ratepayers in the 10 districts of the former Greater Manchester metropolitan authority?
I have a specific interest because I am going to have to pay two lots of rates in Greater Manchester. In my opinion, my rates should be fixed by the local authority and there should not even be one infinitesimal part of that which should be fixed by the chairman of the residuary body. I n real terms that can happen—and incidentally today's debate will be only the forerunner of another debate. There is not the time to go further into this today, and I do not want to go over my allotted time because it is grossly unfair to do so. But I have to tell the Minister that I shall be coming back with more detail to this matter when the order is placed here to wind up the residuary body because there are a lot of questions that need to be answered. There are 2¾ million people living in the Greater Manchester area and I do not believe that residuary bodies were brought into being by the noble Lord, Lord Jenkin, to get involved in this type of activity.
I speak on a specific problem. I do not know what is happening with residuary bodies in other area, but I must tell the Minister that I shall be coming back to him on this matter at a later stage, depending on his answers.
4.34 p.m.
Baroness Blatch: My Lords, I shall start by declaring an interest in that I was one of the people who appeared in an honours list in, I think, 1983 when I received the CBE and also later in 1987 when I was elevated to the peerage as a working Peeress, along with the noble Baroness, Lady Blackstone, and

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the noble Lords, Lords, Lord Peston, Lord Johnston and Lord Trafford.
I hope the noble Lord, Lord McIntosh, will forgive me if I say to him that today he did not give us the usual impressive performance in the House which we are used to. I may be wrong but I suspect that he has been put up to this debate because he did not appear at any time go give the arguments observable commitment. Much of his case had more to do with the fact that he does not like the Government's policies: for example, the creation of CTCs, the opting out clause of the Education Act, the various housing initiatives, the abolition of the GLC and so on.
The Motion on the Order Paper today calls attention to the growth of non-elected bodies, yet in his opening statement the noble Lord said that his Motion had nothing to do with the growth of non-elected bodies. It is further concerned with the system of patronage, yet he talked much less of that then of his disquiet that too many Tories are being appointed.
As was pointed out by my noble friend Lord Jenkin, the system has not changed since the time of Labour Administrations in the 1970s. The number of non-elected bodies achieved its peak under the Wilson and Callaghan governments of the 1970s. In the closing years of the last Labour Administration we saw very rapid and considerable growth in the number of non-elected bodies. Coupled with an energetic nationalisation programme covering oil, shipbuilding and aerospace, patronage at that time by the Labour Government for their supporters was rampant. Executive action was increasingly the prerogative not of the government of the day but of the quango.
At the close of the last Labour Administration in 1979 plans in the pipeline included the creation of a national planning commission, a national transport planning authority, a communications council, a public broadcasting commission, a national youth body, a central advisory committee on education, an industrial democracy commission, four new broadcasting authorities and seven new advisory committees on the media. By 1979 there were more than 3,000 non-elected bodies to which Ministers had appointed more than 40,000 political placements.
In 1979, on coming into office Mrs. Thatcher and her Government set about the task of reducing the number of non-elected bodies. First, an audit of such bodies was put in hand under Sir Leo Pliatzky, a senior civil servant. When he reported (in Cmnd. 7797) in 1980, his findings confirmed the massive growth of non-elected bodies under the previous administrations. The main concerns of the Government at that time were that there were too many quangos, that they were too heavy a burden on the public purse and that there was very little accountability to Parliament. By 1982 the Conservative Government had achieved reductions of around 20 per cent., and that has since risen to between 25 and 30 per cent. That does not include the Government's privatisation programme.
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As regards the patronage system used by many previous Labour Administrations, we need no lectures on this side of the House on that issue. As I have said, patronage by the Labour Government of their supporters was rampant and the figures I was going to use in this connection have already been used twice already during this debate.
I must declare a further interest in that for about three months I served on the European Economic and Social Committee in Brussels, and I can confirm that not all the appoiontments made by this Government were Conservatives. A further declaration of interest is that until recently I served as a local government representative on the board of Peterborough Development Corporation. Government appointments to that board by this Government have included Labour supporters and Conservatives, together with, I believe, one SDP member in the past. However, the board as a whole was predominantly apolitical. Indeed, if I were to make a comparison between the work of the development corporation and my own local authority, it would be that the development corporation got on with the job in hand in a completely apolitical manner, whereas in my local government authority the atmosphere is highly politically charged most of the time.
The area of non-elected bodies that I know best is development corporations. The new town development of Peterborough was achieved by successful co-operation between the corporation, a Labour-controlled city council and a Conservative —subsequently a hung—county council. The setting up of urban development corporations has proved equally successful—that has already been touched upon by my noble friend Lord Bellwin—by combining public and private sector finance with specific statutory powers to acquire land and buildings in order to secure the regeneration of run-down inner cities. Membership of these bodies reflects public and private sector interests and with few exceptions they have secured the co-operation of local government to achieve what is, or should be, a common objective—the regeneration of run-down areas. Where instances of poor co-operation have occured, it has almost invariably been due to Labour-controlled local authorities.
There is an argument that says that if local authorities were given money they would achieve the improvements for their areas. I am afraid that that is simply not so. Local authorities—I am a member of a local authority and I believe emphatically in local government—have many pressures on them. To presuppose that such concentrated expenditure over a defined period of time would take precedence over other needy programmes without serious interruption is wishful thinking. Development corporations with clearly defined objectives, using private and public sector funds and working co-operatively with local authorities of any or no political persuasion, are a recipe for getting the job done.
The Government have done more than any government before them not only to stem the growth of quangos but to reduce the overall number and their consequential costs on the taxpayer. More significanly, they have made such bodies

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accountable to Parliament. In 1979 the Government included in the terms of reference of departmental Select Committees the function of scrutinising the work of government departments and associated official bodies. In 1981 Ministers were made responsible to Parliament for the effectiveness, efficiency and financial control of associated departmental quangos, thereby allowing questions to be asked openly on the Floor of the House.
The Motion is strongly drafted and the wrong arguments have been used to support it. The concerns of the noble Lord, Lord McIntosh of Haringey, and his colleagues about the growth of non-elected bodies, the patronage system and the effects on local government are entirely misplaced.
4.42 p.m.
Lord Hooson: My Lords, there are three propositions in the Motion. Before I address myself to them I should like to make a few general observations on the debate.
I particularly agreed with what the noble Lord, Lord Rippon of Hexham, said. I am sure that the right approach to the Motion is not a statistical one; it is what is happening to the country. The noble Lord referred to one of my pet hobbyhorses, that is, the lecture some years ago by the noble and learned Lord, Lord Hailsham of Saint Marylebone, on the elective dictatorship and his subsequent book The Dilemma of Democracy. In that book he envisaged absolutely accurately that within the country, if anybody cared to use the powers and did not have those inbuilt restraints that mercifully most leaders of any party have always had, there is the power to exercise complete dictatorship, subject to election every four or five years as the matter comes up. I entirely agree with the noble Lord, Lord Rippon, that one of the greatest countervailing influences would be the restoration of pride, responsibility and freedom and certainly a much greater degree of liberty to local authorities. We are now in great danger of making the job of local authorities so unattractive that the calibre of the people who serve on them will gradually go down overall although there may be gifted individuals who for a variety of reasons go in. The more the general standard of local authorities declines in the country the more power central Government will seek to take into their own hands. I think this is a very bad development.
If I may turn to the three propositions, the first is the growth of non-elected bodies. Statistically I do not think that this is made out at all. It has been an unhappy growth in many ways, but an inevitable one in certain circumstances. It was one of the matters to which the noble and learned Lord, Lord Hailsham, pointed as giving Government the power, if they sought to use it, by using patronage to control government of the country more and more without any countervailing influences coming in.
Surely one should not have non-elected bodies unless the circumstances are such that one has to have them. Let us take the governors of the BBC. It seems fairly obvious that they should be non-elected.
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They should be selected so that they are representative of the country as a whole and capable of exercising independent judgment, whatever their political affiliations.
One regrettable fact of life in recent times is that even this august body is more and more suspect because it is thought that the Prime Minister cannot bear to put on it people who are not, in the famous words, "one of us". That is a very sad reflection.
Lord Jenkin of Roding: My Lords, as the noble Lord has listened to a number of speeches of my noble friend Lord Rippon of Hexham, he might have thought that my right honourable friend the Prime Minister in fact exercised a very broad patronage in this regard.
Lord Hooson: My Lords, I shall come to the reason why I express it in this way. The point I made is that in regard to certain bodies—the urban development corporations, for example, and the rural development corporation in my own part of the country, which is now described under some other name—when there was a specific problem, one needed to direct funds with no competition for those funds to achieve a given end. It is right to say, for instance, that when the Labour government originally set up the rural development corporation in my part of the country—it is, after all, a very liberal part of the country—it had an extremely balanced board. There was an ex-Member of another place, Mr. Emrys Roberts, a one time director of Calico printers and an experienced businessman and chairman. The noble Lord, Lord Jenkin of Roding, referred to the fact that he had a system—run by his civil servants apparently—of appointing people to non-elected bodies. I do not doubt that Ministers of all denominations or parties have shown in the past that they were capable of achieving a balance. I accept therefore that there are non-elected bodies that are essential to achieve certain given ends with modern government. Great care must be taken to make sure that there is a balance when they are appointed.
I come to the second proposition: the patronage system used by central Government for their selection. I move in a number of circles. I move obviously in a political circle; I move in a legal circle and I move in a farming circle. I am a non-executive director of a large business and I move in business. I move in a Welsh circle. In the last two or three years I know from general conversation that there has been a feeling that the Government and the Prime Minister in particular are overdoing it.
It is not that bodies have become politicised, because to a degree they always were, but they have become over-politicised. Every sensible person in this country knows that that is true. In the past two or three years in particular we have seen the over-politicisation of these bodies and it is creating a number of problems for the future of this country. We can reduce representation through patronage. After all, I am in the legal profession which is a prime example of where patronage is very important to certain levels of careers if certain ambitions are to be fulfilled, and so on. It can have a devastating effect on people. Their independence oozes out of

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them. Often their independent judgment oozes out of them, too, in the hope of attracting patronage by not being too critical. That can have a devastating general effect on the country. I believe that whereas the first proposition in the Motion is certainly not made out, the implication of the second proposition—that there is a certain injudicious and, indeed, misuse of patronage—is by and large made out.
I come to the third part of the Motion and the effect of such bodies on local government. It is obvious that if you use non-elected bodies to undermine the power of elected bodies you will undermine the morale and the influence of the elected bodies. However, much more than the use of non-elected bodies is the Government's centralising tendency that is undermining local government. I entirely agree with the noble Lord, Lord Rippon, in his analysis of what has been happening in the country. Oddly enough, it was open to any Prime Minister since the war, and before the war as far as I know, to develop the elective dictatorship. The noble and learned Lord, Lord Hailsham, was moved into print on this matter by the fear of a Left-wing government and an extremely clever Prime Minister gradually taking all the power controls, so to speak, into his or her own hands and exercising them so that the government was indistinguishable from a dictatorship, though an elective one which would have to be re-elected every four or five years.
The truth is that we are seeing this tendency writ large today and I am not surprised that a traditional Conservative like the noble Lord, Lord Rippon, expressed himself in the way that he did today. It is in the interests of our country that we have countervailing influences to this centralising trend that is now becoming totally unacceptable throughout the country.
4.52 p.m
Lord Ennals: My Lords, I am most grateful to all who have taken part in this debate. In one way it has perhaps been a more lively debate than we might have expected because the best part was the exchange between the noble Lords, Lord Rippon of Hexham and Lord Jenkin of Roding. If we had had only that three minute exchange it would have been a rich debate. However, that is not to undervalue the points made by my noble friend Lord McIntosh of Haringey, let alone my noble friends Lord Bottomley and Lord Dean of Beswick who have set out the case against what has happened in the past few years. I would not necessarily say that it has occurred throughout all this Government's 10 years, but it has done so to an increasing extent as the Government have seemed, as the noble Lord, Lord Hooson, said, to want to centralise power at a time when, in my view, it is so unhealthy.
We have seen that in a number of respects. I think that the undermining of local government is the most important one. This is not a party political issue because, in spite of the speech made by the noble Baroness, Lady Blatch, with an excellent brief, it is clear that the Government wish to undermine the powers and authority of local government. That is resented as much by Conservatives in local
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government as it is by Labour and the other parties. This is not a party political issue; it is a fact that simply cannot be denied.
I suppose the main reason why this House is still waiting for a response to the Griffiths Report on community care is because Sir Roy Griffiths, in the mind of the Prime Minister, made the great mistake of suggesting that more authority should be given to elected local authorities, who should be the lead authorities. Therefore, we have gone for more than a year without having an answer because the Government cannot decide how to go against the validity of the argument put forward by Sir Roy Griffiths and yet they do not feel that they can go along with that argument.
We have seen—it has been mentioned bya number of noble Lords—that the quality of people coming into local government has been affected. That is what disturbs me most. Much is now done and said to discourage young and able people from joining local government because, in a sense, they are being undermined. The same applies to the trade union movement. If you marginalise people, if you reduce the extent to which they are consulted and they are brought on to non-elected committees, you push people into a position of being either defensive or—by way of showing their feelings—aggressive. It does no good to our national life to undermine local democracy or the relationship that exists between the trade union movement and society in general.
The same applies for the professions. It would appear that from time to time the Prime Minister picks on a new group of people to be attacked and isolated. The professions include doctors and nurses in the health service, and I shall come to the health service in a moment. The latest victim is the Bar which is under attack from the Prime Minister. The effect is felt not only by the professions but within the universities that produce the members of the professions. It is divisive in our national life and it is very unhealthy.
In general terms, the assumption that all quangoes are wrong or unnecessary is incorrect. There are many good examples—the BBC was mentioned and the Countryside Commission is another—where clearly there is work to be done by people with commitment, dedication, knowledge and skill who do not necessarily need to be elected.
In most of the time at my disposal I want to refer to the National Health Service and the proposals made by the Government which, in my view, go a long way to reduce even that degree of responsibility which exists at present; and there is not much of that. The Government plan to remove any element of democracy in the National Health Service. In my experience of over 42 years, the National Health Service has gained enormously not just from the active participation of elected members of local authorities serving on health authorities but from the lay participation of a wide range of people, including many in this House, who have played a role on health authorities. My fear is that it will all go, and that all the emphasis and power will lie with managers and administrators often receiving inflated salaries and earning much more, it would seem, than many people now working in the health service.

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There is a degree of patronage right now, of course, but I do not intend to go into the details of that. What have the Government proposed? First, they have proposed opted-out hospitals—or self-governing hospitals, if the Government prefer that description—freed from the scrutiny of health authorities and of local authorities. Who will have the power in these new authorities? The chair will be appointed by the Secretary of State for Health and the rest of the board either appointed by the Secretary of State or by the region which is itself appointed by the Secretary of State. All power lies with the Secretary of State. Freedom to choose will be denied to patients. The administrators will direct patients to hospitals where the administrators, not the doctors, will have negotiated the cheapest possible contracts.
The second proposal is for practice budgets for GPs. That will deny doctors the clinical freedom that they have always had. But that will provide no way in which they are to be supervised by any elected authority, or themselves to elect representatives to any other authority.
The third proposal is to reorganise the family practitioner committees. They will be cut down to size. Who will appoint the chairman? The Secretary of State is appointed to appoint the chairman. In the case of the other 10 it will be the regional health authorities who, as I have said, are appointed by the Secretary of State. There is written into this proposal all power to go centrally to the Secretary of State. The fourth proposal is that the Secretary of State proposes to sack all the elected members of the health authorities. Apparently some will be replaced by non-elected businessmen. That proposal is justified on the ground that it will free local decision-making from being influenced by political prejudice or lobbied by special interest groups. I find that very disturbing.
In the field of the health service that I am discussing at the moment, it is vitally important that health authorities should be responsible to local community groups. Sometimes they may act as pressure groups. The idea that we should try to isolate those who have authority from the pressure of normal public opinion goes against any principle of democracy that I know. I believe that this centralisation and concentration of all power at the centre is patronage at its worst. It should be stopped before it goes any further.
I wish to raise another point that worries me very much. I am concerned about the whole system of decision-making at the present time. Perhaps I may put the NHS proposals in a wider perspective. The case I want to make principally against the Prime Minister but also those Ministers who act in the same way, is that the normal decision-making process seems to be in the course of change. As a Minister in four government departments for over 10 years I know that there has been a long and honoured tradition applied by both parties, until Mrs. Thatcher took over, that the Government should seek to rule by consent. To achieve that consent you need wide consultation with the
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professions and within the Civil Service. Obviously an independent Civil Service is available to provide guidance to Ministers. But I hear that increasingly Ministers take decisions without reference to their civil servants and that the civil servants are put in the position of complying and not being consulted. There is no sense of partnership that has always seemed to be so important as regards the relationship between Ministers and civil servants. Now there appears to be a great degree of alienation; namely, "Don't argue, do as your are told".
I believe that is very disturbing. Similarly, the NHS proposals were brought forward without any consultation whatever with the professionals, be they doctors, nurses or the professions supplementary to medicine. I find this a very disturbing situation. Ideas are served up by what I call rather crackpot institutions such as the Adam Smith Institute and the Centre for Policy Studies. Those ideas appear eventually either amended by Ministers or as they were presented. It means that there is no serious discussion by those people who have to carry out the proposals that have been put forward. The mood of those who work in the health service has not been improved by some of the insults that have been thrown by Ministers at the professionals who work in the National Health Service.
I feel that we are not only facing a challenge to local authorities and their independence and their ability to respond to the wishes of those who elect them at local level, but we are seeing the arrogance of power that is creating divisions within our society that I believe are very dangerous indeed. The conflict that is now being promoted between the Government and the professionals is a very dangerous one. It was quite right that reference should be made by two noble Lords to the writings of the noble and learned Lord, Lord Hailsham, who spoke of the elective dictatorship. I believe that the most telling point that was made by the noble Lord, Lord Rippon of Hexham, was when he said with great emphasis that it is a strange situation in which this picture, as seen by the noble and learned Lord, Lord Hailsham, should come about from the Right and not from the Left.
Increasingly and every day that goes by I am happy to think that the remaining time that this Government have in power will be limited. But I hope that they will not do so much damage to relations with sections of our society like local government, the trade unions, the professions and society in general, that it will be difficult to recreate any sense of unity within it.
5.5 p.m.
Lord Hesketh: My Lords, in responding to this Motion I, like many other noble Lords, was very grateful to the noble Lord, Lord McIntosh, for pointing out to a certain extent the irony of debating this particular Motion within your Lordships' House. I can assure the noble Lord that I am in the difficult position of benefiting neither from patronage nor from the battlefield. I suppose I fall somewhere in between.

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Perhaps I may make it clear that government policy since 1979 has been to control the growth of non-departmental public bodies. By non-departmental public bodies I mean bodies that have a role in the processes of national government but are not government departments. The key factors of such bodies are that Ministers appoint all or most of the members and have the power to establish the body and to wind it up. The Prime Minister restated government policy on 28th January 1988, saying that for some particular tasks, non-departmental public bodies can be the most appropriate and cost-effective solution but that the Government will continue to resist proposals for new bodies unless this can be clearly demonstrated within a strict framework of financial and management control.
There were 1,648 non-departmental public bodies in existence on 1st April 1988. This represented a net increase of five over the previous year, but a net reduction of 519 or 24 per cent. since 1979. Your Lordships will see therefore that this Motion is based on a misconception concerning the growth of such bodies. The fact is that there has been a major decrease in their number since 1979.
I believe I am right in saying that both the noble Lord, Lord McIntosh, and my noble friend Lord Rippon of Hexham, suggested that the bodies that we have set up are much weightier than the ones that we have abolished. My noble friend Lord Rippon pointed out his bird fanciers in St. James's Park.
Lord Rippon of Hexham: No, my Lords, bird watchers!
Lord Hesketh: My Lords, I do apologise. One can easily swap examples. In addition to the number of significant individual bodies, I can point to major reductions in the number of new town development corporations and as a result of the transfer of responsibility for industrial training bodies, to the industries which have the main interest in their activities. Moreover, a major result of the government's privatisation programme has been that some of the country's largest industries and corporations have returned to the private sector.
I scarcely need to stress in this place that Parliament is the supreme institution in our affairs. The elected national government brings proposals for new bodies or adjustments of functions between central and local government and elected and appointed bodies to Parliament on the basis of their manifesto. Much as we respect and value local government we cannot accept the doctrine that local government has an alternative mandate to central government. I should perhaps remind your Lordships that local government in Britain spends 25 per cent. of public expenditure, 10 per cent. of gross national product and has over 2.5 million employees; a number, interestingly, that is scarcely different from the figure that existed in 1979. So that those who suggest that local government is about to expire or has been appallingly savaged by our policies, are rather wide of the mark.
As noble Lords will know, the Government believe it is essential that we have an efficient and accountable system of local government in this country.
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That is not to say however that local government is always the appropriate organisation for carrying out statutory functions; indeed for many it would be the wrong option. What one has to do is to look at each situation on its merits and entrust the function to the body best suited for the purpose. The point is demonstrated if one looks at a selection of the bodies created by Parliament within the past few years.
Seven residuary bodies were appointed on the demise of the GLC and the metropolitan county councils. Abolition of those authorities meant a range of decisions needed to be taken quickly, on debt management, superannuation, legal liabilities and the disposal of surplus property. It would be naive to suggest that in London, for example, the 33 London boroughs would have been able to reach unanimous agreement on these issues. What was clearly required was a single administrative body which could take an independent view on the action necessary to wind up the affairs of the abolished authorities. This is what the Government did. Similar bodies were set up in the metropolitan areas and they have worked well.
In the metropolitan areas other than London, the districts were sometimes able to agree on a lead district to take responsibility on their behalf for functions like debt or superannuation. This is a tribute to the working relationship between residuary bodies and districts and their mutual wish to do a good job.
The success of the Government's strategy in establishing the residuary bodies speaks for itself. More than £420 million of capital receipts from the sale of surplus property will have been distributed to successor authorities by the end of this financial year, with more to come. It has been an enormous task to identify and shake out the thousands of surplus properties which had been mothballed for many years by authorities which sometimes did not even know what they owned. We also estimate that more than £280 million in reserve balances will also have been distributed. This could not have been accomplished but for the very nature of the residuary body transitional organisations. These were set up with a single objective; efficiently to wind up the affairs of the abolished authorities and then wind themselves up within the shortest possible period, leaving the London boroughs and metropolitan districts with the benefits.
One residuary body—Tyne and Wear—wound up last Autumn, and South Yorkshire should go in the next few months. All are on timetable for completion of the purposes for which they were established, and, in the main, with the full co-operation of the local authorities in their areas.
I should like to turn to the Audit Commission, as I think it is a good example of the successes so-called "non-elected bodies" can achieve. Even the noble Lord, Lord McIntosh, had a few kind words to say about the Audit Commission. The Audit Commission was established in 1982, really for three reasons. First, we wanted to create an independent body responsible for local government audit with powers and duties laid on it by Parliament. Secondly, we wished to end the practice whereby local authorities could appoint their own auditors so that

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there could be no question of the auditor's independence. Thirdly, the Government saw a need to strengthen and widen the audit function, particularly so as to bring in a proper concern for value for money.
The Audit Commission has, in our view, been a resounding success. It has achieved an improvement in the standards of local government audit through greater involvement of the private sector, through clear guidance and good management of the audit function, and through effective quality control. At the same time the district audit service has been invigorated both by competition from outside and by the commission's management training and monitoring of standards.
It is probably in the area of securing value for money, however, that the commission has made its most distinctive impact on local government. The commission's auditors had, by the end of March 1988, identified potential value improvements at individual local authorities worth some £750 million per year of which £220 million per annum has been fulfilled. These resources would have been sufficient to fund, say, up to 30,000 additional sheltered housing places in a financial year. The Audit Commission is, I accept, a non-elected body. It shows, however, just what can be achieved by such expertise.
Perhaps I may also say a few words about urban development corporations, which were drawn to our attention by several noble Lords, in particular by my noble friend Lord Bellwin and the noble Baroness, Lady Blatch. They are single-minded organisations with a statutory duty to secure the regeneration of their run-down inner city areas. They combine statutory powers and public funding with the private sector experience of their boards and are therefore effective agencies for urban renewal.
It may be said that functions should have been given to local authorities instead. However, local authorities have wide remits and are not designed specifically to tackle urban regeneration, as my noble friend Lord Bellwin pointed out. Other priorities may take precedence over urban renewal. An urban development corporation on the other hand is able to concentrate exclusively from the very start on the task of regeneration in a way that a local authority could not. We see the work of urban development corporations as complementing the work of local authorities. The corporations are encouraged to co-operate with local authorities, and I am pleased to say that relations with local authorities are generally good. Notable improvements have been achieved in co-operation with previously unhelpful authorities. For example, in the London Docklands, housing scheme arrangements have been agreed with local boroughs, including the refurbishment and provision of new sites.
I entirely agree with the remarks of my noble friend Lord Jenkin about the improvement in the relationship of Liverpool city council and its agreement to consultations with the Merseyside board to fill a longstanding council vacancy on the board.
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Urban development corporations are accountable through Ministers to Parliament. They are subject to rigorous monitoring and audit procedures. Each urban development corporation has to submit an annual report to Parliament. Under the terms of the legislation setting them up, they are required to draw up codes of consultation with local authorities on general strategy and specific planning applications. In summary it seems to me that they co-exist well with local authorities.
Your Lordships may have had in mind non-elected bodies in the health service. This matter was brought to our attention by the noble Lord, Lord Ennals, and by my noble friend Lord Rippon of Hexham. As I explained during the debate in this House on 22nd February, delegation of authority is a central theme of the White Paper Working for Patients. Ministers can indicate the overall direction of policy in the NHS, but they cannot and should not seek to define in detail how the implementation of these policies is managed locally. It is in accordance with this principle that the Government are proposing to slim down the membership of health authorities, and ensure that the actual managers and people from the local community are members. Community health councils will be retained as a channel for local consumer views, and health authority meetings will be open to the public as now.
The creation of NHS hospital trusts and the self-governing hospitals which they will manage is another important step in decentralising responsibility. Responsibility for hospital management and its decentralisation is a key feature. The trusts will stand close to their local communities. They will have community membership, issue annual reports and hold annual meetings to report on their progress. They will be in a position to tap local pride and identification with the hospital. Their managers will also have greater freedom to respond to the needs of patients in a more appropriate way.
Lord Rippon of Hexham: My Lords, the Minister is emphasising the importance of local opinion. Why then are the Government turning off the directly elected representatives of the people?
Lord Hesketh: My Lords, I shall come to that point a little later if my noble friend will agree to that.
We believe that the changes will provide the opportunity for enterprise, initiative and enthusiasm in the health service and are the opposite of a government seeking to establish more centralised power for themselves. As I said to the noble Lord, Lord Ennals, on the occasion of the Statement on the White Paper—I have no hesitation in saying it again in answer to my noble friend Lord Rippon—one has to look at the whole of the pie and not just at part of it. The whole pie which we propose is a massive operation in decentralisation and doing and trying to achieve exactly what my noble friend Lord Rippon suggested that we should be doing.
It was perhaps inevitable that the water industry should be raised in this debate. When the water authorities were first created under the 1973 Water Act, they were fairly large bodies, with most of their

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members appointed by local authorities. I shall not go into too much detail today because as the noble Lord, Lord McIntosh, will be aware, we shall have a great deal of opportunity in the coming months to go thoroughly over this ground.
The local authority appointments to the water authorities ceased under the Water Act 1983, as pointed out by my noble friend Lord Rippon. That Act reduced board memberships in the interest of greater efficiency. The water authorities were to operate less like local authorities and more like the boards of private sector companies and other nationalised industries.
Even since 1983 the climate has changed. It is now widely accepted that basic services such as gas and telecommunications are best provided by the private sector; with the public sector doing what it does best—regulating in the public interest. The Government will no longer make appointments to the boardrooms of this industry.
However, privatisation also requires an independent watchdog with teeth. Here we have an example of a new quango on the way, but one for which we have no sense of guilt whatever. It will ensure that we have clearer rivers and bathing waters. And it needs an economic regulator to ensure that price rises are limited to fair levels. These economic and environmental watchdogs need to be organised on a national basis, to carry out proper comparisons of the performance of up to 39 companies. Those regulators will therefore be appointed by the Government and will be the people best qualified to do the job. They will be supported by a regional network of advisory committees which will ensure that there is every opportunity for general public and local government input. Those are sound arrangements for the organisation of an industry in which the public needs to have confidence. But we will have plenty of opportunity to reassure ourselves of that fact over the coming months.
Lord Ennals: My Lords, I am most grateful to the Minister for giving way. Does it concern or trouble him that present showings in opinion polls indicate that roughly 12 per cent. of the population support privatisation of water and roughly 15 per cent. seem to support the Government's proposals as regards the health service?
Lord Hesketh: My Lords, I am most interested in the point just made by the noble Lord, Lord Ennals. Indeed, I quite understand what he is saying. I find when I go around the country to address meetings that when I arrive people are uncertain about the issue of water. Interestingly, by the time I leave, they are not only much more certain, but they are also much happier after they have heard what I have said. I am not indicating to the noble Lord, Lord Ennals, that what I said will in any way be a national earth shattering change; but I do say to him is that when the issues are clearly understood, a very different understanding is attached to them than that which he perceives in the polls which he mentioned.
Lord Rippon of Hexham: My Lords, perhaps the Minister will give way once again. I should like to
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ask him who is to choose the best people? Further, why are the Government the only people to choose the best people? Can local people not choose them for themselves?
Lord Hesketh: My Lords, the difficulty about answering that question is that it is very much horses for courses because I am not quite sure to which groups or bodies the noble Lord, Lord Rippon, is referring——
Lord Ennals: Any!
Lord Hesketh: As the noble Lord, Lord Ennals, is aware, there will in fact be an element of self-appointment with the hospital trusts, if and when they come to be set up.
The noble Lord, Lord McIntosh, also addressed the position, as he felt it to be, of government interfering—if that was the word—in housing policy. In view of what he said, I think it is right to comment on the housing action trusts which I perceive he would view as part of that example. We believe that what we are setting up will improve the homes and the lives of tenants in their areas. The changes are necessary as there are some particularly difficult council estates which present problems that are beyond the local authority's capacity to deal with. Housing action trusts will be single-minded bodies which will be able to concentrate all their efforts on tackling such problems.
I should perhaps remind the noble Lord, Lord McIntosh, that I was on these Benches only last year when he proposed an amendment, which subsequently became another amendment. That amendment ensures, by reason of election, that no housing action trust will take place without that happening.
I shall now try to answer some of the points which were raised specifically during the debate this afternoon. The noble Lord, Lord Rippon, drew the attention of the House to the position of efficiency combined with Mussolini. We agree that efficiency is not the greatest or the only social good. But when resources are limited—and they always are—a pound saved by cutting out inefficiency is a pound which could be given to a deserving and needy person.
The noble Lord, Lord Graham, although he is not present in the Chamber, raised the point about the situation which exists in——
Lord Ennals: My Lords, the noble Lord has apologised for his absence.
Lord Hesketh: My Lords, I know that he cannot be here; but I was intending to answer his point in any event because it has a broader implication. His point concerned what he referred to as the "plc-ing" of Enfield Council. I think it is fair to say that that council is an elected authority. It sees its job as being an attempt to be enablers. Of course members of the council will have to go before their electorate again. However, I do not think that that is the case with a plc. The members were elected, they will have a different view and they will have to present

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themselves again for re-election. Further, if they are successful—which I hope they are—they will be re-elected.
The noble Lord, Lord Jenkin, opposed by the noble Lord, Lord Dean of Beswick, mentioned the issue of political affiliations and the public appointments unit. I entirely endorse what my noble friend said on the matter; namely, that there is no mention of political affiliation. The noble Lord, Lord Dean of Beswick, said that we could see people's political affiliations elsewhere. That of course is true; but the principle which exists within the Cabinet Office is that there is no question of anything other than ability and recommendation being part of that list.
The noble Lord, Lord Bottomley, drew to our attention the fact that public bodies are not accountable and operate "behind closed doors"—I believe that they were the words he used. It is possible that the noble Lord ignores the fact that public bodies have to publish annual reports, that they are open to parliamentary scrutiny and that Government Ministers are accountable to Parliament just as they are accountable for appointments.
The noble Lord, Lord Dean of Beswick, kindly said that he would only raise a couple of specific points concerning G-Mex for which he is hoping to have a fuller and longer debate on another occasion.
Lord Dean of Beswick: My Lords, it was not G-Mex; it was the residuary body and the way it is behaving. I should like to know whether the body is exceeding the duties which it was supposed to be carrying out. If that is so, I should like to know what the Government propose to do about it? Further, what will happen concerning its future?
Lord Hesketh: My Lords, I referred to G-Mex because in all previous discussions with the noble Lord, Lord Dean, we have described it as such, before going into the finer points. We believe that the residuary body has been remarkably successful. Indeed, the Government support its efforts in getting on to finish the job. As regards the questions posed by the noble Lord, Lord Dean of Beswick, concerning what will happen from hereon, I can assure him on that specific point that the residuary body will be wound-up later this year and it will hand over the public sector interests in the Manchester Central Station companies to the 10 districts. Further, the residuary body will have no role and it will be entirely for the districts to decide who sits on the board and who holds executive office. I hope that that answer satisfies the noble Lord.
The noble Lord, Lord Rippon, asked me for a definition of the word "vicious". My answer is that it is rather like looking down a telescope from different ends: the view can be different. The last point raised by noble Lords from both sides of the House concerned the quality of future candidates standing for local government. I can only answer that in one limited way—that is, from my own personal experience. My mother is standing for election to the county council for the first time in her career in the forthcoming May elections.
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In closing, I can only reiterate that we believe we have made a contribution towards reducing the number of quangos in the country. Further, we believe that there is a misconception that the setting up of bodies is in some sense undemocratic. The Government's actions give effect to the wishes of the people who elected them with a majority. Moreover, the Government continue to be answerable to Parliament, and to the electorate, for what they do. That includes justifying the decision to set up new bodies and the appointments made to them.
Lord Molloy: My Lords, before the Minister sits down perhaps he will deal with the point about democratic decentralisation made by the noble Lord, Lord Rippon, which he said that he would answer. Will he give one instance of where the Government have decentralised to a democratic body any power that was previously under the control of local authorities?
Lord Hesketh: My Lords, at this late point my best answer is to refer the noble Lord to what I said in my Statement on the health service White Paper which clearly covers the point that he raised.
5.30 p.m.
Lord McIntosh of Haringey: My Lords, my formal task is to thank all noble Lords including even the noble Baroness, Lady Blatch, who have taken part in the debate. I do that with complete sincerity. The debate has given me a great deal of pleasure. I gained especial pleasure from the contributions from three former Secretaries of State. My noble friend Lord Ennals made the point about the health service, which was not only unanswerable but unanswered, that all locally elected participation in it has been withdrawn. Despite prompting from his noble friend Lord Rippon, the Minister made no attempt to answer that point. It remains on the record as an accusation which cannot be denied and which the Government made no attempt to deny.
I also much enjoyed the intervention of two former Secretaries of State for the Environment. The one, the noble Lord, Lord Rippon, shooting down in flames the second, the noble Lord. Lord Jenkin of Roding, who appeared to think that because a set of procedures was laid down in letters from Secretaries to the Cabinet, that somehow meant that there was no political intervention in public sector appointments. If he will believe that, he will believe anything.
A most extraordinary argument was advanced by a number of noble Lords: that somehow the privatisation programme was reducing the influence of central government and increasing local democracy, which is what the Motion was about. Of course, the privatisation programme in itself in no way gives any greater power to locally elected representatives, the people, the consumers or anyone other than the shareholders of the new public limited companies. The fact that watchdog bodies have to be set up to supervise those new public limited companies is evidence of that fact.

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The point we came down to in the debate was that traditionally in this country—the House knows this above all—there has been an establishment which has sought to fight against radical change by fair means or foul. Labour governments have had to fight that establishment. They have not always succeeded as well as they should have done. They have had to fight bitter opposition from those entrenched in the professions, big business and all other elements of the establishment.
This Conservative Government, faced with an establishment which was in some ways hostile to some of their more radical objectives, have found that the establishment has rolled over to allow its tummy to be tickled. It has found that the Prime Minister has administered a few sharp jabs to the solar plexus. It is an interesting matter for us to observe. It has given us no confidence that the Government have any genuine concern for local democracy; for the plurality of power in our society; or any genuine evidence that the accusations that were made in the Motion, supported by my noble friends, have been answered adequately. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Social Policies
5.34 p.m.
Baroness Turner of Camden Baroness Turner of Camden rose to call attention to the effects of Her Majesty's Government's social policies, particularly among young people, the poorly paid and the elderly; and to move for Papers.
The noble Baroness said: My Lords, there is no area of policy where the philosophical division between this side of the House and the Government is more pronounced than in the field of social policy. I therefore believe that the debate is likely to be controversial. I make no apology for that, because I believe that it is an important subject. The Government have made their policies clear. Their philosophy of deregulation and of the so-called enterprise culture pervades almost all the legislation that comes before your Lordships' House. It is a massive departure from the policies of previous governments, since the war.
A series of so-called social security reforms has substantially modified the whole system of social insurance that the Government inherited in 1979. The contributory social insurance scheme designed by Beveridge was intended to provide protection for all employees against the principal insecurities of working life: unemployment, sickness and accident, and to provide for retirement.
In the 1960s and 1970s there were further improvements in the social insurance system through the introduction of earnings-related contributions and benefits so that earnings-related supplements became payable for a short time during unemployment and sickness.
The mid-1970s also saw the introduction of the state earnings related pension scheme (SERPS) with all-party support at that time. In the 1980s, those earnings related benefits have been abolished. The
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Government at first intended to abolish SERPS. Opposition to that proposal prevented it from happening, although SERPS has been undermined to a great extent in the hope of encouraging private personal pension schemes.
In addition, we are witnessing a considerable tightening up of conditions for claiming unemployment benefit. If adopted, the new Social Security Bill will mean that claimants will have to demonstrate that they are actively seeking work rather than merely being available for work. The Government have a clear intention that unemployed people should be compelled to take whatever jobs are on offer, despite inadequacy or poor pay.
The result of those moves has been that more people have been forced onto means-tested benefits. The Government's view is that it is better to target resources. We have heard that argument many times in the House; but social insurance has great advantages over means-testing. It is cheaper to administer. It preserves claimants' sense of independence. A wide contribution base has the advantage of spreading the risks across the working population. National insurance sought to achieve that aim by bringing all workers within a single comprehensive system. Beveridge also envisaged that there should be a tripartite system of contribution with the national exchequer contributing part of the cost. Since 1981 however, the Treasury contribution has been progressively diminished and in the new Social Security Bill it is proposed that it should be withdrawn altogether.
It is clear that since 1981 the Government have been gradually running down the social insurance scheme with a view to pushing people into means-tested benefits. As already indicated however, such benefits are expensive to administer and take up, especially among the elderly, tends to be low.
When we look at the effect of social policies on the elderly, we see that two-thirds of pensioner householders still rely on state pensions and means-tested benefits for the greater part of their income. Until 1980, pensions were uprated in line with the higher of the retail prices index or earnings. In 1980 that earnings link was broken with devastating consequences for pensioner incomes. As earnings have steadily risen, pensioners have fallen further behind.
The state pension from April 1989 would be £53.30 for a single person and £82.25 for a married couple had that link been sustained. The actual figures are £43.60 and £69.80, which represent only four-fifths of those amounts. Of course it will be said that the recent Budget contained some benefits for the elderly. We must all be glad that the earnings rule, so much detested, is to go, but tax concessions on the purchases of private health insurance for the elderly is unlikely to benefit poor pensioners or their families. Without an adequate state pension, the majority, who have little or no independent income, must have recourse to social security benefits. Those benefits have themselves been subject to a number of changes that have affected the income of the elderly. For example, last April supplementary benefit was replaced by income support, as a result of the passage of the Social Security Act 1986. Under

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supplementary benefit people could in some circumstances claim special additions for heating, laundry and dietary needs. These were not carried over into income support, with the result that for many claimants the amount they received was less than they would have had under supplementary benefit Transitional protection was made available for some 1.4 million people, but they received no increase to compensate for increases in the cost of living.
An estimated 200,000 pensioners receiving transitional payments will receive no increase in income when benefits are uprated and a further 300,000 will not receive the full increase. I am indebted for this information to Age Concern, an organisation that does a great deal in this area. It tells me that it has received many inquiries from confused and angry pensioners. I very much hope that something will be done about this unacceptable situation.
Then there is the matter of community care. Demographic changes, of which we are all much aware, indicate that a major effort needs to be made to ensure that care is available for the elderly and infirm. Age Concern has told me that it is deeply worried about the cost of caring for elderly people in private residential homes. Estimates for 1988–89 suggest that the cost will be in the order of £1 billion, representing a 40-fold increase since 1980. Income support levels are often inadequate to meet the cost of care and what, asks Age Concern, is happening about the Griffiths Report?—a point also raised in the preceding debate.
We must not forget the role of government policies for housing, heating, transport, consumer and leisure services in ensuring that the needs of elderly people are met. Access to these would be improved if all elderly people had sufficient income to exercise choice in their expenditure and to participate fully in the life of the community. Sadly, this is far from being the case.
When we come to the poorly paid, also mentioned in my Motion, it has to be understood that the problem here is a very large one. By no means everyone is benefiting from the alleged economic revival. We all rejoice in reduced unemployment. High rates of unemployment add to the pressure on individuals and their unions. There is a very strong argument that the existence of large-scale unemployment has been responsible for what the Government term improved industrial relations—in other words, people are prepared to put up with conditions they would not put up with otherwise—rather than successive tranches of employment legislation. Much of the new employment, on the Government's own figures, is part-time since such jobs are counted as full-time in official statistics. Changes in the social security claiming rules have repeatedly affected the statistics, as we have often said in this House, making it difficult to draw meaningful comparisons between now and 1979 when unemployment—however it is looked at—was very much less.
It is estimated that around 5 million people in the UK are dependent to some extent on state benefits. Supplementary benefit was itself a not very adequate
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means of providing support. The indications are that income support is even less. As far as the social fund is concerned, the criticism that it would turn out to be unfair and unreasonable appears to have been correct. Social fund payments, predominantly in the form of loans rather than grants, have forced people to choose between getting into debt with DSS loans (at repayment levels of around 15 per cent. deducted from the claimant's benefits) or going to loan sharks with very high interest rates or else doing without essentials. The voluntary organisations with which I am in touch predict that loan repayment problems emerging this summer with claimants unable to subsist on the residue of benefits will be very substantial.
Some benefits such as family credits have been increased as a matter of policy. It seems to be the Government's view that this subsidises low paying employers. However, child benefit which would be of particular assistance to low paid families, has been frozen at the old level and has actually risen by less than prices since 1978–79.
It is here that we have heard and will probably hear again a great deal about targeting of benefit, but a relevant amendment was successfully moved by the noble Lord, Lord Banks, in this House. Incidentally, perhaps I may say how sorry we are on these Benches to learn that the noble Lord is seriously ill, otherwise I am sure that he would have been here today. We very much miss the considerable expertise that he brings to bear on these subjects. The noble Lord, Lord Banks, was successful in moving an amendment in your Lordships' House last year when the Social Security Bill was before the House. That was moved quite specifically on the basis that whatever the wording said—and it referred to "reviewing"—it nevertheless meant that the benefit should be annually uprated. But uprating has not yet occurred and it is scandalous that it has not done so. This is at a time when we are told that there is an economic revival.
I need hardly go over in detail the arguments we have repeatedly advanced on this side of the House—although I am sure that a number of my noble friends will do so—that child benefit replaced tax allowances then available to everybody; that the absence of means testing ensures a high take-up; and that in many poor families it is the only income upon which a mother can rely. I shall simply say that I think that the Government have a moral obligation to uprate this benefit and should do so.
We have discussed previously in your Lordships' House the proposals contained in the Government's consultative paper on wages councils. The intention is to abolish the wages councils. The Government seem intent upon abolishing whatever minimal protection against exploitation exists. However, membership of the EC may well result in our having to make some minimum wage provision. This may be introduced across the Community to prevent what is known as "social dumping"—the movement of jobs towards regions and countries of low pay and poor employment protection.
As I said earlier, the Government seem to believe that family credit will make up for poor pay. But

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why should employers who cannot or will not pay a decent wage be subsidised in this way? Whether this is desirable even within the Government's own objectives is debatable. It can be argued that dependence upon cheap labour provides a way in which inefficient producers and obsolete technologies can survive and compete. It is in any event surely better that workers should be enabled to earn a living wage rather than have inadequate wages subsidised by social benefit.
Finally, there is a growing and justifiable concern about the fate of young people from deprived backgrounds, particularly the 16 to 18 year-olds. Many families on low wages or suffering from the effects of unemployment simply cannot afford to keep these young people at home, or else there is a break-up of family life itself. The Government's policy is clearly to try to ensure that such young people are kept at home with their families and either get a job or a YTS place. However, YTS places are not as available in some parts of the country as we had been led to imagine. I am informed, for example, that in November in Manchester 13,000 young people wanted YTS places which were not available.
Young people who leave home find themselves in a cruel dilemma. If they are homeless, they cannot get a job. Without a job, they remain homeless. It is estimated that some 50,000 young people are homeless in London but nobody knows the real figure. The Government's policy of deregulating the rented housing sector is likely to make the situation worse rather than better. It is true that the Government have recently promised some amelioration. Clearly something urgently needs to be done and I look forward to hearing from the Minister when he replies precisely what the Government have in mind in this area.
As in the case of other vulnerable groups, young people from deprived backgrounds have not benefited from government policies. The so-called "trickle down" effect has simply not happened. If somebody was well off to start with, he has remained well off or become richer. If he was poor he has remained poor or has become poorer.
Of course, one hesitates to call the Government's social policies a failure. It depends what the objective was in the first place. If the creation of an enterprise culture means creating a society where the ruthless and unscrupulous derive the greatest benefit then clearly the Government's policies have been successful. If the intention is to create an entrepreneurial paradise of a flexible labour market with a supply of cheap labour, with weakened unions and no employment protection and with social benefits so poor or so humiliating for people to claim that they will work for very little rather than be reliant upon them, then the Government's policy is being very successful. But that is not the kind of image that wins elections. We are supposed to be a caring and civilised society, so policy must not be presented in such stark terms. We on the Opposition Benches have a duty to expose the policy, and the results of it for what it is. My Lords, I beg to move for Papers.
5.50 p.m.
Lord Trafford: My Lords, I am grateful, as I am sure are other Members of your Lordships' House, to the noble Baroness for introducing this debate. She started by saying that her remarks would probably be controversial. Her speech lived up to that promise in the sense that she made many severe criticisms of the social policy of the Government. However, she was not as radical as I would have been, had I ever been in a position to do anything about this matter. I shall not pursue that line at the present time simply because I have mentioned it before and each time the Minister who was due to reply squashed it quite properly. My proposals were always regarded as far too expensive a solution and far too widely tax-based.
In dealing with social policy—I take this as a general debate—all governments face a number of problems. The first is that we have the contributory flat-rate benefit system introduced by Beveridge in the 1940s. Therefore we are stuck with a system in which most benefits and pensions are issued as of grace and not of right. By that I mean that, unlike a directly actuarial system which could probably have been introduced at that time, the up-rating of benefits and pensions and the introduction of new pensions have all been dependent to the greatest extent on the generosity of the current taxpayer, if one can put it that way. That will present very significant problems in the future. Most of us are already aware of those problems.
The second problem was that the system needed modification. All the modifications led to considerable complications. The first of those, incidentally, was that the system itself became changed. It was never possible thereafter for it to be actuarial. Someone made a calculation, which I think was repeated in The Economist, that if one considers the number of variations and changes in benefits prior to the 1986 Act, one sees there have been 476 different variations. That is quite something to find one's way through.
Similar difficulties arise as regards income, whether it be low income, high income or any other rate of income. As everybody knows, any wage dispute or argument about incomes hinges on whether one is referring to gross income, net income, net disposable income or net income with deductions, and what the deductions entail. I point out to the noble Baroness that the minimum wage to which she referred is theoretically somewhat attractive. The theory that no one should fall below a certain level of payment for work done is attractive. However, the problem is that minimum wages lead to loss of jobs. That is one of the great difficulties which those who advocate such solutions find when they try to introduce such policies.
In a mixed economy it is inevitable that there will be different levels of earnings and these will extend through quite a wide range. It is useful to use the term "low pay" only in one sense; that is, that one identifies a particular section of the population who, although working, must be protected from any particular penalty as a result of fiscal or benefit change. The problem with the definition of poverty

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is a matter of statistics. The Low Pay Unit is often mentioned. That unit uses a methodological system which results in a greater number of poor people whenever benefits are up-rated. That is not very helpful from the point of view of producing solutions to the problem. In my view the poverty trap and the high marginal rate of tax at which people enter the system is far more significant. That is why I welcome very much the changes introduced in the recent Budget. They proceed in the right direction in this regard.
National insurance contributions which bring in something in the order of 70 to 75 per cent. of the level of income that income tax brings in, have been changed. That means that for the first time since the introduction of the contributory welfare system in the 1940s, we have the lowest cost of entry to the contributory system; it is approximately 86p. That is the lowest figure in over 40 years. That factor and the further reduction in the standard rate, which one hopes will follow, is probably of greater help to the lower paid than almost anything else. However, I accept the argument that the raising of thresholds as well as the lowering of rates will also be of some benefit. I do not say that this is a total answer, but I think it is of some use.
We must target our remarks in this debate as we cannot cover the whole field in the time allotted. Therefore I shall refer quickly to the elderly. I think the noble Baroness was a little unfair to the Government. In fact the levels of return to pensioners are something in the order of 7 to 10 per cent. higher now than they were at the beginning of the decade relative to average earnings. The return in real terms has gone up by approximately 3 per cent. per annum compared with 3 per cent. during the whole period that the party of the noble Baroness was in government.
Pensions represent the largest section of costs in the social budget. Clearly, with the rising numbers of elderly, the situation will become very serious within 10 to 20 years. I suggest there are three possible alternative approaches to solving this problem. There is the present approach, which includes the fiscal reliefs and the changes made in personal pension policies. Approximately 1 million personal pensions have been taken out since 1988. Then there is the pluralistic method used in the United States. I deplore that method because it leaves so many people out. Also there is the insurance system with an actuarial element. That system is very attractive to our Continental neighbours. That system would take 20 to 30 years to introduce, but I encourage the Government strongly to move towards that system, as I fear that unless the burden on taxpayers is dealt with during that period of time, the cost of social benefits will hit the buffers of taxpayers' resistance.
Although I said I would prefer another system, what I would like to see is a Tory Government who, having already tackled major industrial and economic problems, are now looking at the professions, making as their top priority for the next period of government the determination to concentrate on the problems we are discussing
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tonight. I should like to see them putting in place long-term viable plans for their greater alleviation, if not their ultimate solution.
5.57 p.m
Lord Rochester: My Lords, I shall start by thanking the noble Baroness, Lady Turner of Camden, for the sympathetic remarks she made about my noble friend Lord Banks. He is indeed an expert in the matters we are discussing and would have undertaken very much better than I the task I shall now endeavour to perform.
The Motion before us is welcome both for its intrinsic importance and because it has provided the House with its first opportunity to comment on the impact that last week's Budget will have on the Government's social policies. Clearly in the time available to me it is not possible to deal with all three of the effects of the policies to which the Motion refers. Therefore, I shall concentrate almost entirely on the poorly paid.
I, too, welcome the Chancellor's proposals to abolish the earnings rule for pensioners and to extend the scope of the age allowance to include those aged over 75. However, we should bear in mind that the first of those concessions will be of no help at all to the two-thirds of pensioners who are too poor to pay tax. Moreover, I am most unhappy about the proposal that taxpayers generally should subsidise private medical care for people over retirement age to the tune of £40 million in 1990 to 1991. That is money which will benefit people who already have the means to look after themselves in this special way. That money should be spent instead on improving the National Health Service.
I welcome also, so far as they go, the proposed changes in national insurance contributions. However, although people on average earnings stand to benefit from these proposals by about £3 per week, most of the low paid will gain very much less. Moreover, the reduction in the real value of personal allowances, which are to be raised by only the minimum of 6.8 per cent. required by law, will have the effect of compelling even more low paid people to pay tax.
It is also regrettable, as the noble Baroness mentioned, that child benefit is once more to be frozen at £7.25 a week. That benefit of course replaced child tax allowance. Since: 1983 it has decreased in real terms by 13 per cent., whereas over the same period other tax allowances have increased by 22 per cent. Given the disappointing take-up of family credit, I wish the Chancellor had taken the opportunity of the Budget to say that he proposed next autumn to restore the real value of child benefit.
However, I would most welcome a statement that, in the light of responses the Government have received to their consultative document, they have decided to abandon their plans to do away with wages councils. It is discouraging that in that document comments were invited not on an open question as to whether wages councils should be retained, reformed or done away with., but on:
"the Government's view that the time has come for the councils to be abolished".

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Despite that lead, and the brief consultation period of only two months (including Christmas and the New Year), I understand that the great majority of respondents—more than half of them employers'organisations—opposed complete abolition of the system. They included the British Institute of Management and the Institute of Personnel Management. The CBI said that some of its members believed that wages councils could fulfil a useful role in the sectors in which they operate.
It does not follow that such organisations are satisfied with the present system. A number of them accept that there are anomalies and anachronisms within it. However, they regard that not as a justification for ending the system but as a reason for rationalising it to make it more effective. Abolition of wages councils would leave this country as the only member of the European Community without any legally enforceable minimum wage protection for the low paid. Already the number of inspectors employed to oversee payments has been reduced by more than 50 per cent. since 1979. Despite that, figures recently released by the Wages Inspectorate showed that last year there was an increase of more than 25 per cent. in illegal payments.
The White Paper Employment for the 1990s states:
"In the Government's view there are real questions about whether the councils have been giving sufficient weight to the impact of settlements on jobs".
That was the point made by the noble Lord, Lord Trafford. No evidence was given in the document to support that contention. There is, however, plenty of evidence of an overall increase in the United Kingdom, particularly in the service sector.
In its submission the IPM said:
"Whatever reasons the Government may have for abolishing wages councils the alleged deficiencies of national bargaining do not stand much scrutiny. We are certainly not convinced by the conventional wisdom that national pay bargaining leads to higher wage rates being set than is the case under regional or local arrangements. Indeed, all the evidence shows that where employers have decentralised pay bargaining it is more from a desire to pay more in tight labour markets than from any intention to pay less in other areas".
In relation to the argument that low pay can be supplemented through social security, the IPM expressed the view that government assistance to employees on low wages amounts to a hidden subsidy for inefficient employers. The BIM made it plain in its response to the consultative document that it does not favour this new dependency culture. If the Government insist on enforcing their view that wages councils should be abolished, at least let them take the step only following a sector by sector review which takes account of the views of the parties concerned.
I look forward to hearing what the noble Lord, Lord Skelmersdale, has to say about the future of wages councils, and indeed about other matters raised by noble Lords in this very timely debate.
6.4 p.m.
The Lord Bishop of Southwark: My Lords, it is all too easy to have a debate in which the charge that some people are worse off is countered by the charge that other people are better off, and therefore, it is argued, the system must be delivering the goods. The
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truth is that the social security changes of a year ago have made some people better off, both relatively and in real terms, but others have suffered a relative and real deterioration, notably in the categories mentioned by the noble Baroness in her Motion and opening speech. Further, as we have heard, those changes are not simply the result of miscalculation, although they have been in some cases, but rather the consequence of a deliberate choice of priorities. That choice of priorities is bound to lead to a still further widening of the gap between the majority of the relatively well off in our society and a minority who are becoming poorer.
When the prosperity of the country is as great as it is, one has to ask whether such a harsh and growing discrepancy is not morally unacceptable, socially unwise and economically wasteful. I should like to ask the noble Lord, Lord Trafford—and I wish we could debate the matter—whether an actuarial system, which might have been a better road to go down originally, does not still require that those who have contribute to the needs of those who do not have, as we all take for granted in our own families. It seems strange that we find it so difficult to accept the necessity for that, in whatever form, in the community as a whole.
One of the major thrusts of this shift of policy rests on the premise that the so-called welfare state has become extravagant, sluggish and inefficient and needs to be replaced by a much more accurate and defined system of targeting benefits on those most in need. Two major issues need to be addressed with urgency arising from that priority. First, what is the basis on which minimum benefits are ultimately calculated, and how much is included in that figure for long-term needs such as the replacement of clothing, items of household equipment, furnishing and so on? I ask that question because we have heard that under the old system there used to be single payments for just such needs, assessed after a personal interview and visit and often with some attempt at a genuinely welfare dimension to the claim. Now we have the social fund, under which such requests must nearly always be dealt with by a loan and within a budget for the particular DHSS office.
Guidelines lay down that such loans can be up to 15 per cent. Is the benefit figure calculated so that basic needs, to keep people above the poverty level, will be covered leaving a surplus of 15 per cent. for those rather major items? Or is it just a guess? Or is it a device to frighten off all but the most hard-pressed? If so, what does one then make of the refusal of social fund officers to give some claimants any loan at all on the grounds that they are too poor to pay it back?
I should therefore like to ask the Minister whether he will press his department to give very careful consideration to ameliorating the operation of the social fund by at least enabling officers to give a mix of loan and grant, or outright grants in some cases, where they deem this advisable and in the best interests of the family or person concerned. I ask him as a matter of urgency to assess how much it is reasonable to expect people to pay back out of such very basic incomes at a time when inflation is again

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on the increase and moving ahead of the level of benefit, as it nearly always does.
The second point is that social security payments, as we all know, do not stand alone. They have to be seen in a context. That context includes a steady shift towards indirect taxation and unsubsidised or low subsidy charges for a whole range of basic goods and services—water, electricity, gas, rents, transport, part of the community charge and so on. The evidence makes clear that basic rates of benefit are not keeping pace with those other costs and that they also bear particularly heavily on the elderly and low paid. Indirect taxation usually does. The high rate of taper on income support and family credit prolongs the existence of a substantial poverty trap. The recent change in national insurance contributions for the low paid has not made all that much difference for many people.
As we know, one of the great merits of child benefit is that it has cushioned many mothers and children against the worst effects of the poverty trap. It has helped people through the difficult first stage after unemployment, for example. Another great merit is that it has reached everyone and been cheap to administer. I am aware that family credit, when it is taken up, now helps some families more than did the previous payment, but, as noble Lords know, it has become necessary to launch a £5 million campaign—if the information is right—to try to reach people to tell them that they are entitled to that particular benefit. It still requires a form of 12 pages, which is quite a long one.
When comfortably-off people appear on television telling us that they do not need child benefit—which is of course true—I wonder whether they would be equally ready to appear on television to tell us that they do not need mortgage interest tax relief. Both are universal benefits. It is hypocritical to attack the one while defending the other, especially when child benefit reaches a far greater number of families and children in need—the next generation and the people most at risk in our society—for all sorts of reasons and when one remembers that mortgage interest tax relief is partly responsible for inflating the cost of housing in recent years.
The General Synod of the Church of England recently passed a Motion by 270 votes to none asking Her Majesty's Government to review the workings of the Social Security Act after 12 months with a view to ameliorating the lot of those who can be seen to have drifted deeper into the poverty trap. That Motion originated in Carlisle and not in London; considerable anxiety was expressed and many examples adduced from all over the country. I should like to ask the Minister whether he can give us some assurance that that review will not only be undertaken in his department but that we shall be allowed to hear about it.
We know that all forms of social security are imperfect, but at a time of increasing national wealth there is surely scope for fairer and more generous treatment, at least for the least well off in our society, and—I stress this point—for a more flexible system to meet genuine and urgent need.
6.12 p.m.
Lord Kilmarnock: My Lords, the noble Baroness, Lady Turner, to whom we are so indebted, has cast her net wide. I shall concentrate on only one area of her Motion; namely, community care, particularly as it affects the elderly.
It is estimated that the number of people over 75 will have increased by almost a million between 1981 and 2001, yet there was no mention of that in the White Paper on the National Health Service reform. The Government have had the Griffiths Report for over a year—the noble Baroness mentioned that point—but a curious paralysis seems to have come over them in that field since they have so far issued no response. One of the reasons for that delay may be the recommendation to concentrate most of the power and responsibility in the hands of local authorities, which runs contrary to the Government's obsession with clipping local government's wings. On those grounds, they may reject the main thrust of the Griffiths Report and, conversely, on the same grounds the Labour Party may welcome it. But, if so, it will be rejected or welcomed—as the case may be—for the wrong reasons as there are legitimate grounds for worry over the Griffiths proposals irrespective of the Government's feud with local authorities. Those worries concern the rights of individuals.
There are some sensible proposals in the Griffiths Report. The proposal for a single point of access to community care, which the SDP has long advocated, is one of them. However, in our view that need not and should not imply a single body with overall responsibility both for provision and finding of care, especially if the new system is to be based on a budgetary approach to community care—as Griffiths proposes—rather than on entitlement.
That is the crunch point. Under Griffiths, earmarked resources would be canalised through local government in the form of specific grants to social services departments, but it would be a difficult and complex procedure for local authorities to arrive at the level of funds necessary to fulfil the community care needs of their areas. There will have to be a per capita formula for assessing needs, based on the numbers of the elderly, mentally handicapped, mentally ill and physically disabled people living within a local authority's boundaries, which would involve an expensive and intrusive bureaucracy. In addition, the grant or budget, when calculated, would be cash limited and would therefore incur exactly the same problems as the social fund—to which the right reverend Prelate referred—but on a much larger scale. Furthermore, the fixed budget would seem to conflict with Griffiths' proper concern that people should receive individually tailored packages of care, if only because there would be an inevitable bias against residential care as a result of budgetary constraints. Griffiths argues that there are many people currently in residential care who should not be there, yet research carried out by the Social Policy Research Unit at York concluded that 93 per cent. of those in residential care out of a sample of 200 were appropriately placed.

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However, to my mind, the most telling of all criticisms of the Griffiths Report is that it militates against individual choice. The report plumps for a system which allows the professionals to make all the important decisions. As noble Lords may recall, the Wagner Committee report, Residential Care: A Positive Choice, published in March 1988, wanted the social security system to provide support either at home or in a home, thereby giving people the choice irrespective of income. The Wagner Committee was attracted, as I am, to the concept of a community care allowance to be given to those with special needs to enable them to procure care services of their choice. That would mean that there would still be a prominent role for the social security system, contrary to the main recommendations of the Griffiths Report.
The objection of cost may be advanced against continued social security funding for the elderly in long-stay accommodation, but in the nature of things social security is open-ended because it deals with unforeseeable contingencies, such as the death of a daughter or spouse, which make continued independence impossible. It must also be remembered that social security payments for long-stay accommodation are strictly means tested. Those who have saved throughout their lives have to run down their capital almost to zero before the DSS steps in. In my belief, that system of means-tested entitlement and individual choice should be preserved along with the local authority provision of crucial services, such as home helps and meals, for those who remain at home.
In that field the Griffiths Report, following the Audit Commission, makes a sound recommendation that there should be a new occupation of community carer to act as care assistant and provide much needed respite care for informal carers. I hope that the Government will accept that recommendation. The dimension of home care is of the utmost importance. At the last census, just over 91 per cent. of persons over the age of 75 were living in private households, 41 per cent. of whom were living alone. As the number of people in that age group increases, it is important that that pattern should continue to be possible. In our view, a vital step forward would be the introduction of a carer's allowance which we have long championed. It would have to be more widely available than the stringently tested attendance allowance and invalid care allowance, but it would make a vast difference to people pinned down almost beyond endurance by the care of elderly relatives and would save on escalating residential costs.
Such a stimulus to home care would be the single most cost-effective and humane step that the Government could take in that field. Will the noble Lord, Lord Skelmersdale, tell us this evening whether the Government will take such a step and, if not, why not? The Government are open to severe criticism for sitting on the Griffiths Report for a year, but if the result of that prolonged gestation is a properly financed framework for community care which takes the best from Griffiths but preserves the rights and interests of the individual, no doubt we
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shall be able to welcome it and even to forgive the Government. However, we are still in the dark as to the Government's intentions. Will the noble Lord lighten our darkness this evening or at least give us a date when the Government will do so?
6.20 p.m.
The Earl of Onslow: My Lords, we must be thankful for the luck that has allowed the noble Baroness, Lady Turner, to have her success in the draw for this extremely well-timed debate which comes so soon after the Budget. In spite of what strike me as very welcome changes to national insurance contributions, and the abolition of pensioner earning rules, we still have earnings and poverty traps at the bottom end of the tax scale which provide real unfairness and disincentives. In the year of my birth—which was 1938—only about 3,800,000 people paid income tax. Under the benign and light taxing influence of the late Lord Attlee, 14 million paid income tax. Under the even more benign and lighter taxing influence of my right honourable friend the present First Lord of the Treasury, 21 million people pay income tax.
Income tax now starts at £86 a week for a married man. That is about a third of average earnings, which are £236 a week. The national insurance contribution starts at £43 a week, which is 20 per cent. of that average wage.
What is frightening about the new and very welcome reduction in the amount paid on the first £43 of earnings is that, when the wage grows from £43 to £44 a week, the tax on the successive pound is 86 per cent., or 230 per cent. compared with the tax paid by the Chairman of British Oxygen on the top slice of his income. I believe that that is a funny way to tax people. It is admittedly only on the first pound. But what is also frightening is that the cost of abolishing that tuppence on the first £43 earned is £800 million. This illustrates how infinitely complicated it is to get the bottom end of the tax and benefit system into decent shape.
Thresholds are still far too low, as I have said, and act as a major disincentive to work openly. They are a great encouragement to the black economy. If one encourages the black economy one encourages unscrupulous employers to pay low wages because they have the people who receive those wages under a threat of some form of blackmail. The Government have recognised the disincentive effect of high tax on high incomes and have correctly, and with great courage, dealt with that disincentive. They have also seen the disincentive and unattractive effect on pensioners of having an earnings rule. They have now abolished it. Therefore can they not apply the same medicine to lower incomes?
On the great majority of wages below about £15,000 per year the combined tax and national insurance contribution is 34 per cent. It is called a national insurance contribution but it is no more a national insurance contribution than is sitting in a Bedouin tent. What has happened is that we have been told by Parliament that 9 per cent. will be raised on people's incomes. That is a tax; it is not an insurance contribution.

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Above £15,000 to the starting point of the higher tax band—which is now £20,700—there is no 9 per cent. NIC. In effect therefore those people pay only 25 per cent. tax. Equally those who earn their income from stocks and shares, or interests on savings or deposit accounts, or whatever it may be, pay only 25 per cent. tax. The noble Lord, Lord Trafford, or perhaps it was the noble Baroness, Lady Turner, who pointed out that national insurance raises about two-thirds of the amount that income tax does. I am advocating that the two should be combined. We must therefore go to an integrated tax benefit system devoid of all the distorting allowances.
One man's mortgage tax relief, pension fund relief or freedom from capital gains tax on his house when multiplied up, amounts in lost tax to between £15,000 million and £20,000 million a year. All those allowances have to be paid by someone else's tax.
I am not a redistributor of income. I like the idea of having better off people. However, I should like to have the system changed so that the poor are properly looked after. In my view, we can do that only with a tax benefit system which is paid for by general revenue. I see no possible merit in a quasi-insurance cum tax system which was invented by a megalomaniac Prussian with a moustache. It was not invented by the late Lord Beveridge or that great son of Lord Beveridge, Norman Fowler. It was invented by Bismarck to keep the Silesian working class loyal to Prussian rearmament before the 1870s war with France. If my right honourable friend can upset the lawyers and the doctors, surely she can have a good old bash at Bismarck's memory.
6.26 p.m.
The Earl of Longford: My Lords, I have listened with much pleasure to the noble Earl, Lord Onslow. I should not like him to think that in any sharp remarks that I make about his Government I am referring to him or, for that matter, to the noble Lord, Lord Trafford. I count it a privilege to support the brilliant speech of my noble friend Lady Turner, who is so expert in these matters. Since the late Lord Beveridge was mentioned, I was, I suppose before Norman Fowler was born, personal assistant to Sir William Beveridge, as he then was, for three years. But those days are long since past. I shall confine myself to matters with which I am more familiar.
We are all aware now of what Thatcherism means. Some Members in this House presumably love it; I do not know who they are. Some of us certainly detest it. Most of us know what it is by this time. It stands above all for the appeal to self-interest. Appeal to self-interest is all very well in its way. We could hardly get up in the morning, say our prayers or clean our teeth without some element of self-interest entering our activities. However, it can be grossly overdone as it is by Thatcherism.
It is a system that has brought great rewards to a few gentlemen, perhaps not many, who work in the city and in related places. It has been very cruel to those who do not fit in. I am not thinking only of those at the lowest end of the scale. I have been
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reading a fascinating new autobiography by the noble Lord, Lord Rawlinson, in which he revealed that in 1987 it was made plain to him that he was not on speaking terms with the Leader of his Party, the present Prime Minister. It is in his book. A little earlier he had offered his services for some voluntary work and had been told that he could expect "no preferment from me". It is therefore possible even for an eminent lawyer——
Lord Trafford: My Lords, perhaps I may——
The Earl of Longford: My Lords, perhaps I may finish my sentence. It is possible therefore for an eminent lawyer and a Conservative Peer to be treated with contempt by the Leader of the Thatcherites.
Lord Trafford: My Lords, I should not like the noble Earl to make a mistake. That was not a statement made by the Leader of the Party but by a then civil servant. It is quoted in the book of the noble Lord, Lord Rawlinson.
The Earl of Longford: My Lords, it was conveyed to him by the present noble Lord, Lord Armstrong, Secretary to the Cabinet, on behalf of the Leader of the Party. It is rather a quibble to say that she did not come to him personally and say, "You can expect no preferment from me." That is rather too much to expect. However, let us leave that issue aside for the moment. I have only the same amount of time as everyone else.
I shall turn to the young. I might have dealt with the old but I discussed them on the last occasion and the subject has been dealt with most effectively by the noble Baroness, and the noble Lord, Lord Kilmarnock. There is therefore no opportunity for me to add anything of value, though I repeat the tributes to Age Concern which I paid last time. Its service in this field are unique.
I was instrumental in starting a centre for young people in Soho 20 years ago, which now receives about 3,000 young people a year. Although I am no longer in an executive role, I am still a patron. I have made enquiries from some of those who work there and some of them have worked there almost thoughout the Thatcher period. They agree that the situation of the young homeless is worse now than it has been in their recollection. It is worth pausing to ask ourselves why that should be, when we are told again and again that we are living in a period of economic success. At times there are references to the economic miracle. There is not much sign of a miracle in a visit to the New Horizon youth centre in Macklin Street—at least it is a miracle the wrong way round. It is some kind of miracle to produce so much wealth for a certain number and so much poverty for others, as the right reverend Prelate explained.
I will take a minute or so to say how things look from that end and just to describe the measures. I do not have time to develop the consequences but I can explain how the young workers, who devote their lives to helping the young homeless, see matters. They point out the following changes that have occurred that have damaged the young people whom

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they are trying to help. The changes began with the board and lodging regulations in 1985, which limited the length of time that under-25's were allowed to spend in any one place. Secondly, there was a social security upper limit for bed and breakfast. Thirdly, the situation was worsened in April 1988 when the DHSS was instructed to pay supplementary benefit two weeks in arrears. I cannot remember what possible arguments were introduced for that. Fourthly, the benefits were cut for the under-25s and, fifthly, in September 1988 compulsory youth training schemes were introduced for 16 to 18 year-olds without scant concern for the impact on the young people. There were five changes. I just mention them, but I do not have time to spell out the consequences. They represent an evil policy of which this country should be ashamed.
6.34 p.m.
Earl Grey: My Lords, I am grateful to the noble Baroness for introducing this important debate this evening. I have discovered that out of a population of over 56½ million people, 10 million are of pensionable age. Inhouseholds which had one or more persons aged 65 or over living in them, 36 per cent. lived on their own, 52 per cent. lived with their spouse, 12 per cent. lived with their children or relatives and 1 per cent. lived with a non-relative. Of those receiving care from family, friends or neighbours, 76 per cent. were elderly, of which 15 per cent. were over 85.
Elderly people occupy 43 per cent. of the unfit housing in England, which means that resources must be found for repairs and improvements. We have been fortunate that the past two winters have been mild; but we must be prepared for severe conditions in the future and not have to worry about it when it is far too late. Pensioners spend one and a half times more on fuel than the rest of the population. We appreciate the Government's help during the winter when conditions reach a certain level, but it does not have to be freezing for people to endure hardship living in a draughty and damp environment.
We welcomed the Prime Minister's statement last week that the health service is not to be privatised. The proposal that GPs should be given their own budget for buying hospital treatment for patients and the purchasing of drugs is of doubtful value. The elderly are the largest users of the health service. The Government intend to make it easier for patients to move from one practice to another. In rural areas, where there is often only one practice, this is impossible. Also in rural areas, such as the South-West, a high proportion of the population is elderly, and the work of local doctors is stretched enough already in caring for these people.
We welcome the abolition of the earnings rule. That is right and fair for pensioners who wish to continue working without being penalised. The Chancellor described that as a long-overdue reform. He is right, but it has taken 10 years for the Government to implement a promise made. I wish that the measure had come into force many years ago. We also welcome the extension of the age allowance to those who are aged 75 or over. The Chancellor's
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prediction of increasing inflation is alarming for all of us, but even more so for the lower paid and the elderly members of our society.
With reference to the community charge which will soon be with us, Age Concern is worried because of the elderly people on low incomes who live in areas where the charge will be high. It is estimated that one third of pensioner couples will be worse off than under the domestic rate system.
Pensioners in residential and nursing homes are exempt, which is welcoming news, but those moving in and out of care or living in sheltered accommodation will be liable. It must be difficult continually to monitor, assess and account for the movement of these people, and it will incur unnecessary cost of time and money. Will the Minister give some thought to that problem?
It is a worrying situation for households where an elderly person or persons is being cared for by relatives or friends living under the same roof. I believe that there are 6 million carers in this country of one kind or another, and 2 million of these have no help at all, often causing great hardship to them and to the person they are looking after. I should like to see more publicity in order to make people aware of the various kinds of help that they can receive, not only in terms of financial aid, but also of a practical and physical nature.
Last week's Budget has improved the conditions of the elderly. I hope that next month a generous increase for pensioners will be announced. That would be most welcome. It would be of great comfort if fewer people had to claim supplementary benefit in order to keep up their standard of living.
I should like to give a special thanks to those voluntary organisations and the people who give their free time to visit and involve themselves with caring for the elderly. Their contribution is invaluable and of great comfort to those in need. The more the elderly are in contact with the outside and the greater the encouragement to be in contact, the greater the chance for them to leade a worthwhile satisfying life.
6.37 p.m.
Baroness Ewart-Biggs: My Lords, I join other speakers in thanking my noble friend Lady Turner for giving us the opportunity to discuss this very important subject this afternoon. I also congratulate her on a clear and comprehensive introduction to the debate. For my part, I shall make a few comments on how social policies are affecting perhaps the most vulnerable group of all: those young people, girls and boys, who through no possible fault of their own lack a sound and protective family base.
It is a fact that although leaving home is for most young people a natural process, for some there is no choice about when they leave. Many have been in care and at the age of 18, or often earlier, they must manage on their own. For others unemployment, poverty, over-crowding, physical or sexual abuse, or simply family tensions with step-parents and so on, mean that remaining at home is not a real option.
In considering the problems which face those young people, how are Government policies

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compensating them for the lack of family support which they so badly need? Here the answer is very stark. So far as a clear policy towards these young people can be discerned, it would seem to suggest the view that young people need controlling and coercing into becoming useful citizens rather than being given the extra support that they so obviously need. Their chances to make a choice among training work or voluntary work or improving their educational qualifications is severely restricted. There is no guarantee that an adequate safety net will be provided for those who need it.
To illustrate what I mean I should like to give a few examples of the problems faced by young people using a day centre for young homeless people. I follow the line set by my noble friend Lord Longford. The centre is called London Connection and I was partly instrumental in setting it up. It is situated behind St. Martins-in-the-Fields. We must remember that Shelter estimated that in 1987 there would be between 25,000 and 40,00 young people sleeping rough. There is little doubt that since then accommodation options for young people with little money have been seriously curtailed.
As has already been mentioned, bed and breakfast accommodation is no longer a stopgap. The private rented market has contracted over a number of years and the new Housing Act, without the protection of fair rents or housing benefit thresholds set at appropriate levels, will mean that young people will find no opportunity with private landlords. The sale of council housing means that boroughs, which at one time were far-sighted enough to treat young people as vulnerable under the Housing and Homeless Persons Act, no longer have the housing units to maintain them. Finally, hostel places for those lucky enough to find them are being placed in jepoardy by proposals to remove payments for essential service costs.
An additional cause of concern for those who work with young people is the devastating impact which they anticipate the poll tax will bring. It is feared that homelessness among young people will become an increasing burden when low-income families can no longer support their children.
The cumulative effect as seen by the youth workers at the London Connection day centre is that more young people are being forced into insecure forms of accommodation—for example, friends' floors, squatting (which is becoming increasingly dangerous with the growth of the protection racket) and sleeping out.
When visiting the centre I have often seen the young people who come in after a night out. They are totally exhausted and immediately go to sleep. When lying asleep they look incredibly young; indeed, they are incredibly young. Many are only 14 or 15 years old and they have finally found a place of safety offering warmth and someone who will protect them from the dangers of a big city.
It has also been noticed that there has been a rapid deterioration in the motivation and self-respect which exists among young people who must suffer such difficulties. There is also increasing evidence
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that the street culture is developing as they become more disaffected with the system which they rightly consider provides nothing for them.
The majority of young people who go to London Connection are willing to take a place on YTS. However, they are unable to retail it unless they have accommodation. As my noble friend Lady Turner has said, they are caught in aCatch-22 situation of not having the resources to find accommodation until they are established on a scheme. For those people under the age of 18 not on a YTS course or in work, the removal of the safety net has led to extreme hardship. One sees involvement in begging and in other means of survival, and the rapid criminalisation of young people in such a situation is extremely worrying. Last Wednesday we talked about the increase in crime among young people. This Wednesday we are giving some of the reasons for that increase.
In my final minute I should like to illustrate what I have said by giving a few examples of the young people who visit the centre. There is a young man aged 18 who came out of care. lie is currently homeless while waiting for a housing association flat. He left his last job because he believed that it was unsafe—and I expect that it was. Consequently his income support has been reduced. He has been told that when housing is available he must make a contribution to his rates of 20 per cent. from his income support. One asks oneself how he will cope on £27 per fortnight to cover rates, food, travel and so forth.
There is a boy aged 17 years from Manchester. He came to London to look for work having finished a YTS course in Manchester. There was no chance of obtaining the job he hoped to find in London. He was accepted on a YTS course in south London but was unable to find local accommodation. He had to leave temporary night shelter accommodation, slept rough and tried to continue on his YTS course. That indicates that many young people are trying to deal with impossible situations. He found it too difficult to cope and is now sleeping rough and begging money to survive.
A girl aged 17 from London is currently attending college taking a B-tech course and trying to live without benefit. The course is 27 hours per week; that is six hours over the limit for income support. Although housing benefit is being paid to the hostel where she is staying, she receives no income support. She is having to survive on £7 grant per week for travel, clothes and so forth, and may have to leave the course because of financial difficulties.
The Earl of Dundee: My Lords, I am sorry to interrupt the noble Baroness, but in view of the time limit I wonder whether she can draw her remarks to a close.
Baroness Ewart-Biggs: My Lords, I was doing so, but as my noble friend Lord Blease did not speak, I thought that I might avail myself of one extra minute.
The Earl of Dundee: My Lords, that may be acceptable but perhaps the noble Baroness could prepare to draw her remarks to a close.
Lord Graham of Edmonton: My Lords, the noble Earl has taken two minutes to tell my noble friend that!
Baroness Ewart-Biggs: My Lords, I mentioned to my noble friend that I might use an extra minute. I have reached the end of my remarks and should like to draw the situation to the Minister's attention in the hope that he will take it to heart.
6.46 p.m.
Lord Bauer: My Lords, the few noble Lords present must warmly thank the noble Baroness, Lady Turner of Camden, for providing the opportunity to act not as a revising Chamber but as a forum of discussion. It is a role which inevitably recedes amidst much controversial legislation.
Although I sit on the Government Benches I have serious misgivings about major aspects of policy, but for reasons different from those of the noble Baroness. Inflation, which has hardly been mentioned today, exceeds 7 per cent. That is a result of lax monetary policy. Even with 7 per cent. inflation, money loses half its value in 10 years. The hardships and injustices of inflation are familiar. So are the difficulties of people with modest means to protect themselves. To the extent that some are protected others suffer more. That is why Keynes wrote:
"We must make it a prime object of deliberate state policy that the standard of value…should be kept stable".
As though inflation were not bad enough, in spite of last week's budget the low paid are still heavily taxed. This is inequitable and encourages moonlighting, as was noted and developed in the speech of my noble friend Lord Onslow. His speech was serious, informative and yet also amusing. The earnings rule for pensioners was abolished only the other day. Wages councils, which deny employment to needy people, still operate as does the dock labour scheme. More important, the malfunctioning of the housing market bears hardest on the young and elderly. It is exacerbated by local authorities with unused or underused housing stock, or those which refuse planning permission to convert houses into flats for fear of gentrification.
Universal child benefits include payments to the rich. The DHSS pursues well-to-do women who do not take them up. Labour and SLD critics rarely address those shortcomings. Instead they urge more indiscriminate spending for the unemployed and the poor. For my part, failure to address those issues is most disturbing and unexpected. Mrs. Thatcher has been Prime Minister continuously for longer than anyone—since before 1832—yet these and other anomalies persist.
I am baffled by some statistics. Currently approximately 250,000 people are recorded as being unemployed in Greater London. Yet department stores, restaurants, shops and hotels, persistently advertise vacancies at all levels, many requiring neither experience nor training. One advertisement I saw read:
"If you can walk, talk, read or write we have a job for you".
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Statistics about poverty are also baffling. How can millions be at or near subsistence level when in 1985 97 per cent. of all households had television, 86 per cent. in colour? State-provided or subsidised necessities continue amid well-nigh universal ownership of colour television and other appliances
This encourages reliance on handouts and undermines the family. Some of this is visible as, for instance, widespread child neglect and extensive criminality. Some aspects of the latter figured in the debate last Monday initiated by my noble friend Lord Reay. We see the emergence of an underclass of people with little respect for themselves, their families or others, and who in turn enjoy little respect, but evoke a mixture of condescension and fear. These matters are discussed much more openly in the United States than here. Black American professors have written eloquently on the destructive effect of state welfare on the negro family.
There are in this country, sadly, large numbers in real distress—emotional, mental and financial distress—who cannot help themselves and may not be helped by relatives or friends. There are old and lonely people, disabled or mentally disturbed or chronically ill people, victims of rapid change or of inflation and other categories. But state-provided benefits often cannot reach such people. Non-politicised charities, religious bodies and other voluntary activities can do so much more effectively, together perhaps with specialised government agencies. But insistence on universal benefits and allegations of mass poverty and unemployment divert attention and resources from helping the distressed.
Until recently there was in Britain a strong tradition of self-reliance. I once lived in Pimlico, then a very poor area, and saw the strenuous, even heroic, efforts of many people to provide for their families and to help themselves and others. Until very recently many people did not claim supplementary or child benefit, even when they knew their entitlements. Most now claim child benefit just because it is available. But some have misgivings because they do not think it right that they should receive taxpayers' money to bring up their children. Self-reliance, self-respect and family responsibility battle against an overwhelming tide of state provision. However tentative some of these observations may be, one conclusion is firm: the supporters of universal welfare payments do not enjoy a monopoly of compassion and understanding of social realities.
6.53 p.m.
Lord Stallard: My Lords, I should like to congratulate my noble friend Lady Turner for having initiated this debate, allowing us a further opportunity to discuss these important issues. I should also like to add my sympathy for the noble Lord, Lord Banks, who is not well enough to attend today. He has contributed a great deal over very many years to our debates on these issues in this House. I look forward to him being well enough to resume his place and to give us the benefit of his expertise as soon as possible.
I should like briefly to refer to last Wednesday's debate on crimes of violence and public protection.

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It was an important, interesting, informative and constructive debate on a subject which is worrying many of us who live in inner city areas. We are becoming more and more alarmed. While I accept that the causes for crime and violence are many and very complex, I remain unconvinced that there is no correlation between unemployment, bad housing, environment or deprivation and crime. There seems to be some doubt about that, according to some of the speeches. There is no doubt in my mind or in the minds of many thousands of people that these factors have some influence on the level of crime and violence. I live in inner London in what is called a high-risk area, where car crimes and burglaries are so frequent that unless someone is injured in the course of a crime it is pointless to report it to the police. That only adds to the problems of people living in such areas, and provides incentives for those who engage in crime.
The noble Earl, Lord Ferrers, in winding up the debate on 15th March said at col. 300 of Hansard:
"My noble friend said that if criminality becomes the norm and lawfulness becomes eccentricity, black becomes white and you turn your values upside down. I thought that was a graphic description and one which is very true, because once one's values are turned upside down one's sensitivities become capsized and dulled and nobody knows what is right or wrong."
I, with thousands of others, would certainly endorse that, and I would say that we are halfway there already: certainly we are going down that road already. Unless a more realistic approach towards the special problems and needs of policing in the inner-city areas is adopted, and soon, by this Government, the situation will worsen. That of course will be a direct result of government policies.
Thousand of people, as has been said, are living in bed-and-breakfast accommodation; thousands more are in temporary hostel accommodation; hundreds of thousands are on local authority waiting lists; and people are sleeping rough in our major cities in cardboard boxes in shop doorways and on park benches. Why, in the face of all that, are we building fewer houses now than at any time since 1920? There are one and a quarter million fewer homes available for rent now than there were in 1979, and for every £100 invested in housing in 1979 only £32 was invested in 1988. Why is that, in the face of all those circumstances that exist?
At the moment council tenants all over London are worried sick about the possible effects of the Housing Bill. Representatives of property companies are working very hard on estates, trying to persuade tenants to buy their flats and offering them special endowment polices for the purpose. They are generally exploiting and increasing the fears that already exist among tenants. If time permitted I should like to enlarge on that situation, but there will be other opportunites. One thing is for sure: the predicament of thousands of council tenants as well as of private rented tenants is fairly and squarely a direct result of government polices.
More people are suffering from breakdowns, depressions, drug abuse, alchoholic abuse and
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associated problems. So I ask: why are voluntary organisations, who do so much sterling work in these areas, being starved of resources at national level and, as a result of financial restrictions on local councils, at the local level as well? Some are being forced to close down and others are having to limit their facilities. We have demonstrated on many occasions the reasons for this state of affairs, and we shall continue to do so.
The same applies to hospitals. There are increased waiting lists, empty beds, unused equipment, threats of closure and now a major upheaval arising from the White Paper on the National Health Service. Add to all these, as has already been said, the imminent effects of the poll tax and we fear that in many areas families with grown-up children living at home will have to pay three or four times as much as their existing rates. Imagine what would have been the result if any council had announced increases of that order in rates in any given year. We all remember the Tory campaigns mounted against far smaller and more easily justifiable increases in the recent past. The effect of this will be to drive more youngsters to leave home; more families will be broken up and all our social problems will be exacerbated. The reactions of people in the next few months, in my view, will leave no one in doubt as to who is to blame for this unnecessary development.
I should like to finish with two points that have already been touched on. The first concerns the funding arrangements for special hostels. I have asked questions about this before. Although I can welcome the Secretary of State's Statement of last Thursday concerning support for this sector, I am left wondering why the Statement is so vague and why it does not seem to offer a satisfactory long-term solution. Why not delay the implementation from October and continue with the present arrangements while the promised consultations are used to hammer out a long-term solution? I should like the noble Lord who is to reply for the Government to say something about that.
I should also like to welcome the Government's decision to abolish the earnings rule for pensioners, as other speakers have done. However, the Sunday Telegraph three days ago soured my welcome a little. It said:
"The move may have an altruistic look about it: certainly Britain's pensioners are not complaining. But it is hard economic reality rather than philanthropy which has persuaded the Government to act.
"The reality is that Britain's employers urgently need to woo our rapidly growing elderly population back into the labour market if they are to survive the demographic 'time bomb' on which the country has been sitting since the 'baby boom' of the mid- 1960s."
That is not what the Conservative Party said in its manifestos in 1970, in 1983 or since. Nevertheless, it is welcome.
Having said that—there is much more that I could say—I am convinced that the Government's social policies have amounted to a dramatic reduction in the standard and quality of life of millions of people. I only wish that I had more time to develop my arguments further.
7.1 p.m.
Lord Johnston of Rockport: My Lords, I was both pleased and grateful to the noble Baroness, Lady Turner of Camden, when in the closing remarks of her opening address she said that she could not claim that the Government's policies were all a failure. Unfortunately, or sadly, the noble Baroness qualified the remark by adding that it all depended on where one started. I should like to dwell on two or three points where I think they have a very good record.
When we first came in, the manifesto committed the new Government to finding ways to simplify the social security system. It had three aims: to restore the incentive to work, to reduce the poverty trap and to bring more help to those in greatest need. In coping with these requirements, the Government's long-term strategy towards the needs of the family culminated in the major reforms of the social security system in April 1988. That is not to say that improvements to the welfare system were not constantly under review. For example, even before these reforms supplementary benefit levels had increased by 6 per cent. ahead of inflation and family income supplement rates for children had increased by 20 per cent. ahead of inflation.
The Government's record on support for the family is proof positive of their intention to continue the financial assistance to low income families and keep it as a top priority. In all, nearly £10 million now goes on help for the family, half on income related benefits, family credit and income support, and half on child benefit. Family credit goes well up the income scale, and steps are being taken to improve its take up.
As noble Lords will know, an announcement made on Monday last stated that some £7 million is to be spent on a nationwide advertising campaign to persuade more people to claim family benefit. Child benefit remains a substantial contribution to the financial upkeep of a family, but uprating it simply spreads the load wider, helping the richer families and not those on family credit and income support. In the hope of getting financial assistance to those whose needs are greatest, £70 million extra will be targeted this year to 1.6 million poorer families and 3 million children. I know that some noble Lords on the Opposition Benches speak in terms implying that child benefit no longer exists, whereas I am sure most people would confirm that it accounts for some 10 per cent. of the 1988–89 social security budget amounting to some £4.5 million. Its value will be reviewed again this autumn.
We have heard many opinions expressed today covering all aspects of the Government's social policies, but one subject has concentrated my mind. It concerns the employment of disabled men and women. While I appreciate that some are too disabled to work, there are some young disabled men and women who, despite their handicaps achieve with adequate training a creditable boost to their morale and to their pocket.
As we all know, we are an ageing society. If the forecasts are right, the number of school leavers will not match the job vacancies available in the future. Would it not be a wonderful chance for us to do
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something really helpful for the disabled and bring them in as an additional workforce? There are snags to this. Nevertheless, we have to consider their situation today. If they start work, they immediately lose the benefits that they receive covering their incapacity to work—statutory sick pay, sickness benefit and invalidity benefit. They do not necessarily lose benefits relating to a medical condition such as mobility allowance and attendance allowance, but the overall loss of benefits as they now stand will act as a frightening deterrent to anyone in their position. I submit that that is wrong. It was an aberration when in 1984 the House voted to disallow the right to buy for disabled people. However, this was rectified in the last housing Bill, as we know.
It is because of all the difficulties facing the disabled that I wish to make a special plea to my noble friend the Minister to consider whether there is some way in which a premium may be granted to those who choose to work. I feel sure that special help given in this way would lift a burden not only from their mind but from the mind of their families too. I believe that they deserve our consideration.
7.6 p.m.
Earl Russell: My Lords, I wish to join in the thanks to the noble Baroness, Lady Turner of Camden, for introducing the debate. I should like to thank her also for her kind remarks about my noble friend Lord Banks. As his understudy, I am fully aware of how much the debate loses by his absence.
When I was a boy, I learnt to recognise when there had been a great storm out at sea by the flotsam that drifted up on the shore of the Atlantic. Similarly, one recognises disturbances in society by looking at what happens to the social security budget. In particular I believe that one can recognise the failure of many other government policies by the effect that they have on social security figures. The social security budget indicates demographic change, which in many ways must be welcomed. It shows also the effect of a good many government policies. The Government have learnt their lesson in the case of unemployment. Now that the unemployment statistics have been lowered, that effect is reduced.
I am slightly surprised to notice in the Government's public expenditure White Paper that spending on the long-term sick and disabled has increased by 90 per cent. in real terms since 1978–79. That made me wonder whether it is really the case that the health service is safe in their hands. I notice the effect on housing benefit of a continually rising cost of housing and the likelihood that that will be exacerbated by the move towards market rents through the Housing Bill. The Government projection is that the number of people in receipt of rent rebate is likely to drop from 3.6 million this year to 3.1 million next year. I wonder whether the effect of government policy may not be to falsify that prediction altogether. I notice that the effect of a 1 per cent. increase in the retail prices index is a cost to the social security budget of £455 million. He is indeed a very expensive Chancellor!
I take the point that the noble Lord, Lord Trafford, made about the generosity of the taxpayer, but in

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many fields costs have to be met somewhere. I have never been convinced that there is an ultimate net saving by shifting things from the public to the private purse if the net result is that it costs the country more. The noble Lord mentioned the danger of running into buffers. I want to suggest that there are buffers at the other end of the line too and that we may be rather nearer running into those.
The nearest we have in the poorer parts of London to the old style Sherlock Holmes-type agony column are the notice boards in the windows of local tobacconists. In looking at those in Kilburn I first notice the many advertisements for rooms to let but which state "No DHSS". They are not, of course, up to date with the change in the name of the department but, once they are, "No DOSS" will become an even more popular notice.
There is a considerable problem and, one suspects, a considerable waste of money. Keeping people in bed and breakfast accommodation can cost twice as much as a new council flat. I have seen the figure quoted in the Independent that in London the cost for a family of three can be as much as £24,000 a year. I wonder whether that represents value for money.
I cannot deputise for my noble friend Lord Banks without touching on the issue of child benefit. I have a vivid memory of the day when I brought my first child back from hospital. On my fourth agitated visit to the chemist, he shook his head at me and said, "Expensive things, these babies". He was right. If the Government are really concerned about the money going where it is needed, perhaps they will consider the option of uprating the benefit and taxing it. They would then be targeting the money at the people who really need it, who are many, and doing so efficiently.
One of the biggest problems that we must touch upon now is the effect on the young. I understand the case for having people living with their parents. Relations between the young and their parents are much better than they were in the 1960s, and I welcome that, but it is not a universal situation. There are families where people have an allergy to each other and in those cases it is better for the health of both children and parents that they should have the option of being apart. However, it cannot be done on the sort of money available, which could easily be spent in a week in London merely genuinely seeking work—that is extremely expensive to do in London.
If a person cannot live on benefit and cannot find anywhere to live, he may well beg. When I introduced this subject in a Question about the young on social security, the noble Lord, Lord Skelmersdale, said that it was a bit far a field. I beg leave to doubt that. In reading today's Independent, your Lordships may also think of what else people can do when they cannot live on their social security benefit. I wonder whether the oldest profession is not the one in which this Government have done most to increase employment. I will not dwell further on these points, but the noble Baroness, Lady Ewart-Biggs, said a great deal on them which demands attention.
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I must mention also the possibility of crime as one option that those who are destitute can turn to. I ask the Minister whether putting people in that position really is the best way to foster self-respect.
Finally, I should like to touch on one special category of the young, about whom I know something. I refer to students. The position is extremely tight. One of my students put it to me that on the normal grant you can just about afford a pint every other day. That is not destitution but that is the position of someone who is a good manager living in a hall of residence. You do not need much to go wrong to be in severe trouble. The changed need allowance for housing benefit has caused acute hardship among students in London. I hear about that almost every day.
I mention only one other point before I resume my seat—the under-staffing of benefit offices and the difficulties resulting from that. One of my pupils lived close to Broadwater Farm. He referred to one aspect which no paper has yet mentioned. There were delays of six weeks at Broadwater Farm in paying out unemployment benefit. That twice led to the office being sacked. I wonder whether that is a case of saving public money proving in the end a very expensive policy.
7.15 p.m.
Baroness Jeger: My Lords, we are all indebted to my noble friend Lady Turner for initiating this debate. In the minimal time at my disposal I should like to raise one or two topics.
I refer first to the report, Children in Danger Fact File 1989, published by the National Children's Home. That is not a bolshie organisation but a respectable and very knowledgeable institution which is quoted in The Times today. The article states:
"The gap between the rich and poor is widening. Twelve years ago, the top 20 per cent. of households had five times the annual income of the bottom 20 per cent, Now top households have seven times that income.
Poverty and ill-health are inter-related, the organisation says in its annual review of child welfare. 'The health of the nation's children shows itself to be stubbornly attached to class and income. It is hard to be optimistic about a society which seems to be bent on exposing the already disadvantaged to further hardship and danger'".
That is the problem before us tonight.
We have to be brief but I should like to ask the Minister, for whom I have a great respect, how we can continue in a situation of government confusion and inefficiency. The social security commissioners recently upheld four test cases on widows' pensions which, taken together, represent just one example of the muddle in the department. There is confusion about transitional benefits for the disabled and in regard to housing. We heard from the other place last night that there are to be changes in housing benefit. As I understand it, some old people who have lived in their homes for years, their young people having flown the nest, will lose housing benefit because it is held that they should not have a spare room for their grandchildren or for someone to use if either of them becomes ill. That seems to be absolutely brutal and wicked.

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We do not know what is happening about transitional benefit for disabled people. We do not know what is happening about the differences in housing benefits. We do not know what is going to happen about family credits. We know that the Minister in the other place is seeking to encourage more people to claim. I believe that he should not be doing that but should be abolishing the whole scheme.
Family credit is only partly taken up because people do not like it. It is also poorly taken up because the application questionnaire is so appallingly ridiculous. It has 87 questions in 15 pages. It has the most absurd questions, and that is one of the reasons why there is such a low take-up. Apart from the fact that it has 87 questions and 13 sections, some of the questions are absolutely appalling.
I wish the Minister to tell me how he would deal with one of them. It is in these words:
"If you or your partner are not getting Family Credit now, fill in this form, and send it to us as soon as you can".
Then it states,
"We cannot deal with your claim if you send it in too soon. And if you send it in late you could lose money".
Nowhere else is this situation explained. When the Minister is trying to discover the reasons for the low take-up he might take into consideration the total ridiculousness of these forms. I believe that the reason is that people do not like being means tested for benefits; that is the real answer to this question. When we turn to the question of child benefit, people know that they get it and there is no problem. It is absolutely absurd for the Government to say that money is being wasted on people who do not need it.
When we consider the Budget we find that the personal allowance and the married person's allowance have been increased. There is no question there of money. The married man's allowance is not related to his pay or to his rich wife. Therefore I ask the Minister how this mattter can be worked out. Social security has gone up by 5.9 per cent., but in the Budget the marriage allowance and the personal allowance have gone up by over 6 per cent. Surely that is not fair.
The Chancellor of the Exchequer said that he was trying to help people on lower incomes. National insurance has to be adjusted so that the contributions are reduced for the poorest people. There has been a great deal of publicity stating that £3.70p would help the lower paid people. I am very modest because I cannot add up. But I have found that if a man or a woman is earning £70 a week, he or she would gain 21p from this change in national insurance. If he is living next-door to a chap who is earning £80 a week, that chap will receive £1.41p. I honestly believe that we need a ladder, and that that is a fair concept. But we have the rungs of the ladder in the wrong place. We need more fundamental changes in the relationship between taxation and national insurance.
I have to shut up very quickly. The child benefit freeze saves the Government £203 million. How much of that money is being re-targeted? Can the
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Minister say what part of that sum has been put on to family credit, which we know has been very small in its take-up level? Are the Government gaining from this £203 million that they are supposed to have in their pocket because of the freezing of child benefit? I wish also to ask the Minister what he is doing about the social fund. Is it in profit and what is the Minister doing with it? Is he making sure that there are more funds available for people who are really in need?
7.26 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Skelmersdale): My Lords, if I learnt nothing else in the period when my right honourable friend the Chancellor of the Exchequer was Secretary of State for Energy, and I was the spokesman in your Lordships' House, it was the art of timing. I do not recall the noble Baroness, Lady Turner, as a fellow disciple, but the House will recognise her lucky timing in having her debate only eight days after the Budget on which views have emerged on all sides of the Chamber in varying shades of grey, tinged on one or two occasions with the green of envy. All that money wasted on repaying the National Debt, seems to be the theme behind some of the speeches I have heard Opposite. Nonetheless I genuinely congratulate the noble Baroness.
Even though the subject is so wide it means that I am unable to give more than a broad brush response. I shall of course convey your Lordships' thoughts to the most appropriate of my right honourable friends. For instance, I cannot add anything to what my noble friend Lord Hesketh said about community care on 1st February or what my noble friend Lord Ferrers said about crime last Wednesday. Your Lordships will be debating tomorrow the housing benefit paid for under occupied property. For now, I shall only remind the House that local authorities have always had similar provisions.
Why do I start with the Budget? The noble Baroness was good enough to give me notice some time ago that she expected the debate to concentrate on benefits. She is quite right of course. I can think of nowhere else in Whitehall where social policies and prudent monetary control are so inextricably entwined and this year's Budget was indeed a social policy document. Before I develop that theme, I should like to state the Government's overriding belief, in a misquotation:
"Be you ever so humble the state is below you".
It is, in a word, the country's biggest insurance policy, and vast amounts of it are free at the point of use; namely, health care, education, non-contributory benefits and so on.
The noble Baroness, Lady Turner, struck straight at the jugular. I was glad to hear the balanced views of the right reverend Prelate. In 1986 this House approved and improved, in agreement with another place, the Social Security Act—the biggest reform of Social Security since 1948—and in so doing reaffirmed Sir William Beveridge's principles. The Government's objective in putting that legislation

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forward was to build on the belief that people wanted as far as humanly practicable to be responsible for their own lives and it concentrated more on families with children than ever before. That huge reform was not perfect; nor though was the 1948 Act which over the years had numerous tinkerings by many governments of all persuasions, but surprisingly moving further and further away from the essential simplicity of the original scheme, and becoming more and more expensive to administer using money which would be far more effectively spent on improving benefits.
That reform was implemented in 1988 based on information about the social state of the nation that was already out of date. It was based on figures collected between 1983 and 1986. Today my right honourable friend the Secretary of State is setting his hand to the wheel of getting and using up-to-date figures as a basis for future improvements in the benefit system, keeping always in the back of his mind simplicity, efficiency and value for money in its operation.
Two sets of figures are topical. The ones that currently excite your Lordships are those on the take up of family credit. The Government's original forecasts were made in 1987 and were based on the 1983 to 1985 family expenditure surveys—the most up-to-date information available. Assumptions therefore had to be made about what would happen to wage levels and so on by 1988. There was also an assumption that take up would be 60 per cent. What has actually happened is that the numbers are down on our forecasts, but the average award, at some £25 a week, is considerably higher, so that despite the lower numbers we will still be spending more in 1988–89 than in the original estimate—£422 million instead of £400 million. This indicates that those families which are entitled to higher amounts of family credit are indeed coming forward and making their claims.
Recently we have obtained preliminary data from the 1988 family expenditure survey. This very latest information reveals that our estimate of the eligible population was too high, mainly because of increases in earnings levels and employment in the meantime, which are a reflection of our continuing success in stimulating the economy and reducing taxation. There is no question of cutting 250,000 people out of benefit, as suggested by the Sunday Times this week. What has happened is that we have revised our estimates in the light of more up-to-date information. What all this now indicates is that in 1988 take up by numbers was around 50 per cent.—about the same as for family income supplement—and take up by expenditure was 65 per cent.
We shall not allow any sterile argument about statistics to obscure the fact that substantial amounts of extra money are available through family credit. The Government want more working families to come forward and claim the help that is due to them. For this reason we are mounting a major advertising campaign starting in April.
Several noble Lords spoke of low pay and the possible abolition of wages councils. I should tell
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them that there is no simple link between the low pay of individuals and the low income of households. This occurs because households in which a low paid individual lives often receive income from other sources—unearned income, earnings from other household members and in-work benefits like family credit. So if the distribution of earnings widens or indeed narrows, this does not imply any corresponding movement in the distribution of household income, or in the incidence of poverty, however defined.
There is mounting evidence that young people are receiving adult wages earlier, and there have been reports in the press recently that some firms are giving their young staff higher increases earlier. Compare this with wages councils, which have the opposite and insidious effect. Also, firms cannot indefinitely deny higher grades of worker the same increases as councils require for the lower paid without distorting differentials or inflating wage bills.
From time to time we hear calls for a national minimum wage, or the Council of Europe's decency threshold. There is no such thing as the latter. True, the Council of Europe asked a committee of independent experts to advise on the matter. This advice has never been endorsed by member states, either in the governing committee on the European Social Charter or in the council itself. My noble friend Lord Trafford is right.
Even in its own terms, this so-called decency threshold, as a relative measure of low pay, shares the weaknesses or other definitions which relate low pay to average or median earnings. It has risen in real terms by about 25 per cent. between 1979 and 1988 in line with the overall growth of earnings because of the artificial distortions of the 1970s'incomes policies. It is therefore not surprising that the numbers paid beneath the threshold should increase since 1979, given this sharp rise in the real value of the threshold and the widening of the earnings distribution.
Not surprisingly, many noble Lords spoke of child benefit. They conveniently forgot, though my noble friend Lord Johnston clearly did not, that in 61 out of 62 months of the previous Labour Administration, there was a lower rate of child support for families with young children than during the whole of this Government's period of office. To increase child benefit by the 45p that index-linking would have meant this year, we would give nothing to those families on income support or family credit because these benefits are adjusted to take child benefit into account. From this April not only will those families get their normal uprating of the income-related child benefit allowances, but in addition we have given an extra 50p per child. Those noble Lords who call for index-linking of child benefit tend to forget the fact that the poorest families stand to gain nothing at all. The rich getting richer, my Lords. Yes, they certainly would.
In that connection, I should like to mention the most unfortunate absence of the noble Lord, Lord Banks. He persuaded your Lordships during our discussions on the Social Security Bill to pass an amendment—an amendment against the

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Government—which subsequently I described as tautologous. Another word for it, more normal in parliamentary circles, is otiose. The effect of it was rather worse than the current statutory provision for reviewing child benefit, which my right honourable friend is committed to do in advance of each and every uprating.
On appointment, any social security Minister rapidly becomes like the nicer side of Fagin. My right honourable friend is reviewing the situation; and what reviews they have been. The OPCS reports on the numbers and financial circumstances of disabled people are starting to come through. We should have the complete set by the Summer Recess and be able to establish whether the existing benefits really are reaching their goal. New ones, I can tell my noble friend Lord Johnston and the noble Lord, Lord Kilmarnock, will be fully investigated. This is a form of targeting of which this House, in my estimation, would fully approve. Against this, it is interesting to note that spending on the sick and disabled in 1983–84 was £4,320 million. It will have doubled by next year. I accept that the figure is in cash terms and not real terms.
Noble Lords have also mentioned the social fund which, contrary to expectations of noble Lords opposite, is working well. Non-repayable community care grants and interest-free budgeting and crisis loans are providing exactly the kind of help that was needed. Loans have reached anticipated levels of expenditure and community care grants have risen steadily to a point where, in January, they exceeded 100 per cent. of anticipated expenditure for that month. It is interesting to note that some people are on their second and third loans from social security benefits.
From April the average amount of money in the fund will be £46 per eligible applicant compared with £39 at the time the current year's allocations were announced. Nearly 800,000 interest-free loans have been made and more than 100,000 community care grants have been awarded. The review system is proving to be a quick and effective means of handling disputed decisions. Reviews are normally completed in the local office within a matter of days rather than the many weeks it took for an appeal to be completed.
Pensioners, of whom the Motion makes mention, have also been targeted. As the House is fully aware, pensioners overall have benefited during the Government's time in office. The average total net income of pensioners has risen on average by 3 per cent. a year between 1979 and 1986 compared with a total of 3 per cent. in the time the party opposite was in power, a point made by my noble friend Lord Trafford.
The Government have acted quickly to help those who are too old to have benefited in the growth of occupational pensions and SERPS. They needed help. In an announcement last November, forgotten, I suspect, by the noble Baroness, Lady Turner, we said that pensioners on income support would, if 75 or over, receive £2.50 extra if single and £3.50 extra if a couple. The House will be delighted to know that at the point of introduction in October there
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will be no erosion of any transitional addition there may be in payment. Because of alignment those changes will also help disabled people over the age of 60 and those on housing benefit. In all, the changes will benefit nearly 2 million single pensioners and couples, including around 100,000 who may now be able to qualify for income support or housing benefit for the first time, at a total cost of near £200 million in a full year.
I am pleased to have this opportunity to refer to the Government's announcement on 28th February that all those women who were widowed in the six months before 11th April 1988 will be treated in exactly the same way as they would have been if their husbands had died in the previous six months. We have gone further than the commissioners decision on the case of Mrs. Doreen Whitbread by extending it to widows with children. I believe that the Government deserve great credit for this.
Only last week, another change was announced. This time it was for the benefit of 16 and 17 year-olds. I do not accept the premise of the noble Earl, Lord Longford, that that is evil. Further, I can tell the noble Baroness, Lady Ewart-Biggs, that those youngsters who are entitled to income support but who are forced to live away from home will, from July this year, no longer get the level of benefit appropriate to their age, but the £27.40 a week given to 18 and 24 year-olds. The higher level will also apply to all 16 and 17 year-olds claiming housing benefit who are on YTS or in low paid work.
I cannot condone a system where a very real option for healthy youngsters is to exist mainly on social security benefits. Of course, the object of the reforms was to get away from that situation. Not only has this change of status, so to speak, been given, but we shall be extending entitlement to income support during the child benefit extension period to those 16 and 17 year-olds who are genuinely estranged from their parents. Moreover, payments made by local authorities to young people leaving care will be wholly disregarded for benefit purposes.
While I am on the subject, again last week we announced that at last hostel dewellers were to be put on the same basis as those in board and lodging and bed and breakfast hotels by receiving housing benefit and income support. No one I dare say was very surprised. However, what did surprise some people were the transitional payments—that is to say, exactly the same monies are to be available to individuals so long as they stay in the same hostel—and the protection for the hostel movement as a whole.
Why not delay this? The answer to the noble Lord, Lord Stallard, is that even with such a guarantee we shall not know exactly how to finance hostels on a long-term basis until we see how the changes work in individual cases.
Perhaps I may mention housing benefit. We have heard a lot about it. But no one on the Opposition Benches has acknowledged the achievements of the Government in this field. Only this Government has had the courage to ensure that for the first time the system provides help on a sensible and consistent basis. We had the courage to reform the system

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both in 1982–83 and in 1988. The last Labour Government knew that there were problems—the then Supplementary Benefits Commission told them so—but they did not act.
The Government have fulfilled their objectives in reforming the system and fulfilled their commitment to monitor the changes. For the first time help with rent is provided in a way that does not penalise unfairly those in low-paid employment. For the first time everyone on benefit has full protection against reasonable rent rises. For the first time every ratepayer has an interest in the cost of local government. For the first time the taxpayer is not subsidising those who may be richer than he is through having large amounts of savings. But the Government recognised that there were some in vulnerable groups who suffered too sharp a drop in income at the point of change as a result of our fundamental structural reforms. That is why we introduced a transitional payments scheme. And our commitment to keep a close eye on this whole area is demonstrated by the very sensible and sensitive decision my right honourable friend took on 3rd March to extend the closing date for application for transitional payments a further three months to 30th June.
I cannot recall speaking in a debate when the noble Lord, Lord Stallard, was also speaking and not having housing mentioned, especially that of local authorities. I too my Lords have seen terrible things in local authority housing and one event that will remain etched on my memory was going to a bed and breakfast place in West London that had been totally burnt out the week before, one occupant having died. I also knew of local authorities with properties empty for more than six months and which still spend over £10,000 a family on bed and breakfast accommodation. I was interested in the figures put forward by the noble Earl on that point. However, it is no part of my brief today to rehearse the arguments which I was using two years and more ago in another political incarnation. However they remain as valid now as they were then, but I am glad to note that down in local government housing departments, helped by the Estate Action Team, things are slowly improving.
No one attempting to do my job could fail fully to share the concern expressed by noble Lords on the plight of homeless people. The Government's overall housing strategy is to widen consumer choice, target resources on areas of greatest need and improve performance and efficiency in the use of local authority stock. The 1988 Housing Act paved the way with provisions to encourage the private rented sector through deregulation of rents. The current Local Government and Housing Bill follows on from this to lay the foundation for the new system of local housing finance which we consider to be an essential step towards improving local authority performance.
I should tell the noble Earl, Lord Grey, that fear of a disease is often much worse than the disease itself. Indeed, that philosophy is proving to be true in relation to the community charge in Scotland. I
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believe that it will also do so in England. All those measures will provide wider choice and a more efficient housing service for all income groups, including the homeless.
I return now to the Budget, which was indeed a Budget for the people as highlighted by the noble Baroness in her Motion. I agree with my noble friend Lord Bauer that inflation is public enemy number one and this has been very definitely a non-inflationary Budget. But it has been a great deal more than that. It has been a very imaginative use of conservatism.
My noble friend Lord Onslow talks of combined tax rates, and I see his point. It is hot the case that the new system implies high marginal rates at earnings slightly above £43, the lower earnings limit. At £44, a person will pay two per cent. of £43—that is 86p—and nine per cent. of the £1 over the £43 per week. That gives him total liability of 95p per week. A person earning £44 a week will gain £1.25 per week from next October. I should also add that the combination of personal tax and national insurance contributions is not a simple matter. Integration would mean either that elderly people, who of course do not pay national insurance charges, would pay more, or that the elderly would be exempted from the combined charge. I think that that would actually cost more to achieve than the benefit which would result.
At the new tax free limit of £53.56 for a single person, from October he will only pay £1.81 in national insurance contributions, itself some 87 pence less than he pays at the moment. At a stroke my Lords, my right honourable friend has simplified the social security system. He has got rid of two of the three steps in the national insurance contributions scheme which can result in pay increases being more than offset by higher contributions, leaving these employees worse off. At 2 per cent. of your income as the gateway to a valuable set of benefits, like unemployment benefit, invalidity benefit, widow's benefits and retirement pensions, the now initial NIC (national insurance contributions) rate is the lowest since the national insurance scheme was restructured in 1975 by, I believe I am right in saying, the right honourable Mrs. Castle. The noble Lord, Lord Rochester, complained that a reduction of £1.29 per week to 86 pence at the lower earnings limit is peanuts and that we have benefited the higher earner to the tune of £3 a week. But I would ask the noble Lord to remember two things. First, taken together with the reforms to national insurance contributions introduced in my right honourable friend's 1985 Budget, which helped the lower paid contributor and his employer, everyone will be £3 a week better off from October ——
Baroness Jeger: Everyone?
Lord Skelmersdale: Yes, my Lords, everyone; that is, taking the effects of the two Budgets together. Secondly, at £43 a week, net pay will increase by 3 per cent., whereas at the higher earnings limit of £325 per week net pay would only increase by about 1 per cent. due to the Budget.

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The noble Lord, Lord Wilson, made a deep impression on me when all those years ago he talked about the pound in one's pocket. That is how many people measure self-respect these days, however the rest of us may feel. Self-respect is what the Government's policies are all about, and why not?
Baroness Jeger: My Lords, before the Minister sits down will he explain to the House why he says that everyone will be £3 a week better off? From the figures which I did him the courtesy of putting to him, many people will be only 21p better off.
Lord Skelmersdale: My Lords, I hope that I explained in the closing moments of my rather too long speech, for which I apologise, that I was referring to two Budgets not the one Budget upon which the noble Baroness based her figures.
Lord Kilmarnock: My Lords, before the noble Lord sits down again will he remind the House of what his noble friend Lord Hesketh said on 1st February about community care, because some of us were not in the House? As that was the Minister's only reference to the topic, does he not agree that that was a slightly dismissive treatment of a matter which falls squarely within the terms of the Motion? Are we not entitled to a straight answer on the Griffiths Report? It is not a frivolous question.
Lord Skelmersdale: My Lords, in view of the various things that have been going on in social security over the past year or two and because the debate was time limited, I was within my rights to say that I was unable to add to the recent remarks made by noble friends. So far as it concerns community care, I am sure that the noble Lord will read with interest the debate on the 1st February in the name of my noble friend Lady Cox.
Lord Kilmarnock: My Lords, I was asking the Minister to reply to this debate.
Lord Skelmersdale: My Lords, what my noble friend said on the Griffiths Report, for example, was that announcement would be made shortly. He also pointed out that "shortly" was not as soon as when he used the expression some days previously in answer to a parliamentary Question. Beyond that, I do not believe that it is productive to go tonight.
Lord Kilmarnock: My Lords, I am most grateful to the Minister for that clarification.
7.53 p.m.
Baroness Turner of Camden: My Lords, I should like to thank those noble Lords who have participated in what was an extremely interesting debate. It has, as noble Lords have said, covered wide ground because the terms of the Motion were wide. We could probably have gone on for a great deal longer than two-and-a-half hours had we had the time. I am sure that noble Lords could have said a great deal more had they had more than seven minutes each in which to speak.
I noted with interest and some pleasure that only three noble Lords—the noble Lords, Lord Trafford
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and Lord Bauer, and the noble Earl, Lord Onslow—did not agree with the main thrust of the argument that I put forward in my opening address. I should like to thank the Minister for the great amount of detail he put into his reply. I shall read Hansard with interest because there was too much to take in at the one sitting. Nevertheless, his reply did not convince me that the main thrust of my arguments is without cause. It seems to me that he was saying that the social security system that we had before 1986 needed revision, amendment and simplification, and no one on this side of the House has ever argued otherwise. When the social security legislation of 1986 was before your Lordships' House, I remember saying that we accepted that the existing social insurance system needed revision and simplification.
Our arguments have been, and remain, that what has happened to the social security system since then has not resulted in simplification, but, as a number of noble Lords have said, there has been a lack of simplification in certain areas. One of the reasons why family credit has had a low take-up, apart from it being means tested and people not liking means-tested benefits, which I can well understand, is that one has to go through an incredible form-filling exercise before being in sight of receiving benefit. I am glad to learn that the Government intend to do everything that they can, even though that means spending £7 million, to try to persuade people to apply for family credit if they are entitled to it.
As regards the Budget, we are happy that there were some moves in the direction of the low paid. Our argument is that they were minimal. Judging from the way in which the Chancellor presented his Budget and from what was said on the government side about the economic revival and our economic achievements, resources exist to do a great deal more for the low paid than was done in the Budget, which was the thrust of some of our arguments this evening.
As to the arguments on wages councils, I agree with what was said by the noble Lord, Lord Rochester. I say to the noble Lord, Lord Trafford, that there is no evidence of which I am aware, or of which anyone else is aware, to show that if we have a minimum wage or wages councils' minima the result is to decrease the number of jobs available. After all, wages councils have existed since the end of the war. They existed during the 1970s and as far as I am aware they did not have the effect of reducing the number of jobs available.
On child benefit, I remain unconvinced by the arguments advanced by the Minister. There is not much point in rehearsing those arguments again this evening. There is a philosophical gulf between the two sides of the House on the whole question of child benefit. The Opposition believe that child benefit should be uprated and that the Government have a moral obligation to uprate it, as I said in my opening address. It is a benefit which has a high take-up. In some poor households it is the only benefit that a mother can count on having. Since it replaced tax allowances anyway, the arguments that have been advanced about it being a benefit that helps the rich as well as the poor are not valid. The noble Earl, Lord Russell, asked whether it should be taxed. That

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is a point at which the Government might look. If it were up-rated and taxed, that would answer the arguments advanced by the Minister.
I am glad to learn that something is being done about widows' pensions. I shall again read Hansard to see precisely what is involved. I am glad, as I said in my opening address, that the Government intend to do something about the 16 to 17 year-olds. The question is whether it will be enough to remove the threat of homelessness from young people in that vulnerable group. Not everyone can be looked after in a family. It would be good if they could be. As we know, we live in an era when there are many broken homes; children may suffer from various kinds of abuse; and when the family home is just not available. There is therefore an obligation on society to look after those young people. I question whether what has so far been proposed will be adequate to do that.
The Minister was self-congratulatory about the social fund; but that does not tie in with information that I have received from a number of voluntary organisations acting in that area. The Child Poverty Action Group has undertaken a survey into how the social fund is operating. Other voluntary organisations have done the same. There are many cases of individuals who have suffered greatly. They were not allowed a loan even for essential items because they were not judged to have the resources to repay it. The replacement of the single payment system by loans from the social fund was not a progressive move. We should have stuck with the single payment arrangements.
That is about as much as we have time for this evening. I should like to repeat my thanks to everyone who participated in the debate. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Victoria and Albert Museum
8 p.m.
Lord Annan Lord Annan rose to ask Her Majesty's Government what information they have received from the trustees of the Victoria and Albert Museum about the recent reorganisation of responsibilities in the museum and about the treatment of the curatorial staff who have been made redundant.
The noble Lord said: My Lords, I am asking the Government the Question standing in my name on the Order Paper because the recent events at the Victoria and Albert Museum are of concern to our national museums and galleries here and in Scotland.
The present imbroglio at the Victoria and Albert has its origins in a visit by the National Audit Office investigators. It is a singular irony that the staff poured out their hearts to them, spoke of their frustrations, the backlog of work undone, etc. Their reward was to be pilloried before the Public Accounts Committee and the director abused by those who picked on a woman when they received short change from the robust Yorkshireman, Sir David Wilson, who was defending the British Museum.
I have very considerable sympathy for Mrs. Esteve-Coll after some of the intemperate attacks that have been made upon her. I have sympathy for her because I believe that the deficiencies that she faces are due to the failure of the Government to face those responsibilities. Public interest in the arts has grown enormously. The staff at our museums have not grown to meet that interest. They are overwhelmed by demand and backlogs of work. Will the Minister confirm that the number of curatorial staff at the Victoria and Albert is exactly what it was 20 years ago, with the exception of one secretary and one word processor? Does the Minister share my alarm at hearing the director say that she intends to reduce that number?
However, there is a far more serious charge for the Government to face. The deputy chairman of the trustees, Sir Michael Butler, tells us that the finances of the Victoria and Albert have been cut each year for the past 13 years by 3 per cent. Now the Government are not honouring the pay awards to which they are a party. The OAL approves a pay award; but when the grant is fixed, it does not meet the terms on which increases of salaries and wages have been made. As a result, 83 per cent. of the V&A annual grant now goes on salaries and wages. At the British Museum I believe it is nearer 90 per cent. That means less and less money for those running the museum. By 1992, so I understand, the V&A will be in deficit unless it gets rid of staff. Is that one reason why eight curatorial staff have been asked to take voluntary retirement?
I call this policy dishonest and dishonourable. I can guess what the Minister will reply. She will say that the Government are spending millions on the roofs of the V&A, "The trustees have the remedy in their own hands. Let them raise money. Let them charge a realistic compulsory entry charge". So to raise money we have Sotheby's showing off their auction wares, and Elton John's bric-à-brac collection being exhibited. We have Burberrys using prime exhibition space to advertise, while Harrods display 13 paintings of the V&A to tout for sales of their reproduction Victorian furniture.
Would it not be more honest of the Government to hold a meeting of the trustees and directors of all the national museums and galleries and tell them that they expect them all to impose an entry charge of, whatever it might be, £3 or £5, according to the museum or gallery? The Government could work out with them ways of making the charge less onerous. There could be one free day a week. There could be a season ticket for friends of each of the institutions so that friends can drop in without charge, and so on.
May we have some leadership from the Ministers? After all, the Prime Minister is not short of that quality. Or will the Government continue, like the priest and the Levite, to pass by on the other side? Can the Government at any rate give leadership on one point? The continual pressure on museums to raise money by selling off their possessions is disgraceful. Is the Tate to sell a Van Gogh to mend its leaking roofs? The Minister for the Arts could do something to restore confidence by saying outright that he is not in favour of museums and galleries selling their acquisitions.
I must add that the provincial museums are particularly alarmed by the financial crisis at the V&A. They suffered a blow in 1978 when Sir Roy Strong axed the circulation service on grounds of economy. Now Mr. Graham Whiffen is reported as saying that the museum is considering asking other institutions to pay for receiving advice—institutions such as the provincial museums, the National Trust, the National Heritage Fund, the Museums and Galleries Commission and the reviewing committee. I think that would be nothing short of a scandal. These bodies are charities and the reviewing committee is a government agency. If they are to be charged, every institution will charge and the Government will pay a pretty penny. What about the public? Is it envisaged that the opinions that the V&A supply to those asking for advice will be calculated by the hour? Or will they be calculated pro rata per valuation?
Let me now turn to the dispute itself. I do not believe that the dispute at the V&A is simply a matter of a reforming director being opposed by recalcitrant staff or of a tyrannical director riding roughshod over experts. But I do believe that the change in policy that the director wishes to implement has not been handled all that well. For some time, so I understand, the relations between the management and the curatorial staff have been rather less good than they should be. To remedy such matters, Sir Roy Strong set up a committee of keepers and senior staff. They could agree on nothing.
Accordingly, the new director set up another committee in May of last year under Mr. Murdoch, the keeper of paintings and drawings. This committee was far more representative of the staff as a whole. It came up with five alternative plans. These schemes were discussed at a weekend conference held in the country. Great support was shown for the director and there was great willingness by most staff to implement reforms. There was no further consultation with staff. On 26th January the director put her plan for reform to the trustees.
That was a radical plan and would certainly have aroused opposition from some of the staff. It was not circulated to the trustees with other papers for the meeting. It was tabled at the meeting. One or two trustees protested that they must have time to study it. Some say they were given half an hour, others a quarter of an hour to do so. No one knows better than myself how difficult it is for any academic or artistic institution to obtain agreement on change, particularly radical change. The director may have reasoned that if she put the plan first to the staff, some of them would have lobbied trustees to oppose it or even started a press campaign to oppose it.
Whether or not the plan should first have been put to the staff of the V&A, surely the trustees should not have been asked to take a decision of such magnitude without time to consider likely reactions to the plan, and whether it needed in any way to be modified. Were the trustees told that the plan was likely to be criticised inside and outside the museum? The more drastic the reconstruction of course the more important it was for them to have ample time
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to consider it. Anyway, the trustees approved the plan. Eight days later eight senior curatorial staff were each told in a brief interview that they were being offered early retirement at once or they were liable to be made redundant.
I think there are two issues here. The trustees were not informed that senior staff, some of whom had served the museum for some 20 to 30 years, were to be sacked. The only reference to the future of the staff in the memorandum that was tabled ran as follows:
"The implications of the foregoing for individuals will be discussed with each member of the curatorial staff so that they can be placed successfully in the new developing structure or otherwise accommodated".
It may be that in industry the words "otherwise accommodated" would make it crystal clear to directors that staff were to be sacked. But such periphrastic language should not be used to a board of trustees, some of whom expect to be addressed in plain English.
The day after the meeting of the trustees, the director held a staff meeting. I have the text of the director's speech here. Staff say they were led to understand that no redundancies were imminent. Should staff of such seniority have been treated in that way? It will be said that they obtained more generous terms than if they had been made redundant. The terms were not generous, however. The staff received what was legally owing to them. The money was not obtained by a special indulgence on the part of the Treasury. Perhaps the Minister will confirm that the Treasury exercised its right of virement and obtained unspent sums that were earmarked for the repair of the V&A building. Those sums were transferred in order to meet the staffs early retirement payments; in other words money badly needed to repair the crumbling fabric of the building was diverted for this purpose. What is more, the cost of the redundancies is far more than £300,000. I understand it may amount to as much as £1.75 million when all the staff have retired.
It may be said in defence of this action that many of the staff in different ways were obstructive or quirky. Keepers very often are quirky. One whose work was beyond reproach had the reputation within the museum of opposing any change of any kind as a matter of principle. Another was renowned for retreating into his lair to write a book. There are many ways of dealing with difficult staff—establishing good personal relations is one. However, if that is impossible, as it sometimes is in museums, the redeployment of duties is another way.
The headship of departments can, and perhaps should, revolve. As Mr. Macmillan used to say when reshuffling his Cabinet, "We all of us have to spend some time in the pavilion". If Mr. Lightbown, Mr. Mallet or Miss Levey had been invited to exchange duties with other members of the staff, they may have accepted. Why lose their expertise? It has never been alleged that any of the eight people involved were poor scholars. Will the Minister tell us whether the eight were sacked to allay the fears that they would not co-operate? Why not first see whether they would? They may well have co-operated if the noble Lord, Lord Armstrong of Ilminster, had used his great persuasive powers.
I think there is a question of principle here. In business, so we are told, high executives are called in at 10.30 in the morning and told they must leave the building by 12.30. Such executives are of course paid very large salaries. The larger one's salary, the larger is one's golden handshake and the more ignominious one's exit. But curators are not paid large salaries. They belong to the learned professions and they are paid even less than dons. That is all the more reason to treat them decently.
Hundreds of dons have had to take early retirement in recent years. But they were given time to adjust, to appeal and to work out their entitlements. Hardly a story has emerged from the universities of vulgar and brutal treatment. Many people consider that the staff of the Victoria and Albert were treated, in this respect, vulgarly and brutally.
There are some matters concerning the trustees that I must raise with the Minister. Does she agee that when a major change of this kind is made to improve efficiency new posts should be advertised? Why was it then that, despite a promise made to the trustees that that would be the case, the major post of administrative assistant director was not advertised but Mr. Close was appointed from within the museum? It may well be that he would in the end have been appointed as the person best fitted for the job. I do not dispute that, but why not test the field?
The trustees agreed to spend £250,000 on an advertising campaign to attract visitors. Whether that was wise when a major reconstruction was envisaged—we know that such reconstructions always cost money—is another matter. But, whatever the cost, was it right that the contract should have gone to Saatchi and Saatchi when Mr. Maurice Saatchi is a trustee of the gallery? I must say at once that I am in no way making a personal attack on Mr. Saatchi. Everyone knows what fine patrons of the arts he and his brother are and how public spirited they are in opening to the public their gallery in West Hampstead. Incidentally, it is one of the best designed galleries in London. It is a real gem. But trustees give their services free. Those services are very valuable. Trustees do not become trustees for profit. I dare say that the profit here was nil or negligible and that all that Mr. Saatchi wanted was the prestige that his firm would enjoy by being associated with trying to raise the prestige of the V&A. However I must ask the Minister whether her right honourable friend will inform the chairmen of all boards of trustees that none of their colleagues should benefit financially from their position.
I shall leave it to others to enlarge on the wisdom or otherwise of the director's plan of reform. I do not wish to be dogmatic about the management structure of a museum of which I have no personal knowledge. I do not think curators are infallible judges of every aspect of their work. However, no praise could be too high for the connoisseurship of the curators at the National Gallery. But the trustees there did not think that some of those curators were good judges when it came to redecorating the rooms in which they displayed their masterpieces. In the end the trustees had to rule that no scheme of redecoration could go ahead without their approval.
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However, the trustees did not consider degrading the curators. There are surely a number of ways of skinning a cat.
The present difficulties which the V&A faces today seem to have arisen from bad management rather than bad curators. The near miss recently on the Gloucester candlestick occurred because there was no curator present. Is it true, as is alleged, that for eight years in the late 1970s virtually no maintenance work was carried out? Sir Michael Butler tries to persuade us that curators must have the predominant say, as he calls it, about which objects should be displayed in each gallery and in each case, and that they should have the predominant say in the labelling, and should continue to be responsible for recommendations on acquisitions. He says they should continue to be responsible for disposals, for the choice of objects for exhibition, for advice on loans, for export licences and other matters. That is of course their range of responsibilities at the present time.
I am astonished that it is proposed that if that is the case we can make do with fewer curators. Surely what is needed is what Professor Michael Jaffe, the director of the Fitzwilliam Museum in Cambridge, has been urging for years; namely, the establishment of a training course in management for curators of national and of provincial museums.
I am not asking the Government to request the trustees to reconsider the matter. What is done is done, as Lady Macbeth said, although I sincerely hope the director's nights will not be as disturbed as those of that misguided lady. Running a museum is more a matter of man-management than financial management. So let me end on a lighter note. Anyone who knows Greece will remember that in that land of gestures there are two in particular which are often employed. There is "poko" which is used when discussing politics, and there is "stroko" which is used when discussing love or money. I think a great deal more "stroko" needs to be used in the forthcoming months at the museum. Stroking one's subordinates is sometimes as necessary in restoring morale as exhortation.
I have another remedy. The Brigade of Guards is famous for its discipline. It is also famous for the way in which it looks after its men and trains its officers in man-management. I rather doubt whether those who run museums and galleries would be accepted for attachment to a battalion of the Guards, but perhaps the noble Viscount, Lord Whitelaw, and those former guardsmen he used to select to second the loyal Address could be induced to tell the director and administrative staff of the V&A some of the secrets of getting the best out of those who work under them.
8.20 p.m.
Lord Carrington: My Lords, your Lordships are lucky because we have speaking in this debate the noble Lord, Lord Armstrong, who will be able to answer some of the questions which have been raised.
I agreed with much of what the noble Lord, Lord Annan, said at the beginning of his speech. I

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intervene in the debate only briefly because I was for five years the chairman of the Trustees of the Victoria and Albert Museum. Indeed, I was the first chairman of the trustees because until 1984 the museum was administered directly by the Government. It was a great privilege to serve that museum. It is one of the world's great museums, and I dare to say that of its kind it is the greatest. I enjoyed myself and I enjoyed the privilege of knowing those who worked in the museum. I think that I had a happy relationship with them. I had, and have, a respect and admiration for the work they do in extremely difficult circumstances.
When I arrived at the museum I discovered, first, that successive governments—and here I agree with the noble Lord, Lord Annan—had shamefully underfunded the museums and this museum in particular. In regard to capital expenditure the situation was no less than a disgrace. The roof leaked, the central heating radiators burst, the drainage did not work. I remember that a couple of years after I went there we worked out that it would take £30 million to put the fabric of the museum right. You cannot attract private sponsorship for that kind of work.
The noble Lord, Lord Annan, asked why £300,000 was under spent and not used on the fabric of the museum. He can have had little to do with the PSA if he does not know the reason for that.
The Government must be responsible for the fabric of museums. There is no way in which one can attract private sponsorship for the Arthur Robinson drainage system or the John Smith central heating boiler. That is the Government's job. I think that the present Minister for the Arts has done everything that he can in rather difficult circumstances to try to provide more capital expenditure for the museums.
Secondly I discovered that that underfunding extended to the running costs of the museum. No doubt my noble friend behind me will bear me out, although perhaps in a different context, that there was a favourite Treasury device. It was to tell the museums to settle their budgets on the basis of 2 per cent. inflation, then to settle civil service salaries and wages at 5 per cent. or 6 per cent. and, because the museums were tied to government rates, to expect the museums to absorb the difference. In the museums where, as the noble Lord said, 80 per cent. of the costs relate to people, that meant that it was a nightmare trying to make both ends meet. Sometimes one even had to worry about pen and paper.
All that made administration very difficult. Curators and the then director himself had and have an increasingly heavy and varied load. They had to master a host of other activities remote from the sort of work that curators had to do in the old days when their work was connected primarily with scholarship. They had to do so often with no help at all. They had to write their letters in longhand because there were no secretaries, and they were and are hopelessly overworked.
Let us face it, that does not lead to efficient administration. There was, and is, considerable
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criticism of the administration in the great national museums, and not least in the V&A. I think that some of it was wholly justified. There was criticism about the lack of inventories, the delay in cataloging and the backlog of conservation. All that was absolutely fair. However, a very great deal of that inefficiency was due to a lack of money, but not all of it.
It had something to do with the way in which the museum was organised and the enormous workload which was placed on the curators as a result. Towards the end of my time at the museum I came to the conclusion that a radical reorganisation was necessary. I believe that the director was absolutely right to rearrange the responsibilities and the chart of administration in the museum. I do not believe that that reflects upon the individuals concerned because I do not believe that it was their fault. However, the unhappy fact remains that reorganisations of that kind mean redundancies. I know that nobody is more sorry than the trustees and the director that that should be so.
I should like to make one last point. I know that the director is determined that the scholarship upon which the reputation of the Victoria and Albert Museum to a great extent depends should be maintained. I know too that she will monitor carefully the progress and consequences of her reorganisation. When we appointed Mrs. Esteve-Coll as director we thought unanimously, and speaking for myself I still do, that she was the outstanding candidate—capable, experienced and sensible. I think that those who worked in the Victoria and Albert Museum will know what a remarkable job she did in reshaping the National Art Library in that museum.
I am greatly dismayed, and frankly sickened, by the personal abuse and attacks to which she has been subjected, not least by one of her expatriate predecessors who has never met her and who wrote a letter with what can only be described as a pen dipped in vinegar. I cannot say, and nobody can say with certainty, that the proposals that the director and trustees have put forward are right. Equally, nobody can say with certainty that they are wrong. What I can say with certainty is that those who indulge in that kind of ad hominem argument rather than addressing the issues do themselves and their cause no good.
8.30 p.m.
Lord Hutchinson of Lullington: My Lords, it is an honour to follow the noble Lord, Lord Carrington. I know that we are all very pleased to see him back here participating in debates.
The noble Lord, Lord Annan, is entirely justified in bringing this matter to the attention of the House. He is uniquely equipped to do so with his outstanding academic career, not only as a scholar, but as an experienced administrator, and with his distinguished work as chairman of the National Gallery. After all, as the noble Lord, Lord Carrington, said, we are debating the situation of the greatest museum of decorative and fine art and design in the world. The V&A is part of the nation's

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patrimony and, along with other national museums, reflects, as the Museums and Galleries Commission put it:
"the nation's place in the history of civilisation".
The commission also said in its recent report that a museum's success must rest on more than popularity. In other words, it reasserts the key importance of scholarship as a priority. It is a view which was echoed the other day in The Times by the noble Lord, Lord Goodman, who wrote:
"Destroy the fruits of years of scholarship and there is nothing left to popularise".
There are two matters to address here. As the noble Lord, Lord Annan, asked: are the director's proposals worthy of support, and was the manner of their introduction appropriate? In my view, the second question can be answered only with a resounding and unequivocal no. The crisis at the V&A reflects so much of what is wrong with government policy towards the arts, as the noble Lord pointed out. First, there is the financial situation and the financial crisis which lies behind the problem that has arisen. Eighty-three per cent. of the grant provided to that museum is now absorbed in wages and salaries. In 1991–92, 100 per cent. of the grant will be thus absorbed: what a way to finance one of the greatest museums of the world!
The museum is an institution which is beginning to leak and disintegrate and which cries out for the Government's attention. The Government are prepared to produce £100 million to acquire a hugely publicised collection of paintings from a German millionaire, yet they cannot even find the amount of money needed—as the noble Lord, Lord Carrington, pointed out—to save one of the greatest museums in the world. There is glory, glamour and status in Thyssen; there is no less than the preservation of our heritage at the V&A.
Secondly, there is the issue of the appointment of trustees. In 1984 we debated the changeover of the V&A to trustee status. The noble Viscount, Lord Eccles, and I held different views in that debate about the role of the trustees. Since then, on a number of occasions in this House I have referred to the dangers of the Government's policy of appointing to great museums only trustees who are prepared to further the Thatcher philosophy—business men and women with an ability to make and raise money, who are willing to make museums part of the leisure industry of the country, to give priority to marketing, generation of income and the pursuit of the wealthy and to further the glitter of sponsorship and the ritzy presentation of the contents. All that is irrespective of whether those persons hold any qualifications whatever for tending, protecting and nurturing what has made our museums the envy of the world.
In that situation, did the trustees of the V&A—the great majority of whom are in business—familiarise themselves with the drastic structural reforms? Did they understand them? Did they digest them? Did they inquire about the cost of them? Did they measure the effect upon the staff, for whom, after all, they are responsible? Were they satisfied that the plans had been properly discussed with the staff? Did they know what had been the role of the Office
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of Arts and Libraries, Mr. Luce and Mr. Richard Wilding in the formulation of the reforms before they were presented to the trustees? Had any of them visited other institutions and talked to respected scholars and administrators in other great museums?
To be a trustee of a great museum it is not sufficient to attend seven or eight meetings a year and accept the honour of the post. Did the chairman—I am so glad that he is here to take part in the debate—point out to his colleagues the inevitable protests that would be received when it was found what those radical reforms involved? Those scholars, who have a worldwide reputation, were treated as a tycoon might treat redundant staff in a takeover bid.
We know certain facts. The noble Lord, Lord Annan, has pointed out that on that fatal 26th January those proposals were tabled and were on the table when the trustees came to sit down round it. The proposals would revolutionise that great museum and alter the whole basis upon which its reputation had been built up over the years. Anyone who has ever attended a committee meeting knows what the word "tabled" means. As the noble Lord said, two or three trustees protested and were granted a quarter of an hour to read the paper before the meeting proceeded with the business. In all seriousness, is that any way to deal with a matter of such huge importance?
In that paper, of which we all have a copy, there is not one single word about possible redundancies. Were the weasel words that were read out from paragraph 33 by the noble Lord a frank message to the trustees of what was afoot? In an interview given by the director to The Times three days later, there was not one word about any redundancies.
Within two weeks, the human heart of that museum had been torn out. Eight or nine men and women—scholars of incomparable knowledge, experience and repute—had gone from the museum. Their jobs had become redundant. Paragraph 5 of the director's apologia, a copy of which we all no doubt received last night in readiness for this debate and which I have in my hand, asks:
"Why was it necessary to make several senior curators redundant? No-one was made redundant. Certain individuals whose jobs disappear under the re-organisation were offered voluntary redundancy".
The document refers to "certain individuals". As I have said, the jobs of international scholars with an average period of 20 years' service in that museum disappeared. As we all know, they had 14 days in which to consider the ending of their careers. Were they to take the redundancy money offered to them? They were told that £300,000 was there but on 31st January it would no longer be there: "Your decision must be made in the next 14 days". There were no compulsory redundancies; no redundancies were made. Is that a frank account of what really happened when they together told the press that they left under protest?
That is the situation. Certain questions arise. I am sure that the noble Lord, Lord Armstrong, will enlighten us when he comes to speak. Why were there nine redundancies? Was it because 10 would have meant certain compulsory procedures applying

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in the museum under the trade union rules? Where did the £300,000 come from? Was it underspend on OAL or at the V&A—money which was vitally necessary for repairs? How much has this operation cost? Is the figure that the noble Lord gave of £1.75 million the amount which the taxpayer has to pay? I am sure that the Minister will inform us accurately.
We were told by the noble Earl, Lord Caithness, in our recent debate on the preservation of the heritage (at col. 1428 on 20th December in the Official Report):
"We are entering a new phase of entrepreneurial museum management",
and he spoke of,
"vigorous marketing in order to make … collections accessible to the public".
How true. We have already been told of Mr. Saatchi's efforts with the advertising campaign for the V&A as,
"an ace cafe with a museum attached".
Sir Terence Conran, a trustee, refurbished the cafe and has marketed, through his firm, reprints of the textiles held by the museum. We have heard of the Sotheby's exhibition of Elton John's possessions with a very profitable auction afterwards. The Sock Shop has recently had a most profitable exposure at the museum and so has Burberrys. Is this treatment of distinguished staff and these commercial activities examples of the new government policy?
Finally let me turn to the proposals. How best to organise the running of a great museum must normally be left to those who know about it. However, control of collections is to be vested in managers answerable to a registrar. Departments will merge. Ceramics will be absorbed with metalwork and sculpture and the keeper, the renowned John Mallet and his No. 2, have been swept away, and ceramics will become part of a mixed department. This looks to me as though scholars are now to become generalists. Curators will have lost their power base and will be outnumbered by the administration staff.
Curators at the V&A are not academics in the university sense. They are not wedded to the study of books and treaties in libraries. It is the development of connoisseurship—a term of art in this profession—to which they devote their working lives. It is the constant dialogue with objects—the handling, care, treatment and display of them—which enables the scholar to learn the genuine from the fake, to date and to authenticate. If managers are henceforth to be responsible for presentation, handling, storing, conserving, moving, lending and labelling, not one of those duties can be properly done without the expert advice of a curator. I wonder whether this director—three years at the museum, with a library background—fully understands the role of a curator and the apparent duplication involved in the separation of what is called housekeeping from scholarship.
Does it concern the chairman that museums from all over the world have expressed the view that the separation will destroy the reputation of the V&A? When I read the protest from Professor Gombrich,
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probably the most distinguished art historian alive, that,
"curators have earned no thanks for their patient labour in the search of truth",
and,
"do the new brooms know the damage they are preparing for the future?",
I ask myself whether the director is right.
Surely the reforms in the museum should have embraced and built on the assets that are already there. I hope that the doubts that I express will be resolved when we hear the contribution of the noble Lord, Lord Armstrong.
8.45 p.m.
Lord Kennet: My Lords, the Question has been raised with eloquence and learning by the noble Lord, Lord Annan, and answered in a way which to me was unexpected by the noble Lord, Lord Carrington, as an ex-chairman of the directors. It was raised again with fire and leas lung by my noble friend Lord Hutchinson. I shall not therefore go again over the matter of the sacked keepers. I use short and familiar words. But I shall concentrate on wider aspects and on one particular narrow one.
If one were Mrs. Thatcher it would have been a very good idea to start with the museums, as she did, with the National Heritage Act 1983. If one were determined to take a symbolic action to indicate to people the primacy in the view of the Government of profit and commerce over learning and education one could not have found a better way to do it. She therefore wrote the Act which was debated here. We did not succeed in improving it very much. It was put through against the background of continually falling government grants to museums. Its purpose was already quite clear. It was to enable—indeed to force—museums to seek private funding. It also gave the Prime Minister personally the power to appoint the boards of directors of certain museums including the Victoria and Albert. I know that one can chop the figures into three classes of persons, but she did this in a way which reinforced her original decision. It was clear that all those businessmen on the board were there to teach the former effete academics and connoisseurs how to make a healthy thing called money. The result has been as we have been told today.
I have one more point about the "ace caff". Of course Mr. Saatchi's slogan "ace caff with museum attached" is destined for immortality. It stands for so much that is done by the Government and will be done in the future no doubt. I note from Sir Michael Butler's article in The Times that there is to be created a new post under the new regime called assistant director (collections). I cannot think what it can mean but that the director's prime responsibility will be the caff, and the collections and their maintenance and study are moved one down and away from the director's desk on to that of an assistant director.
Before I knew this Question was being put down, I had put some Questions down for Written Answers. They were not due to be answered by today, but the noble Baroness, Lady Trumpington, with her

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customary courtesy, and even prestidigitation, has reached out her hand from her office in the Ministry of Agriculture, and I received the Answers from the Minister for the Arts this afternoon. She has performed a miracle. They are instructive. With the permission of the House, I shall read some of them. I asked:
"On what terms Sock Shop and Burberrys have been allowed to exhibit and advertise their goods in the galleries of the Victoria and Albert Museum, and on what terms national treasures in the care of that museum have been transferred as a sales adjunct to the custody of Harrods."
The Answer was:
"This is a matter for the director and trustees of the museum. I will ask the director to write to the noble Lord".
This is a matter that the House will wish to get to the bottom of.
As I do not often go to Harrods, and had not been to the V&A, I was alerted to this by an article in the Herald Tribune, an American newspaper. The article was written by an art history correspondent who was amazed to find that the Burberry coat that he was wearing when he visited the V&A was the same as one in a glass case with a nice advertisement for Burberrys. A Guardian columnist a few weeks later recounted how she had bought a pair of tights at a Sock Shop in Farringdon Road and went to the V&A to write the intended piece about it and found the tights in a case with a nice advertisement for Sock Shop. This is a startling departure about which we should collect all the information we can.
My second Question was to ask:
"What guarantees Harrods have given of the care they will take of (a) the Waterloo Vase, (b) the Duke of Wellington's Berlin Service and (c) pictures, including at least one by John Crome, all from the Victoria and Albert Museum, while they are in Harrods' Knightsbridge shop".
The Answer was:
"This is a matter for the director and trustees of the museum. I will ask the director to write to the noble Lord".
Thirdly, I asked:
"Whether the present commercial use of gallery space at the Victoria and Albert Museum and of objects in its care outside the museum had been discussed with the expert curators who have recently been required to take early retirement".
Here we are a little nearer to the crux of the matter. The answer was:
"This is a matter for the director and trustees of the museum. I will ask the director to write to the noble Lord".
My fourth Question was luckier. I asked:
"Whether all objects in the care of the Victoria and Albert Museum are at present on show in its galleries".
My reason for doing that was fairly obvious. Here the Government were voluble in their explanations:
"As with all national collections, it is not possible for the Victoria and Albert Museum to display all the objects in the collections at the same time. Objects in reserve collections are made available regularly to scholars and members of the public on request".
The next Question was to ask:
"Whether the … trustees and/or director of the Victoria and Albert Museum have any authority to dispose of objects in the care of the museum".
The answer is of course that they have, and that authority was given by the Act of 1983.
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The Answer referred to limited powers, but I cannot see any way in which those powers could impose any limitation on a museum selling anything. It depends who are the trustees to declare what kind of object it is.
Lastly, I asked from what accounts the money was being taken to secure the early retirement of the expert curators. Here I was given a voluble answer—too voluble to read to the House. And interesting indeed it was. The Government clearly regard that as their own responsibility. The Government permitted that money to be taken from the building account, perhaps because of a shortfall in expenditure. But as the noble Lord, Lord Carrington, said, who does not expect shortfalls in expenditure in a given year on building accounts from the PSA? Money was taken from that building account and used to buy out the curators. I think that is the correct expression. They had to accept that kind of money in comparison with the salaries that they were getting and could expect later.
Lastly, on the curators, Sir Michael Butler's article assured the reader that the curators under the new regime would be allowed to take objects into their own offices to compare with other objects. I believe that gives what must be the tone of the board of trustees better than any other quote I have read. Curators will be allowed the great privilege of taking items out of cases to look at them, as they always have, in privacy if their work requires it. That at least is guaranteed.
I submit that the overall picture is that the Government are determined to commercialise the museums. In order to commercialise the Victoria and Albert, which they chose to do first, they found it necessary to get rid of the world famous corps of keepers who were there who either did object to or would have objected to it. I was given no answer to that question. I look forward to receiving one from the director of the museum. It was found necessary to get rid of those people. The power to sell is there. I have little doubt that it will be used and used increasingly because I see no sign whatever of the Government being prepared to take up once again the ancient and honourable role, first of the kings and then of democratically-elected governments, of maintaining collections of artefacts for the education of and study by the people, and as a means of encouraging young artisans, artificers and artists, to enter into the minds and hands of those in the past who made those artefacts. That is what it is for, and it is clear to me that that purpose is being and has been and will be abandoned by the present Government.
Nevertheless, the point of the whole debate today is to listen to what account the noble Lord, Lord Armstrong, gives us. I am glad of, and compliment him on, his choice of being last in the debate so that he can answer as many points as possible. We shall have much to learn from that.
8.56 p.m.
Viscount Eccles: My Lords, so far in the debate there has been much talk about under-funding. I agree entirely with that. I know from experience that without more money, one cannot establish the facilities needed for a growing public, but that is not

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what I want to speak about tonight. There is another aspect to the difficulties in the Victoria and Albert. When our national museums were founded 100 or more years ago, for whom and by whom were they to be managed? The British Museum established the pattern. The trustees instructed their first director not to admit more than six members of the public on any one day. They engaged scholarly curators to build and look after the collections for the benefit of a small circle of connoisseurs.
That system produced splendid results. Naturally enough as time passed it attracted a wider and wider public. Then the trustees had to begin to think about providing facilities very different from those needed for research. The conflict between research and administration took shape and we still have it today.
All my life I have found curators—many of them my very good friends—frank and honest about their disdain for the general public. There is no reason to be surprised or indignant about that attitude. Visitors can be an awful nuisance. They waste the time of professional staff, ask silly questions, crowd the galleries to a point where the serious student cannot examine the objects as he should.
When I was considering the introduction of museum charges I asked the late Lord Clark whether he would give me his support. He said, "Yes, I will, but on one condition: you must charge children double". He was perfectly serious. He had often been maddened by boys playing cops and robbers round the exhibition cases. He said that he had once tripped over a little girl lying on her stomach drawing a perfectly hideous picture of an Egyptian mummy.
There exists a real problem: how to reconcile with the rising tide of visitors the days without interruption which are needed by the scholars. That will never be easy to achieve, especially when there is insufficient funding to strike a generous balance between those two conflicting objectives.
It is just luck—it is a bonus one cannot count on—if a good scholar is also a good administrator. Even the best curators cannot do everything. When in addition to the care and knowledge of their collections other duties become a public concern—such as catering for the unsophisticated constituents of Members of Parliament, teaching art in the schools, the importance of tourism—unless enough attention is paid within the museum to good housekeeping and to the new external services, trouble is bound to arise.
Could the trouble at the Victoria and Albert Museum have been anticipated and dealt with without what appears to be a dictatorial break with the past which has led to sharp criticism from my noble friend Lord Annan and other important people in the world of the arts? I believe that it could and I ought to try to explain to your Lordships how it might have been achieved.
As the noble Lord, Lord Hutchinson, has said, in November 1982 your Lordships debated the Heritage Bill. My noble friends Lord Perth and Lord Gibson—I am glad that they are to speak, because they do so with great experience of museums—joined with me in proposing an amendment which
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would have brought the director of the Victoria and Albert Museum and some of his senior colleagues round the board table with the nominated trustees. There they would have discussed together such managerial changes as are being made today. Our amendment failed and it is important to stress why it did so. Too many of your Lordships were content with the old-fashioned structure where a hard and fast line is drawn between the responsibilities of the director to manage and the responsibilities of the trustees to observe and advise.
Mandarins in the art world, such as Lord Clark and Sir John Pope-Hennessy, always held that the trustees should know what the director is doing only after he has done it. There have been six uneasy years since the Bill became law. But, had the amendment been accepted and had there been on the statute book a system for constant discussions between senior executive officers and the trustees, I can hardly believe that the changes now faced in the museum would have arisen in what has sometimes been considered to be a sharp way.
I turn to deal with changes in the staff. I do not have the pleasure of knowing Mrs. Esteve-Coll. I know of her reputation, which is excellent, and, in principle, I entirely support the changes she is making. Many museums have already made imaginative adjustments to the changing priorities in our society. They realise that the way in which they conserve, display and explain their collections counts for much in the degree of esteem in which our national culture is held.
When we talk about "national" culture, what do we mean? I do not believe that we all mean the same thing. In this country we have always been good at agriculture and horticulture but we have not made much of culture without qualification. I grew up believing that culture was slightly foreign, not really English, and that it was attainable by only a limited, superior minority of which I hoped one day to be a member. But, after some experience in the maintained schools, after the friendship of a number of artists and two or three years as Minister for the Arts, I came to the conclusion that in order to deserve the epithet "national", culture must not only start at the top and filter down but must spread outwards and upwards from the bottom. If one looks at young people in the streets today and at their clothes one can see that our culture is spreading from the bottom.
I thought that the health of the national culture could be measured by how far the barriers which kept art a luxury were being removed. To obtain the best from our museums, many more ladders of experience were needed which were open to anyone to climb as far as his or her capabilities would allow. Obviously the Victoria and Albert Museum has a huge potential for erecting such ladders of experience for anyone who can be persuaded to take an interest in design and decoration.
Was not that the original objective of the Prince Consort? I believe that it was, but the museum had become much more intellectual than His Royal Highness would have approved of. Provided that the resources are adequate—and I am ready to admit that they are not—the Prince's objective can be

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achieved today not at the expense of research but essentially in co-operation with it.
As I see it, that is what my noble friend Lord Armstrong of Ilminster and Mrs. Esteve-Coll want to do. And they cannot do it unless they redeploy the staff in order to get a better balance between research and good housekeeping. They are going to extend the base of British culture and at the same time the work of the experts will be protected. It is absurd to say that the work of the experts is being destroyed. On the contrary, they are now going to have much more time to themselves, and they can write their books. I remember very well at the British Museum a very distinguished man coming to ask: "Can I write a life of Proust?" I asked him, "How much time will it take?" and he said, "Well, nearly all my time." I thought he would do it very well and so I told him to get on with it.
You could not say that in the Victoria and Albert as it is now. You will be able to after this reorganisation. I think your Lordships should really support the trustees: they are moving into the world in which we live and the director has obviously got some good ideas. I personally wish them the very best of success.
9.10 p.m.
Lord Gibson: My Lords, the noble Lord, Lord Annan, reminded us in his admirable speech how this row began. I think it is also important to remember the background against which it has developed: a background which has been there for several years. The background is that throughout the world of academic scholarship there is a general apprehension that a utilitarian view of the value of places of learning is gaining ground in society generally, and in government in particular ——
Viscount Eccles: My Lords, I do not think it is.
Lord Gibson: My Lords, it is widely felt among scholars both within and without universities that studies which do not lead to visible material progress are not as respected as once they were and no longer receive the priority that once they did. Whether these fears are justified or not is not a subject for debate tonight. Their relevance this evening is simply that they exist and in the V&A they are largely the consequence of inadequate public funding in recent years for the basic purposes of the museum. This shortfall and its consequences have been emphasised by the Museums and Galleries Commission in its report on our national museums.
While it is acceptable that trustees of a museum should be encouraged to look to the private sector for some desirable expansion and development, it is quite wrong—this has been said already this evening and it cannot be over-emphasised—that they should be expected to find funds for basic activities: that is to say, for preserving the fabric of the building, for displaying, securing, conserving and, where appropriate, adding to the collections in their care as well as using them for education and scholarship. It is the inadequate funding which has led scholars and curators to fear that just as pure research in universities is being, as they see it, downgraded, so the basic purposes of the museum may be betrayed
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because of the need for it to gear itself to purposes for which funds can more easily be found from the private sector.
The new chairman, the noble Lord, Lord Armstrong, and the new director, Mrs. Esteve-Coll, undoubtedly found the museum in a serious plight, as both the MGC's report and the deep concern of the Public Accounts Committee testify. They deserve our sympathy in their determination to tackle the problems, but we are entitled to ask questions about their chosen solution. It is not easy for outsiders to judge whether the proposed structure is right or wrong. But we are permitted to wonder whether the abolition of the status of the scholar-curator—a breed which has made the museum so internationally admired—is really the only way to set about reform and whether modification, rather than root and branch change, might not have secured the objective; and, above all, whether change in less haste—change over a year or two—might not have secured better treatment for those most affected by it. If the haste was dictated by the methods of the Treasury, and it seems to have been, then it will not be the first time that our system of public accounting control has proved expensive in all but the shortest terms.
What has happened at the V&A of course is that the enormous increase in public interest in the museum and the demands upon it have far outstripped any increases in public funding. Consequently there has been a downward pressure on staff numbers in relation to the volume of work required of them, and staff have had to spend extra time—much more than before—on tasks of management, evidently with not great success at all times.
It is right that management, marketing and so on should be improved, and that the trustees should have a duty to promote public understanding and enjoyment. But, as the MGC says,
"Museums must rest on more than popularity",
and, as it adds by implication, it is the duty of government to ensure that they do, or to provide at least the wherewithal to ensure that they do. Popularity must not be at the expense of connoisseurship, scholarship and research, which, in view of present public interest in and demands on the museum, needs all the more to be expressed as a primary purpose of the museum. It has been argued that the changes in structure recently adopted by the trustees are calculated to achieve precisely that objective. By relieving curators of administrative tasks it is said that they will be released to find more time for connoisseurship and scholarship.
However, what has caused so many doubts to be raised by the proposed changes, quite apart from the premature loss—if that is not a weasel way of describing it—of so many distinguished people is the statement in the director's paper that there must be a clear-cut separation between scholarship and housekeeping. The paper goes on to define housekeeping as receiving, documenting, moving, storing and conserving. This has been interpreted by many to mean that unqualified people will be handling the objects for which the expert scholars will no longer be responsible. I do not believe for a

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moment that that is the case and that they will be unqualified to receive or document. That cannot be the intention. There has been a very great deal of ill-informed comment about this and some disgraceful personal attacks on the director. What is seriously at issue is where responsibility shall lie, and that issue is really worth discussing.
Nearly 20 years ago in a very different world from today I was chairman of the Victoria and Albert's advisory council. This gives me no qualification whatever to talk in detail about the organisation of the museum and of the staff. Our status as a council was not comparable with that of the disestablished body of trustees that exists today. Nevertheless reflecting on the V&A as I knew it then, I ask myself certain questions. Can it be right to divorce the experts from responsibility for the objects that they understand so much better than anyone else? Who will be responsible for a decision to loan an object or to move it—not who will advise on such points but who will actually be responsible for the decision? I think that it probably ought to be the person who best understands the object, and is that not the scholar curator?
In a sense the proposals separating the expertise and the administration have a very familiar ring to someone who has spent most of his life in business. The practice of having experts on tap but not on top is a good old business principle. But a museum that is largely devoted not to design but to the fine as well as the decorative arts is not a business and it seems to me must be scholar-based or connoisseur-based, whatever the administrative system devised to support the scholar curators. However, it is not for in experts like me to prescribe a form of organisation for a great museum.
I have only one point that I want to urge. Given the present situation, confidence will best be restored by the nature and quality of the senior appointments that have yet to be made. If the new post of assistant director (collections), is filled by a man or woman of the highest academic reputation who is also a good administrator, a good leader and motivator of people and a powerful enough personality to ensure that the number of curators responsible to him or her is really sufficient for the basic purposes of the museum, as the GMC describe them, if such a person can be found, then those critics who fear for the future may be confounded. Likewise the two new posts below that of assistant director (collections)—the head of research and the registrar of collections —must be filled by people who totally command the respect of the scholars within and without the museum. Moreover, if there is movement of staff between housekeeping and research that too will help.
We have been assured by one trustee in a letter to the press that the draft job descriptions for these posts provide convincing assurance that the conditions for scholarship will substantially be improved by the new arrangements. Unfortunately it is not just conditions for scholarship about which people are worried. They are also worried that scholar curators may lose their pre-eminent responsibility for making decisions about the objects in the
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care of the museum. It must be up to the new assistant director (collections) to see not only that the housekeeping is greatly improved but that the museum values which the best keepers have so brilliantly upheld for many years continue to excite the admiration of the civilised world.
9.20 p.m.
Lord Blake: My Lords, I shall be extremely brief, as is appropriate at this stage of the evening. I cannot pretend to be an expert on museum matters in any way. My only claim to speak at all is that I was a trustee of the British Museum for 10 years. I retired last September, or I should not have dared to speak tonight. I might have been in a somewhat invidious position had I still been on the board.
I want to make only one point, which is quite enough at this hour, and I shall make it briefly. Reorganisation of the Victoria and Albert Museum seems to be based on the assumption that research and administration have to be separated. I regard that as totally wrong, in spite of what my noble friend Lord Eccles said. Of course, there are curators or keepers (according to the museum) who may be bad administrators. They may also be very irritating and awkward people. That is perfectly true. I am glad to say from my experience of the British Museum that I did not encounter awkward and difficult people, but that may have been luck.
I do not believe that curators or keepers need be bad administrators. The House should take note of what the noble Lord, Lord Annan, said about the possibility of such people being given some kind of training in administration before they take up their posts. Research and administration need not exist in separate compartments. The academic world—the university world—with which I am much more familiar than the museum world, offers many examples in which there are no such dichotomy. I suppose a classic case is the college over which the noble Lord, Lord Annan,presided—King's College, Cambridge—where the late Lord Keynes contrived to be a brilliant administrator and financier. He greatly augmented the wealth of the college and wrote books of immense learning and great value during that time. The two qualities are not incompatible.
I cannot believe that it is right to base the reorganisation of the Victoria and Albert Museum on the assumption, as it seems to be, that administration and scholarship should be separated in some way. If I may dare to say so, in my experience, at the British Museum they were not separated and they have not yet been separated. The place has not collapsed and there has been no great disorder or difficulty.
I regret to say that I am unhappy about these proposals for the Victoria and Albert Museum. I hope that the noble Lord, Lord Armstrong of Ilminster, will be able to allay those doubts. I greatly look forward to his speech and also to that of my noble friend Lady Trumpington. I will say no more except that I am glad the noble Lord, Lord Annan, raised this Question. I am sure that there are in most of your Lordships' minds many doubts which will need to be allayed when the noble Lord, Lord Armstrong of Ilminster, speaks.
9.25 p.m.
Lord Goodman: My Lords, I wish to associate myself with the congratulations to the noble Lord, Lord Annan, for having raised this matter. I also feel that the House can feel complacent and happy that it has found time to discuss something of great national interest. It is not really a matter that admits of party division. I have heard nothing here this evening that really addresses the matter that occurs to me as the major subject of complaint: that is, the nine individuals who have been disgracefully treated. That appears to be the matter to which we should address ourselves.
I have not heard a word from anyone. Possibly the most discreditable part of the proceedings is the way in which an attempted defence has been cooked up in order to say that the whole business is a division between the practical people who know how museums should be run and the mandarins of the arts, as they were described by the noble Viscount, Lord Eccles. That is an absolutely fanciful distinction. If we are to believe that the only people concerned with the just and humane treatment of the employees are the mandarins of the arts then I wish to convey my congratulations and good fortune to all such persons.
That appears to be the argument. As I said, I believe that this defence has been cooked up and is really the most discreditable part of the whole proceedings. I believe it has been cooked up because they could not find any other defence. To suggest that academics wish to appropriate the museum, that curators are not in the least concerned and that they hate the people who come in to the building is fanciful nonsense. It should not have been uttered and it is wrong that it has been. The simple question is that nine people have been shabbily and disgracefully treated.
Perhaps I may rehearse what happened to them. Apparently the discussion of this matter took some 15 minutes in order to consider a paper that was tabled at the meeting. It was not distributed in advance. I am asserting what I have heard and the facts may be wrong; it may be that the paper was distributed. Is it to be suggested that the fate of nine people who had given years of devoted service to that museum —some of them 30 years and one of them 40 years—should be decided in this way? Is it suggested that the right way to treat them is by allowing a decision to be reached after a 15-minute consultation on a paper that had not been read before? I believe that any private organisation that had behaved in that way would be stigmatised to high heaven. It is only a public organisation that can dare to treat people in that way.
I do not blame the curator or the chairman; I blame the people who appointed the trustees. I do not wish to stigmatise the trustees. I have examined the list and there are some of them who may have been qualified to perform their duties. It is quite clear that others of them had no qualifications. That is the real trouble. If those trustees had known what they were doing and had had any experience of how to deal with such a situation, they would not have tolerated for five minutes being asked to make a decision after a 15-minute survey of a difficult paper.
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I do not know whether the reorganisation of this museum is right or wrong. I have not the least idea. Any expertise that I have is not in that direction. That is not the point. The point is whether or not it is more important to consider how to arrange furniture and objects than how to treat human beings. That is the real issue. That being so, I believe that the trustees have a heavy responsibility. Probably it attaches to the people who appointed them. If you are appointed to an office that requires a special knowledge and experience and you know that you have not got it, it is likely to make you very irresponsible as regards the discharge of your duties because the people who appointed you obviously do not take the appointment seriously.
I believe that to be the real answer here. The problem is that the trustees were incapable of performing their duties. Some of them must have known how thoroughly wrong it was to reach that decision after a 15-minute discussion. I do not blame the chairman. I hope the noble Lord will not regard this as embarrassing. I have the greatest regard and respect for the noble Lord, Lord Armstrong. I have had dealings with him over the years and I do not know anyone who has displayed more courage in the discharge of certain duties than he has. If I may say so, he is a man who has very willingly allowed himself to become a scapegoat and whipping boy for a number of situations that are not in the least his responsibility. He took on a job which presented him with this board of trustees. He was not in a position to remove them or to say that he wanted others. It is not surprising that he allowed them only 15 minutes. He must have realised that any longer deliberation would have been entirely useless.
One of the discussions here is about whether one can popularise scholarship. There is a way of popularising scholarship. There is a way whereby one can attract great numbers of unscholarly people to a greater respect for scholars. This can be quite a popular device. I should like to remind noble Lords of the famous radio or television broadcast—I cannot remember which—called "Animal, Vegetable or Mineral". The programme featured distinguished archaeologists. One of them was the first commanding officer of the territorial battery that I joined, Sir Mortimer Wheeler. His display at that performance was masterly. Others would say that the object presented was a Hittite doorknob. He would listen for a moment and then present the magisterially authoritative conclusion that it was an Assyrian water bottle.
That programme did more to arouse an interest in scholarship than 100 lectures and 100 dissertations published in learned works. I have another personal illustration. I helped—and I am glad that I helped—a distinguished archaeologist who unhappily died in Egypt while engaged in his archaeology. I refer to Professor Emery. He discovered the outer chamber of the Pharaoh who was, if I am not mistaken—I rely on a very inefficient memory—the originator of modern medicine. He never succeeded in finding the inner chamber because he died, alas, before his excavation could take place.
It was to the amazed discredit of the government that they would not provide one penny for this

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research. For that reason I remember organising a dinner to which I was at pains to invite only rich tycoons, who, one would have thought, had no interest whatever in archaeology. By the end of the evening, when Professor Emery had explained to them in simple terms what he was doing, he had captivated them completely. One does not need to suppose that ordinary human beings cannot be attracted by scholarship. To believe that by destroying scholarship one is in some way increasing the attraction of the institution is not only a fallacy but is a stupid fallacy.
On another occasion I gave a dinner—my dinners were always designed with the mischievous intent of extracting money from the rich—to the professor of archaeology at Oxford. He may by now have retired as it was so many years ago. He made the Fishbourne discovery. I cannot remember his name. He too described to the audience in the clearest possible terms what he was doing He aroused a profound interest and moreover succeeded in extracting considerable sums of money from them. This project was supported by the Sunday Times.
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These illustrations are intended merely to convey that the notion that in order to popularise an institution that is supposed to be scholarly one needs to destroy the scholars is a total fallacy. One can encourage an immense amount of understanding by encouraging the scholars. What has happened in this case is too sad. The blame rests with the people who appointed the trustees. It is wrong to blame the trustees. Most of them had no qualifications for doing the job and insufficient administrative management or committee experience to protest at what was happening. What has happened is unfortunate.
I believe that the noble Earl, Lord Perth, with whom I have conferred if not conspired, has a suggestion to make about how the position can be put right. It is a notion with which I shall warmly agree. If there is a way to put this right, we should seize the opportunity. It is a discreditable exercise in the history of museums and of scholarship in this country. It brings discredit on the country and requires that some rectification should take place. If there is an opportunity to rectify it, we should seize it with alacrity.
9.34 p.m.
Viscount Knutsford: My Lords, I find myself at odds with previous speakers because they have all had great experience of museums whereas I have absolutely none. I can observe only from a base of ignorance and dare to voice some thoughts which I am afraid will certainly not be as profound and spicy as those voiced by the noble Lord, Lord Goodman.
The trustees at this fraught period in the distinguished history of the V&A should be actively involved in the continuing purpose of their charge or not involved at all. Surely they have taken the right decision to become more involved than hitherto by now stating certain objectives to enhance its public image, make the museum financially viable and modernise its standards in tune with the next century.
The hoped for outcome of those changes is to attract more and, I dare say, a mainly younger public to its collections and exhibitions—indeed, attendance figures have been falling drastically since 1983—and also to economise on expenditure, especially on staff costs, which, as we have heard, account for 83 per cent. of the total. In other words, the trustees are aiming to increase their income and contain their costs, so that they may aim for and anticipate a revenue surplus. Such surplus could be spent on preserving and displaying the objects in their care, not in carrying out badly needed repairs and renovations—for instance, to the 26 acres of roof which we have heard referred to more than once—which are at present inadequately funded by the Government and for which, as my noble friend Lord Carrington and the noble Lord, Lord Gibson, have already said, the Government certainly should be responsible.
The intention of the trustees is surely to demonstrate that they are doing their best to put the museum into a sound financial state so that the Government may be more sympathetic and approachable and more generous with grant aid. Perhaps the director has been insensitive in the way that she has initiated the changes; but should she not be allowed to carry them through in her own uninterrupted way without the critics foreboding that the changes are doomed to fail? It is inept to criticise and carp and to raise empty queries as to how various funcions will be organised in the future. They will evolve in the course of time. Further, if they have to be fine tuned, so be it.
Eight of the senior curatorial staff have met their Waterloo and it is said that it is a great waste of talent and that expertise and outstanding scholarship have been lost. Temporarily perhaps, but are there no scholarly under keepers who have been waiting a long time for promotion?
As this century draws to a close, all the national museums must adapt to current conditions in order to thrive. They must demonstrate that requirement in order to gain more support from government and, indeed, from the private sector, which is much more likely to patronise a tightly-run modernistic museum
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than an inefficient obsolescent institution which is sliding down the slope of insolvency.
That much-publicised affair may be honey to the art media but it is also a responsible attempt by the trustees to get more jam tomorrow to spread more thickly on their costly daily bread. They deserve the support of the critics and the Government's determined resolution to fund further capital expenditure.
9.40 p.m.
The Earl of Perth: My Lords, I join with many other noble Lords in welcoming the fact that the noble Lord, Lord Annan, opened the debate. After hearing those who have spoken, one realises the great need for such a debate to try to find ways to meet some of the troubles about which we have heard.
It is probably true that almost everyone accepts that some changes are needed. If one is to make changes one should do so early in one's directorship rather than wait. Having said that, we have run into trouble. Members of the art world are at one another's throats. That will be a bad thing if it goes on for too long.
Before I come to what we should do, let me touch upon my qualifications. Like the noble Lord, Lord Gibson, I was at one time on the V&A advisory council. I knew the last two directors well. I count myself fortunate also to know the present one who, I can assure all your Lordships, has great qualities. She has courage and is clear thinking. My other qualification is my belief, which others have echoed, that the V&A is held on too tight a rein. The noble Viscount, Lord Eccles, said at the beginning of his speech that it is under-funded. I believe that to be right. We are asking the V&A to make important changes without it having the money to do so.
I tried hard at the end of last year to suggest that the £100 million which did not go to the Thyssen collection should be channelled elsewhere, in particular to the V&A. I beg the Government to think carefully about finances.
The urgency of the financial trouble has led the director, the chairman and others to do things for which they would have liked a little more time. When the director was asked whether money was the main problem she said that time was of the essence. In other words, there was a pistol pointing at everyone's head.
We all know the sequel. It was the plan put before the trustees in January. I am not going into whether they were given a quarter of an hour to decide or whether the plan was appropriate. I wish to make three comments on the report. The first is that it wanted to divide administration and collection. That is probably right, but what worries me about the proposal is how administration is defined.
I noted that the paper said that there should be a clear-cut separation. The noble Lord, Lord Gibson, made the point which I shall make—that is wrong. There should be a separation, but it should not be so clear-cut that one group feels that it has nothing

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to do with what the other is up to. Having said that there must be a clear-cut separation, there was then the qualification that there needed to be close consultation between the administration group and the arts side, the collections. If that is so, then I think it is very clear that the administration side, as the situation is drawn, is going too far. Exhibitions, acquisitions and presentation are all part of the administration. My Lords, no; the role must to some degree also be that of the collections and arts side.
I think it is also true that the changes have been awkwardly brought about. I am not surprised; change is very difficult. I recall the famous night of the long knives when Mr. Harold Macmillan was Prime Minister. These activities are very difficult. If one is not very experienced one can cause a great deal of trouble.
The third comment I wish to make is that I am a little surprised to see that so much help has come from America. There are four young Americans to do one thing and another very senior American from the APM, whatever that may be, is voluntarily giving his services. I believe that we have facilities and people here who could have advised just as well, if not better, and who know the conditions here.
That brings me back to my first point: how tragic it is that there is in-fighting in the administration of the museum. Those outside have to play a very important part at some time or another. There is an outcry which I fear will not go away. Many noble Lords will have received the paper which I received about the special organisation set up to continue the fight. I have a suggestion in that connection and I hope it will be possible for the noble Lord, Lord Armstrong, the director and the board of trustees to consider it. On their programme or plan I suggest that they should consider asking the Museums and Galleries Commission to examine the situation and to help in one way or another.
I believe that the Museums and Galleries Commission is rather reluctant to take on that task. However, when I read the remit of the Museums and Galleries Commission it is quite clear that if the board of trustees, the chairman and the director wish it, the commission has a function to perform. As regards the members of the commission, they need not all be involved, but half a dozen have great qualifications for trying to help and I use that phrase so far as it is appropriate.
The noble Lord, Lord Goodman, and I have discussed the subject and I think he feels with me that we should follow that. If the board of trustees felt able to do that, a lot of the outcry in the present situation might become less strident. I hope that something will come out of this which will calm everybody. As the noble Lord, Lord Carrington, said, neither he nor any of us knows whether all the proposals are right or wrong. But let us or the board take advantage of the expertise of the Museums and Galleries Commission to see where it can assist. Obviously the noble Lord, Lord Armstrong, cannot commit his people, as he said, but I hope and believe that the pressures will lessen and the situation calm down.
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I have one last request which is that when the progress continues, I hope that the directors and others involved with the museum will make progress reports so that all of us can follow what is happening. Progress reports do not have to be produced every week or every month, but only at an appropriate time. Let us keep in touch with what is happening. If things go well, we shall give the museum all the support we can. The aim of everyone is the well-being of the V&A.
9.50 p.m.
Lord Rees: My Lords, I enter this debate with some diffidence as, unlike many other noble Lords who have contributed to it, my qualifications are rather limited. Although I have been a regular visitor to the Victoria and Albert Museum during my adult life, unlike other noble Lords I have never been involved in the administration of that great institution, nor do I know many of the personalities involved. However, I am a member of the court and council of another museum, which is happily not faced with quite the same range of problems.
As it happens, I am also a member of the Museums and Galleries Commission. The noble Earl who has just spoken made what I took to be a flattering reference to the capabilities of the Museums and Galleries Commission. I am not entirely certain whether that commission is qualified or equipped to act in an arbitral role in this sensitive situation. I suspect that that is what the noble Earl had in mind. I must certainly emphasise that any views I express today are entirely my own. I am certainly not authorised to speak on behalf of my colleagues.
I shall be very happy, however, to draw the conclusions of the noble Earl to the attention of my colleagues. I have no doubt they will read the whole debate with extreme interest. But, as a member of the council of another museum and as a member of the commission, I am concerned to see what general principles can be extracted and what general lessons may be learnt from this rather melancholy episode.
The question set for our debate tonight by the noble Lord, Lord Annan, has, as one would suspect, been rather carefully constructed so as to enable such noble Lords as are so minded to make ritual denunciations of the parsimony of this Government's public expenditure policy. I flinch under the lash of my noble friend Lord Carrington, for, as Chief Secretary, I bore some responsibility for public expenditure at a certain point in my career. I had the pleasure of meeting the noble Lord, Lord Carrington, and his trustees at an earlier stage. I shall leave it to the noble Lord to say on another occasion whether they derived much satisfaction from that encounter. I am delighted also that the question draws into our debates a Government spokesman in the person of my noble friend Lady Trumpington. I have no doubt she will bring her normal robust good sense to conclude the fevers of debate.
As I see the position, I doubt whether the Government have much direct responsibility in this matter. However, I shall endeavour to deal with the cogent points put by noble Lords from various sides of the House. I readily concede, as general questions

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of museum administration and indeed of the cultural life of this country are involved, and as the Victoria and Albert Museum is a most distinguished national institution, that its affairs must be a perfectly proper subject for our debate.
I also concede that the Government are responsible in a large measure, although not exclusively, for funding the national museums and galleries. But I think it is a little far-fetched and rather distorts the tenor of the debate to trace to the Government's public expenditure policy the genesis of the problems with which the noble Lord, Lord Armstrong, and his fellow trustees have had to deal. If one were to explore that further, it would lead to a rather repetitious debate because this question has been the subject of so many debates both here and in another place. Indeed, as a former Chief Secretary, I would be more concerned to see whether the income of any particular museum has been well controlled and well spent.
I was not impressed by the fact that 83 per cent. of the income of the Victoria and Albert Museum was spent on salaries. Two conclusions could be drawn from that: first, that the museum was underfunded or, secondly, that it was not well administered. There is a need for all great institutions, whether in the private or public sector, to have a regular critical, searching, shake-up of their administrative procedures and their staff from time to time, painful though that may be for those who are subjected to that scrutiny.
The Government are responsible for the appointment of the chairman and trustees. Beyond that, responsibility for the running of the museum or gallery must rest with those trustees. If I have the constitutional position wrong, no doubt the noble Lord, Lord Armstrong, whose speech we eagerly await, will correct me. That said, I am surprised that so many noble Lords who have taken issue with the Government's approach to cultural questions and questions of the arts should find that unattractive. I should have thought that they would have applauded any measures to put a little distance between the administration of those great institutions and the shifts of Government policy.
It might be proper, although a little tasteless, to debate the personalities and qualifications of the chairman and the trustees of the Victoria and Albert Museum. I know that the noble Lord, Lord Armstrong, is capable of defending himself and his actions, but his colleagues are not represented here or perhaps so well equipped to defend themselves. I suspect, however, that in this particular area governments, of whatever party, will always be thought to have got it wrong. Whether partisan bias is attributed to them or lack of sensitivity, criticism is always made of the appointments they make in this very sensitive field.
In relation to the implication of the vigorous points made by the noble Lords, Lord Hutchinson and Lord Goodman, I should point out that the reservoir of people who are equipped, by their stringent standards, to perform satisfactorily the role of trustee of a great national institution is nothing like so large as they would imagine.
Lord Goodman: My Lords, will the noble Lord give way for a moment? Since an interpretation is being put on what I said, perhaps I may make it absolutely clear that I am concerned only about the way the people in question were treated. It is not a question of whether the trustees are well equipped to deal with museum problems; it is a question of whether they are well equipped to deal with human problems.
Lord Rees: My Lords, certain slighting comments were made—I think that that was the implication—by the noble Lord, and other noble Lords, of the qualifications of those with a business background to sit among the trustees. I should have thought that business people frequently have to deal with the practical consequences of the contraction or takeover of a business. If I have misinterpreted what the noble Lord said, I shall very readily withdraw.
However, he said—and I think that I made an accurate record—that there was no point in giving the trustees more than a quarter of an hour to consider the paper that was circulated (and I make no comment on the amount of time that was given to them) because they would not have understood the implications of what they were called on to do. If I have not recorded what was said accurately I shall readily withdraw and give way to the noble Lord should he wish to intervene again.
Lord Goodman: My Lords, I do not wish to make a second speech, but I did not mention a businessman in the course of my speech. I welcome well-informed businessmen because they know how to treat their staff.
Lord Rees: My Lords, it may be that the thrust of the noble Lord's remarks was not directed at any particular commercial qualification. However, I believe that he was fairly brutal in his condemnation of the intellectual qualifications of the trustees over whom the noble Lord, Lord Armstrong, has to preside.
Much of the debate both inside this Chamber and outside it has concentrated, sometimes in a veiled manner and sometimes explicitly, on the personalities, defects, qualities and methods of the various people involved. Of course, that may be inevitable. I well understand the sensitivities of those people who have given long and distinguished service to the museum and whose careers may have been terminated. It would perhaps be idle for me to express the hope that they will be treated as generously as may be within the constraints under which a public institution operates.
However, I must say that, in spite of some experience of the rough and tumble of debate in another place, I have been surprised by the sharpness and acerbity of debate both inside this Chamber and in the world outside. I had always assumed that debates in the world of the arts would be characterised by a taste and refinement which is absent from the brutal world of politics. I have been sadly disabused of that illusion.
I believe that a more fruitful area of debate from which some general conclusions may be usefully drawn concerns the structure of management of a

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great national institution and how a proper balance may be struck between administration, presentation—which is not necessarily the same thing as administration—and scholarship. Each aspect of a museum's activities demands different skills. As the noble Lord, Lord Gibson, perceptively observed, such skills are rarely found combined in one person.
The new structure proposed for the Victoria and Albert Museum might appear to involve a clear divide between curatorial and scholarly functions. I suspect that after a few years, like so many reforms undertaken in this country, the substance may prove to be rather different from the form and that the changes will turnout to be less acute than they threaten to be at the moment. I cannot believe that in a small society, such as that constituted by a museum, cross-fertilisation will not occur and that individuals will not move from one discipline to another or from one department to another. For the moment I suspend judgment. I believe that the trustees, the new management and the new structure deserve the benefit of doubt.
It must also be recalled that the reforms were undertaken in response, first, to the report of the National Audit Office and then to the report of the Public Accounts Committee—and all those trained in parliamentary life and government have learned to genuflect, whether rightly or wrongly, to that august Gladstonian body. The report of the Public Accounts Committee required more than a merely formal and superficial response. Later and, I hope, detached from the heat and dust of controversy that this episode has generated, we may be able to see whether those measures at the Victoria and Albert Museum have succeeded in attaining their objectives and whether any general lessons can be learned by other museums and galleries. For the moment, I can only wish that great institution well.
10.3 p.m.
Lord Armstrong of Ilminster: My Lords, I must declare an interest as chairman of that much maligned, much abused body, the Board of Trustees of the Victoria and Albert Museum. If I were to try to answer all the points that have been raised about the museum, noble Lords would be here late into the night. In addition, I should steal the thunder of the noble Baroness, Lady Trumpington, whose winding up contribution and answers to some of the questions I much look forward to hearing. I thought that I would deal with the easy ones myself and leave her with the snorters.
Perhaps I could just touch on one or two questions. The noble Lord, Lord Annan, asked about charging institutions for the services provided by the museum. Let me reassure him that the trustees have no plans for instituting charges for services, although if funding becomes much tighter we may have to think about charging the Government. I should say that that is a joke. The noble Lord asked about the advertising campaign last year and whether it was proper that the contract should have gone to Saatchi and Saatchi. The noble Baroness, Lady Trumpington, may wish to comment on that, but I simply say
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that Saatchi and Saatchi have been the agents for the Victoria and Albert Museum for a long time, long before Mr. Maurice Saatchi came on to the board as a trustee. Mr. Saatchi takes no part in the arrangement of the contracts or in the arrangements made under them, although as a trustee he is there if and when we discuss those matters on the board.
I shall be dealing with much of what the noble Lord, Lord Hutchinson of Lullington, said in the main part of my speech. The noble Lord, Lord Kennet, and others have commented unfavourably on some of the exhibitions that have taken place in the Victoria and Albert Museum when they have been sponsored by commercial concerns. A good deal of fun has been had about the Sock Shop. There are three reasons for having exhibitions of this kind. I hope that the noble Lord will think that they are good ones. The first is that we are the national museum of art and design. We are the national museum of contemporary design. We take pride in having artefacts of contemporary design in textiles, ceramics, metalwork and in other parts of the museum. I believe that it is wholly within the museum's terms of reference that it should have exhibitions which enable us to show the best of contemporary design.
The second reason—and it is the reason that applied in particular to the Elton John exhibition—is that such exhibitions, which are lively, encourage young people to come to the museum. In that period the exhibition brought in a large number of visitors, —much larger than we normally have, and some did not just go to the Elton John exhibition but came to the museum itself. It seems to me a very good thing that people should come into the museum in this way and learn to think of it not just as a historic museum of dead gothic sculptures and the rest. Of course those exhibitions bring us in a little money, and we are not reluctant to accept it. However, I should not like noble Lords to think that that was the primary objective of the exhibitions. They serve the purposes of the museum in illustrating contemporary design and bringing people into it.
The noble Lord, Lord Kennet, also asked about disposals and implied that they will increase. I shall return to that in a moment or two.
I shall be dealing with much of the other comments as I go along. I shall come to the main body of what I should like to say. First, on the trustees, when it is not being suggested that we are gutless, it is suggested, as it was by the noble Lord, Lord Hutchinson, that we are a bunch of hard-faced businessmen dedicated exclusively to saving money and avoiding loss, without regard for the purposes for which the museum exists or the welfare of the staff. It is quite simply untrue.
The trustees come from various and varied backgrounds. Some from politics. I am sorry that my colleague on the board of trustees, the noble Lord, Lord Barnett, cannot be here tonight. He has been unwell. I am glad to say that he is making a good recovery. Otherwise I am sure that he would be with us tonight. Some trustees come from the public service. I need say no more. Others come from the arts, the academic world, from the world

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of designers and from connoisseurship, as well as from industry and commerce. The hard-faced businessmen, if I may quote the phrase that has been used, are very much in the minority. All these people accept appointment because they care for and are happy to work for the museum. They give it a lot of unpaid time and they bring to their service a balance of appreciation of the artistic and scholarly values of the museum and an understanding of the practical problems of managing a large organisation.
There is some suggestion that we are all appointed with some undisclosed and sinister mandate from the Prime Minister. We are of course all appointed by the Prime Minister because that is how Parliament said that we should be appointed in the National Heritage Act. But none of us is given any mandate by the Prime Minister other than that implied or stated in the definition of our responsibilities in the Act of Parliament. If one looks down the names of trustees, one sees that it is no more than a bad joke to suggest that they are appointed because each trustee is "one of us", I believe is the phrase, or is there to do the Prime Minister's bidding. They have accepted appointment simply with the objective of serving the best interests of the museum.
The noble Lord, Lord Kennet, hinted at a third point, that perhaps one reason why the trustees have approved the proposals for restructuring is that we want to go for a systematic policy of disposal in order to finance running costs. Again that is quite untrue. The trustees' powers to dispose are defined in statute and they are narrowly limited. We have only recently informed the Minister for the Arts, in answer to a consultation paper issued by him, that we do not seek any extension of those powers. We are there to be custodians and preservers of the heritage of collections in the museum and not to knock them down to the highest bidder.
The noble Lord, Lord Carrington, said most of what I wanted to say about the director of the museum. I deplore as strongly as anybody the personal and sometimes vicious attacks that have been made on her, and most of all the attack made on her by her predecessor who does not know her. It was an astonishing and shameful example of rancour and spite.
I sometimes believe that one of the director's problems is that she is not a member of what is sometimes called the Courtauld Mafia. I regret to say that in some cases it looks as though one of her faults, which I am afraid she cannot do anything about, is that she is a woman. I was not a trustee when the director was appointed so I cannot be held responsible for the appointment but I should have been perfectly happy to be. It was an extremely good appointment. She is a highly intelligent, competent, courageous and caring person. She has a first-class honours degree in art history and understands and values scholarship. She came to the museum first in 1985 to take charge of the National Art Library, and as the noble Lord, Lord Carrington, said she has transformed that. She has been in the V&A quite long enough to hold well-informed and clear views of the museum's strengths, weaknesses, needs and opportunities.
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One of the charges made is that the, curatorial staff were not sufficiently consulted before the director's plans for restructuring were put before the trustees. If it is said that the curators were rot consulted on the specific document of proposals put to the trustees, that is true, but the proposals came after a prolonged process of discussion inside the museum, both at formal meetings and informal gatherings, extending over many months. In the course of those discussions various possible structures were canvassed, including a structure which was much along the lines of that now proposed. The discussions showed that there was a considerable measure of agreement among the curatorial staff on the problems which the museum faced and on the objectives which the museum should be setting itself. It was clear that there was no prospect of agreement on matters of organisation between those who were deeply and sincerely attached to the status quo and those who accepted that some change was a necessary condition for dealing with the problems and achieving the objectives.
The director listened to all the points of view through all the long months of discussion. She did not start with a preconceived commitment to the changes she eventually proposed, but gradually over the months of discussion she came to the conclusion that tinkering with the existing organisation would not be sufficient and that what was needed was radical change. Before bringing her proposals to the board the director discussed them with the board's senior staff appointments committee, by whom they were unanimously agreed, so that when they came before the board there was a body of trustees already familiar with the proposals.
Representatives of the staff were informed about the proposals in strict confidence or the morning of 26th January. That was not consultation. Inevitably perhaps, the proposals leaked immediately that morning not only around the museum but to the press. The board of trustees discussed them in the afternoon. The paper was available to trustees to read only 15 or 30 minutes before the meeting, but it is not true to say that the discussion, as it were, started cold. The trustees had been informed about the progress of discussions inside the museum over many months and they were well aware of the issues that were involved.
Some trustees would undoubtedly have liked to have had more time to consider all the detailed implications and they said so. But the restructuring proposal was generally welcomed and approved of. There was a long discussion, not merely a 15 minute discussion, to which every trustee present contributed. They all endorsed the proposals in principle. It was accepted, particularly as the proposals had leaked, that it was important to avoid a period of prolonged uncertainty. It was also accepted that it would be impossible to consider the detailed implementation of the proposals until they were agreed in principle and had been made public. Therefore the proposals were unanimously approved by the trustees.
It was clear from the papers considered by the senior staff appointments commit tee and by the trustees that, as under the restructuring proposals

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the materials departments as such would disappear, the posts of the keepers of those departments would cease to exist. Under the Civil Service rules—the procedures which apply in museums as an inheritance from the days when they were a department of the Civil Service—management is under an obligation to offer voluntary redundancy terms to staff whose posts are to cease to exist. Offers were made accordingly—in the most generous terms available to us under the rules of the scheme—to nine members of the curatorial staff including five keepers of departments, on 3rd February. Those concerned were asked to respond within 14 days. Eight of the nine accepted the offer and will cease to be employed as members of the staff of the museum at the end of this week. The ninth elected not to accept the offer and is being found new duties in the museum.
The management has been accused of precipitate haste in that process. There were two reasons for proceeding without delay. The announcement of the proposals inevitably created great uncertainty in the museum. It was felt—and the Treasury advised us —that in such circumstances there was much to be said for moving sooner rather than later in order to reduce uncertainty. The Treasury also advised that in Civil Service practice two weeks was a reasonable period in which to give those concerned an opportunity to consider their response to the offers made.
The other factor is that, for unavoidable reasons, there were unspent funds in the museum's building grant for the current financial year. The Office of Arts and Libraries was prepared to allow them to be used to meet the costs of the redundancies. It had to be assumed that those funds would not be available after 31st March, 1989, because if they are not used by the end of the financial year they are lost. The museum's financial prospect for the financial year 1989–90 was such that it was clear that it would be virtually impossible to find the money in that financial year.
It has been alleged that the meetings with the director at which the offers of voluntary redundancy were made were brief. If so, it was by the choice of those concerned and not by the director. She would have been ready for more extended meetings and would have agreed to see anyone who wished to return—as one or two did—in order to have further discussions before deciding whether to accept the offer. Some of those concerned sought clarification of the terms of the offer from the staff of the museum. But the first the director heard from most of them was in the form of a letter sent to her 11 days after the offers were made by a firm of solicitors which had been instructed only the previous day. Those concerned were under no compulsion or pressure from the management to accept the offer. It was open to them to find out from their union or legal advisers, if not from the management, the kinds of possibilities and choices that would be open to them if they did not do so.
The acceptance of voluntary redundancy does not preclude a continuing association with the museum as a consultant or adviser. I am glad to be able to
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tell your Lordships that two of the eight people concerned have already agreed to act in that capacity. I am glad that their knowledge and experience will continue to be available to the museum. I shall be glad to know that others concerned might be interested in such possibilities.
I should like to explain the proposals briefly because I find that there exists some uncertainty about them——
Lord Hutchinson of Lullington: My Lords, will the noble Lord give way because he is now turning away from the general thrust of the criticisms which have been made? He has not dealt with the main attack which was launched on the meeting of 26th January which was this. There was not one mention in the paper put before the trustees that nine scholars would be offered redundancy. There was not one word about it nor was anything said in the interview with journalists from The Times three days later. That was the point that was being put.
Lord Armstrong of Ilminster: My Lords, I am grateful to the noble Lord. At the meeting on 26th January the trustees were well aware that there would be what is sometimes called "a human cost". It was not specifically set out in the paper, but it was of course made clear that the disappearance of the departments in question would mean that certain posts would cease to exist and the position of the keepers concerned was clearly something which was going to have to be dealt with. So although the paper is not clear about it, I can assure your Lordships that the fact that there would be such a course was in the minds of the trustees at that meeting.
To turn back to the proposals themselves, the museum has been organised for the past 80 years into materials-based departments each in the charge of a keeper with responsibility for all aspects, collection management as well as scholarship and research, of a particular type of objects, ceramics, textiles and so on. The noble Lord, Lord Blake, said, I think, that it was not necessary to separate research and administration. I understand and sympathise with that point of view, but the fact is that collection management has become increasingly complex and technical. Curators for many years have been complaining that the requirements of collection management are reducing the time and resource that they have available for scholarly work. At the same time, as several of your Lordships have reminded us, the museum has come under severe criticism in another place for its shortcomings in collection management.
The director's proposals are designed to provide more opportunities for curators to pursue the work of scholarship and research by concentrating those aspects of the work in a new research department, relieved of the obligations and responsibilities for collection management. That will be undertaken by a new registrar's department, which will specialise in those aspects of the museum's responsibilities. In any organisation, as your Lordships will well know, you have to break it down in one way or another into departments. The lines may go this way or that way, but whichever way the departmental lines are

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drawn, it becomes necessary to create cross-liaisons if the operation is to be successfully carried out. So it is in the museum.
Both these departments will be staffed by members of the curatorial grades. There will be arrangements for close liaison between them, as well as crosspostings—to take up the point referred to by one speaker—which will ensure that members of the curatorial staff reach senior levels with experience of both departments. Two new assistant director posts are being created to support the director and take some of the load off the director. Both the research department and the registrar's department will come under the supervision of the assistant director (collections). I agree very much with the noble Lord, Lord Gibson, that that is a crucial appointment. We are taking a great deal of trouble about it and we are determined to make the best possible appointment we can of a curator, or somebody with experience of that kind in the museum world, who will have the knowledge and the personal qualities to command the confidence and respect of the staff.
The research department, as the director has described it, will be the power-house of the museum. It will have groups of staff specialising in particular classes of objects, rather like departments in a university faculty. Members of the research department will be responsible for advising the director and the trustees on acquisitions and disposals. They will be consulted about the display of objects in the museum and about loans from other institutions. They will be assured of immediate, direct and unrestricted access to the objects which are the subject of their study and research. The museum will continue to provide through the research department the service of advice and opinions which it now provides to other museums and learned institutions, to the art trade and to the Government.
It is fighting with false fire to suggest that these proposals, or the departure of five keepers, spell the end of object-based scholarship at the V&A. Of course the trustees regret the departure of the keepers and the others who have decided to accept an offer of voluntary redundancy. It represents a loss of resource to the museum, which will be diminished to the extent that those concerned wish, or are able, to act as consultants or advisers. But to suggest or imply that these events will mark the end of scholarship at the V&A is not only absolutely without justification: it is, as the noble Viscount, Lord Knutsford, pointed out, extremely unfair to the considerable number of other distinguished scholarly curators in the museum.
I should simply add that at their meeting this morning the trustees re-affirmed their support for the proposals which were approved on the 26th January, invited the director to make recommendations as soon as possible on their detailed implementation and agreed that a committee of trustees should be established to assist the director and advise the trustees on matters related to that implementation. I should also say that there are and will be arrangements for close consultation of the staff about the implementation because of course
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the success or otherwise of the proposals will rest on the detailed arrangements made to put them into effect.
I was interested in the suggestion made by the noble Earl, Lord Perth, that the Museums and Galleries Commission should be brought into the picture. If a body of trustees is appointed to run such a place as the Victoria and Albert Museum, I think that it has to be allowed to get on with the job. That is the job that it is appointed to do. I suspect that that will be the view of the Museums and Galleries Commission. I should not feel able to commit the museum to seeking the advice of the commission without consulting my fellow trustees and, of course, the director. If in the process of detailed implementation there are points that the MGC thinks that it can usefully offer, we shall listen with great interest and respect. We have a good relationship.
The purposes of the trustees and the director can be readily summarised. They are to maintain and improve standards of scholarship; to improve standards of object conservation and collection management so that we can meet the criticisms made of that; to make our collections more accessible and attractive to the public so as to make more people aware of the variety, splendour and beauty of the objects in our collections and of their historical and cultural meaning and importance—that is why we hope to open a branch of the museum in Bradford—and to play what I hope will be an increasing part in public education at all levels, school, higher and adult.
All that has to be achieved within the manpower and financial resources available to the museum. This is not the occasion for me to moan about financial stringency. Your Lordships have done it for me. I shall simply reiterate the concern that we all feel—I am sure that the concern is not confined to the Victoria and Albert Museum—at the way in which the costs rise, as a result of decisions not taken within the institutions, very much faster than the i funds available to us from government. That is a process that cannot go on for ever. This financial stringency at least imposes upon us and those responsible for managing the museum the necessity as well as the duty of managing every aspect of it as efficiently and effectively as possible.
I put the maintenance and improvement of standard of scholarship first because that is not an optional extra; it is fundamental to the achievement of all the other purposes. The director would never have made her restructuring proposals and the trustees would never have approved them if they had believed that they would threaten scholarship in the museum. They recognise the importance of what has been described as continuity of scholarship and believe that the proposals will help to preserve that continuity and promote high standards of scholarship and research. Whether we can go so far as the noble Viscount, Lord Eccles, suggested and employ scholars to write biographies of Proust I am not sure. With our present financial situation I am not sure that we can afford outdoor relief for students of French literature or other studies wholly unrelated to the purposes and collections of the museum.

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In the public debate that has followed the announcement of the proposals I have detected an underlying profound but I think unspoken difference of view about the purposes of the museum. I have received, as have all my fellow trustees, many letters of concern, clearly often deeply felt, about the proposals. Some were from ceramics and textile departments as far a field as California. I respect that concern, although for the reasons that I have given I think that it is unfounded.
All the letters that I have received come from what might be termed insiders; from other museums, from societies interested in the kind of objects that the V&A has in its collection and a few from the trade. It is not clear that all of my correspondents have fully understood the nature of the proposals but all are concerned that the restructuring and the departure of the five keepers will mean the decline or death of scholarship at the V&A and of the role it plays in the world of art scholarship. Not one of them mention the role that the museum plays, or should play, in serving the wider public.
If it is the new museology—an unlovely word—to want to improve the accessibility and attractiveness of the museum to the general public and to play a greater part in public education, the trustees and the director must plead guilty to being new museologists. I prefer to see it as a fulfilment of the public responsibility laid upon the trustees by Parliament and a reaffirmation of the ideals and aspirations which inspired the founders of this and other artistic and education institutions in South Kensington in the 19th century. That is the point made by the noble Viscount, Lord Eccles.
Sir Henry Cole, the first director of the museum in the mid-1850s, defined the purposes of the V&A as being, first, to educate the public in matters of design; secondly, to educate designers by exhibiting the finest examples from the past; and, thirdly, to educate historians who wish to write about design. As the museum has developed it sometimes seems as if we are in danger of concentrating on the third of these purposes to the exclusion of the first two. The V&A is unique in the variety and size of its collections: the greatest collection of European sculpture outside Italy; one of the largest collections of ceramics in the world; and the largest collection of Indian objects outside the sub-continent. Diversity is in the very nature of this museum and the richness and splendour of its collections carries with it the responsibility for making them as accessible and as attractive to the public as we can and as resources allow.
We now have to turn our attention, as trustees, to the task of implementing the proposals to make sure that we achieve the objects I have described. The efficacy of the restructuring will, of course, depend not only on the leadership of the director but also on the understanding and co-operation of the staff, which I am sure she will have. It will take some time to bring the restructuring into effect and it will be a year or two before it is possible to begin to assess the effectiveness of the changes. However, the director and the trustees are determined that they shall, and we confidently believe that they will, serve
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the purposes which I have described and prove to be of great benefit to the health and welfare of the museum and to its standing and reputation as the national museum of art and design and, I am proud to say, one of the greatest museums in the world.
Lord Goodman: My Lords, before the noble Lord sits down, and having regard to the hour, can he tell the House whether at this fateful meeting the trustees were told that the employees concerned would have their employment terminated on this sort of notice? They would have 14 days in which to make a decision and they were not told of the alternative; that if they refused to accept redundancy they would have their employment terminated. The noble Lord has given, if I may say so, a masterly dissertation on the nature of the museum but he has not addressed himself to the matters that trouble me.
Lord Armstrong of Ilminster: My Lords, the trustees were aware that early retirement would be involved. How that early retirement would come about was not clear. We were under obligation, as I mentioned in my speech, to offer voluntary redundancy in the first instance. For what reason I cannot say, the advice we were given by those best qualified to give it was that we were not to discuss with those concerned the alternatives at that stage. That would not, of course, have prevented them from discussing it with their unions or their legal advisers. We were precluded from a discussion of the alternatives at that stage.
Lord Goodman: My Lords, can the noble Lord say who gave that extraordinary advice?
Lord Armstrong of Ilminster: My Lords, the advice came from the Government.
10.34 p.m.
Baroness Birk: My Lords, this has been a long but enthralling debate and I shall endeavour not to delay the House for too long.
I am delighted that the noble Lord, Lord Armstrong, has taken part in the debate. His statement that the maintenance and improvement of scholarship must be at the top of the priorities is welcome to me and, I think, to all who are here. I do not know how far it answers some of the points made in the very strong speech introducing this debate by the noble Lord, Lord Annan. Basically I am in favour of the new structure that is suggested. It was quite obvious that something had to be done about the museum. It is not as if it was progressing from the status quo, working extremely well, or that it was not short of money.
Having read the various papers and talked to people, and having heard the noble Lord, Lord Armstrong, I still have an uneasy feeling about the secrecy that seems to have covered so much of what took place. The noble Lord, Lord Goodman, tried to get an answer from the noble Lord, Lord Armstrong, about the advice that nothing should be said to anybody. We immediately have a very secret kind of operation in which there was only 15 minutes to consider the plan. Again, I feel that this is all in aid of some quite unnecessary secrecy that in the end

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resulted, as we have all seen, in a situation that is going to take some time to calm down and for peace to be restored.
The noble Lord said that the Treasury felt that there was much to be said for moving sooner rather than later, but I do not believe that sooner means almost immediately and without any warning. If it was necessary to get rid of a number of the keepers at that time—and some of them were near retirement anyway—it could have been worked out over a reasonably short period. I believe that is extremely important when one considers the human cost, which is a matter that should have been considered throughout. In answer to a question put by the noble Lord, Lord Hutchinson, the noble Lord, Lord Armstrong, said that the trustees were told that there would be a human cost, but they were not told exactly what it would be, since, as we all know, the question of redundancy for nine people does not appear in any of the papers.
The noble Lord mentioned the question of the trustees. The noble Lord, Lord Hutchinson, made a point about this, as well as the noble Lord, Lord Annan. There is no one among the trustees who has any experience of working in a museum. We know that there is one vacancy because Professor Kemp has resigned. Will this fact be made a point of so that we have a more mixed flavour of people, if I may put it that way, than there is among the trustees at the moment?
I agree that it is important to have business people on such bodies. When I was a Minister at the Department of the Environment I also appointed such people. But there is too much of a sense of business among them and not enough of art and knowledge of museums, which I believe is extremely important. For some years I was a governor of the British Film Institute and we had a wide range of people with expertise and knowledge in different fields. Always there was a nucleus of people who really understood and who were involved in film-making, distribution and the industry generally. One knew that there was this built-in expertise.
When I was a Minister at the Department of the Environment I was responsible for the upkeep of the fabric of the museum, whereas the Minister with responsibility for the arts was responsible for the content. In that delightful part of my job I spent a considerable amount of time visiting different museums, getting to know the directors and many of the keepers and also the boards of trustees. One felt that those boards of trustees were a more mixed cultural bag then there appears to be at the moment at the V&A. One could have conversations about the museum with people who were concerned about these matters. One cannot for the sake of sponsorship go too far outside that circle.
The noble Lord said that the people were not compelled to accept the offer. It seems to me that a gun was placed against their heads. Does he realise the damage caused by the way in which it was done? The director has said that if she had to do it again she would do it rather differently, which was, I thought, a frank admission. In mentioning her I must also say a few words in support of those noble
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Lords who rightly complained about the treatment she received both in sexist terms and because she was so often referred to as a mere librarian. I am sure that I do not have to remind the House that Frank Francis, a one time director of the British Museum, was a librarian. He was proud of the fact and boasted about it.
I am not clear about how all these plans will work. There are many gaps in the explanations put forward. Even the paper for trustees strikes me as rather an inadequate document. I agree that most trustees worth their salt would have either objected or said that they needed longer to read it. They would have asked for another emergency meeting and insisted on having the time to go through it to understand it properly. The plans that are to be put into operation are not clear enough. I should like to be convinced that there will be no loss of scholarship and research and that this plan will work to the advantage of the museum. The chairman, the trustees and the director must explain it in greater detail to us all.
This has gone beyond the museum world. I do not believe it essential that one should have the collection, the management and the research absolutely tied together like siamese twins. When Kenneth Clark wrote his great book on Leonardo, he was not the curator of the drawings at Windsor; and nor did he have to be. He had access to the exhibits, which was the main thing. He did not need to manage, and may well have been delighted that someone else had to do so.
We must all try to get the whole thing moving. On Monday night I was at the party at Fishmongers' Hall. It was more of a lively wake than a party. I must tell the noble Lord, who I do not suppose was there——
Lord Armstrong of Ilminster: I was not invited!
Baroness Birk: I am sorry to hear that, but I must stress that I was not giving the party. However, my Lords, there was a feeling of anger. indeed, one could breathe the anger and despair in the air. It seemed that what had been done had—however unwittingly—created that feeling, and that it was something which really ought to be put right as soon as possible.
It was suggested to me that the proposal put forward by the noble Earl, Lord Perth, might be a way to deal with the situation—that is, to let the Museums and Galleries Commission carry out an inquiry into the matter. However, the noble Lord, Lord Armstrong, is quite right when he says that unless the trustees ask for that to be done and are prepared to embark upon such a course of action, one cannot go along that road. But, if they do, I think that any road one can go along to get some form of reconciliation would be welcomed, so that the whole matter can be dampened down. Further, I am quite sure that if any of us who have taken part in the debate can do anything which is within our powers, we shall most certainly do so. I say that because the one thing which we all have in common in what has really been I think a pretty moderate debate—indeed, I thought that feelings might fly even higher—is our feeling of goodwill and also our

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great affection towards the museum. We are all anxious to see the matter sorted out, even if it means that some words have to be eaten all round and some reverses of policy undertaken. In my view, the end is worth those means.
10.46 p.m.
The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, I should like to echo the last words expressed by the noble Baroness, Lady Birk, when she spoke with affection about the V&A. I have no qualifications, save perhaps those of a consumer in that I visit museums. My noble friend Lord Eccles spoke of mandarins and I am highly conscious of the fact that I shall have to tread warily like Agag when following such a galaxy of eminence this evening. I understand so well my noble friend's references to children. I used to take parties of Leys boys around the Fitzwilliam Museum and many a hand did I slap. Indeed, I used to make the boys write to me after such expeditions and received such replies as, "Loved the armour; hated the crockery". I just hope that a reply later in life would show a little more appreciation for Bow, Famille Rose and Kaendler.
I think we would all agree that the Victoria and Albert Museum can be justly proud of its high standards of scholarship and research: and as an institution of international renown it needs to build on this reputation, encouraging younger scholars to maintain the high standards that we have come to expect.
It is worth remembering the four main functions of the trustees as set out under the governing statute, the National Heritage Act, 1983, which are as follows: to care for, preserve and add to the objects in their collections; to secure that the objects are exhibited to the public; to secure that the objects are generally available to persons seeking to inspect them in connection with study or research; and to generally promote the public's enjoyment and understanding of art, craft and design, both by means of the board's collections and by such other means as they consider appropriate. That is the base from which reorganisation stems. I say especially to the noble Lord, Lord Annan, and the noble Lord, Lord Kennet—who I see is not now in his place—that it is most important to remember that the responsibility lies with the trustees and not the Minister.
There can be no question of interference in the management. The V&A has the principle of devolution of authority, which is correct in such matters. The restructuring decisions are a matter for the board of trustees and the director only. They do not require government sanction.
There has been some concern in the media that curatorial staff will no longer have access to the collections. It is my understanding that is not the case. The experts in the proposed department of research will have immediate access to objects in the collection and will be consulted about display and storage of those objects. The research department will also advise on acquisitions and will be responsible for cataloguing the collections in their
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care. Freed from the responsibilities of day to day housekeeping and working closely with the objects, the scholars will be able to concentrate further on research and extending our knowledge and understanding of the collections. Concern about the nature of the registrar's department expressed in the media has also been based on misunderstandings; in fact it will be staffed essentially by curators, knowledge and experience of the objects being essential skills for the job.
The objectives of the director and trustees are worthwhile and I believe that they should be supported. The proposed changes, which will be introduced over the next three years and which will be constantly monitored by the director and senior management, are in response to the changing needs of the museum. They have emerged from full staff consultation within the museum during the past year.
The board itself consists of individuals drawn from every field of experience, including scholarship, the arts, business and the public service. Each trustee is chosen for the skills and experience that he or she can bring to the museum.
There has been speculation in the media, which your Lordships may have seen, on relations between senior management and staff at the museum. That is naturally a matter for the director and trustees. However, my right honourable friend the Minister for the Arts, in another place, attaches great importance to management of staff and sees this as a key issue in any restructuring plans for the museum. Indeed, earlier this week, in another place, he assured honourable Members that the director is most anxious to maintain good relations with the staff and is making every effort to sustain high morale.
The Government themselves have had no part to play in directing policy at the Victoria and Albert Museum and I am confident that your Lordships will agree that this is surely right. The Minister has pursued his policy of devolution of authority, believing the board and the director more suitable to decide where their priorities must lie and how the museum should move ahead. Your Lordships may be assured that any funding implications this year deriving from the reorganisation will be met wholly from the museum's own resources. No additional money has been offered by the Treasury or the Office of Arts and Libraries in relation to these proposals.
I shall quickly skip through some of the questions asked of me which the noble Lord, Lord Armstrong, did not cover in his very able speech. The noble Lord, Lord Annan, asked whether the trustees had informed the Office of Arts and Libraries of their view of the dispute. Yes, consultation has taken place. He also asked whether a trustee should benefit from his position. It is accepted that propriety must always be observed. If a subject is to be discussed in which a trustee has an interest that must be declared.
The noble Lord, Lord Armstrong, and many other noble Lords referred to the museum's financial state. Since 1978–80, the Government's grant to the Victoria and Albert Museum for running costs has increased substantially in real terms. The allocations which the Minister for the Arts announced last

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November, rolling forward the three-year settlements to 1991–92 will give the Victoria and Albert Museum a grant-in-aid totalling £24 million, including increases to help the museum to deal specifically with its priority concerns in the management of the collections and in the maintenance and refurbishment of the building.
My noble friend Lord Eccles, who has a very distinguished past in the world of the arts, said that some other museums have made substantial changes to their organisations. He is right. The National Maritime Museum and the Science Museum are two of the most recent examples.
Training courses were mentioned by the noble Lord, Lord Annan. There are currently major developments in museum training. Key skills and competencies are being identified for all members of museum staff. The Minister for the Arts recently announced the establishment of a museums training institute, a subsidiary of the Museums Association.
The noble Lord, Lord Gibson, asked who would be responsible for loans. Decisions on loans will be taken by the registrar's department, which will be largely staffed by curators. Staff in curatorial departments will be consulted.
The noble Lord, Lord Armstrong, made a statement on the fact that voluntary redundancy terms had to be offered first. I think he said that the Government gave this advice. In point of fact the advice was given by the Treasury Personnel Policy Group. These are the experts in dealing with such matters.
I listened with interest to the words of the noble Earl, Lord Perth, concerning the commission. Equally, on the same subject, both my noble friend Lord Rees and the noble Lord, Lord Armstrong, made their stance clear. It is of course a matter for the trustees to decide.
The noble Baroness, Lady Birk, asked how the replacement trustee would be chosen. The trustees of the Victoria and Albert Museum, as noble Lords know, are appointed by the Prime Minister. The Government pay close attention to the needs and wishes of the museums in making trustee appointments.
I believe that the noble Lord, Lord Kennet, is absent, and it is to him that I address the last word in answer to his question. I can only emphasise what my right honourable friend has said in another place. Her Majesty's Government have every confidence in the director and trustees of the Victoria and Albert Museum and fully support their objectives in restructuring the museum.
Lord Hutchinson of Lullington: My Lords, before the noble Baroness sits down, could she answer the question I put to her? It concerned the total sum that the redundancies have cost the Government and the figure which I mentioned and which has been mentioned publicly of £1.75 million. Is that correct or not?
Baroness Trumpington: My Lords, I do not think it would be very productive for me to go into those details so late at night. I shall therefore write to the noble Lord.
Lord Armstrong of Ilminster: My Lords, if I may intervene, the figure is not familiar to me but I think it includes all costs after the normal age of retirement, if it is a real figure. If that is the case, of course those costs would be incurred anyway; these are the pensions that would be payable anyway after the age of 60. I do not think they come into the calculation of the cost of early retirement.
House adjourned at one minute before eleven o'clock.