Lords Sitting of 11 December 1990

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

NHS Hospitals: Security Arrangements
Lord Auckland Lord Auckland asked Her Majesty's Government:
What measures they have in mind to improve security arrangements in National Health Service hospitals.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, the Government are gravely concerned about recent attacks on patients and staff in hospitals and we must be prepared to draw lessons from such incidents. Local management is and must be responsible for security arrangements at health service premises. This Government first asked local health authorities to develop a security strategy in 1982. Guidance in the form of the NHS Security Manual first issued in 1984 is currently being updated with government funding.
Lord Auckland: My Lords, I thank my noble friend for that Answer which is only partially satisfactory. I declare my interest as the president of the friends of my local district hospital. Will central funding be made available for that very real problem which is of nationwide significance? Consequent upon that, is sufficient vigilance given regarding security people employed at local hospitals? Is the noble Baroness aware that at one hospital not far from where I live a 19 year-old was allegedly in charge of security? Will she ask her right honourable friend to look into those very real problems, while realising that hospitals with large grounds have problems? Will the Minister look seriously into those problems?
Baroness Hooper: My Lords, I am grateful to my noble friend for raising this topic. We are very seriously looking into the whole issue because there are particular problems. By their very nature hospitals should be accessible and policy has been directed at, for example, liberalising hospital visiting arrangements, particularly with regard to children.
Clearly, we cannot turn hospitals into fortresses; but there is no doubt that local managements are now fully aware of the need to provide the highest possible level of security commensurate with that freedom which is expected by staff and patients. In the light of recent tragic events, managers are reviewing procedures. It must be a matter for local managements, which are in the best position to decide what are local needs, to be responsible for that very important matter.
Lord Molloy: My Lords, is the noble Baroness aware that many of the health service associations agree that the Government are concerned about this matter? However, they feel that it is now necessary for
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the Government to implement their recommendations, which have been accepted, and that more funds are needed so that security officers are properly trained and know exactly with whom they should liaise in the hospital for which they are responsible.
Baroness Hooper: My Lords, I assume that the noble Lord is referring to the report on violence to staff which was chaired in turn by my noble friends Lady Trumpington and Lord Skelmersdale, the recommendations of which were accepted by the Government particularly in relation to staff training. We are fully aware of what is needed in that respect and we are certainly looking at the situation to ensure that procedures are being carried forward. The use of professionals in this sphere is becoming more and more important.
Baroness Robson of Kiddington: My Lords, does the Minister agree that we are right to be deeply anxious when patients and young children are attacked in hospital wards? While we are all in favour of greater security, can the Minister assure us that those attacks did not take place because of staff shortages and no supervision in the wards?
Baroness Hooper: My Lords, I am grateful to the noble Baroness for raising that point because in none of the incidents reported has it been suggested that staff levels were in any way to blame. For example, when the St. Helier hospital incident affecting a young child took place on 14th October, the normal level of staffing was present on the children's ward for a Saturday evening; namely, two nurses for five patients. Normally the doors and windows of the children's ward are kept locked during the night, but at that moment the doors had been opened for a few moments to admit an emergency. That is when the lapse occurred.
Lord Mason of Barnsley: My Lords, can the Minister say to what extent security was a factor in the recent killing of the two surgeons at Pinderfields Hospital?
Baroness Hooper: My Lords, the murder of the two consultant plastic surgeons was a most appalling incident. My honourable friend the Secretary of State called for a full report, and we shall need to examine that. A summary report was prepared immediately, the following day. However, the police in question said that nothing physically could have been done to improve the security in that situation.
Lord Taylor of Blackburn: My Lords, the question that the Minister has not answered relates to central funding which is vital to the whole matter. Each authority is anxious to obtain as much security as possible. Are the Government prepared to make extra moneys available for that purpose?
Baroness Hooper: My Lords, we all know the arguments regarding central funding and the desire of noble Lords opposite to obtain earmarking on all possible occasions. This is the kind of situation for which local management is responsible. As a result of the last public expenditure round more funds will be

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available for devolution to local level. It is important that local management uses those funds in the best possible way to meet local needs.
Baroness Masham of Ilton: My Lords, is the Minister aware that in St. James's Hospital, Leeds, last week a woman was raped in the night? Many hospitals are very big. Would it not be a good idea to install panic buttons connected to a central point so that offenders could be caught?
Baroness Hooper: My Lords, as I said, the position is being reviewed. I am aware of the incident at St. James's Hospital. Again, it is another deplorable incident. I am also aware that in many hospitals panic buttons are already installed partly as a result of the publication of the National Health Service security manual, which is under revision. A special conference on security is also due to take place. It was called by the National Association of Health Authorities and Trusts to review the position. Local managers are reviewing the situation, and I feel sure that panic buttons will be discussed. Referring to the specific incident, there is no doubt that the alarm call was given almost immediately by the nurse involved.
Baroness Faithfull: My Lords, can my noble friend say how many hospitals employ outside contractors as security officers, and how many security officers are permanent members of staff? Would the Minister agree that staff have a greater sense of responsibility and loyalty to a hospital when they are permanent employees?
Baroness Hooper: My Lords, as I said earlier, it is obvious that the business of security is becoming increasingly professional. I am afraid that the cosy days of caretakers keeping an eye on things are long past. The department encourages health authorities to consider competitive tendering for a wide range of non-clinical support services, including security. In that regard we believe that outside contractors can be as efficient as if not more efficient than in-house security arrangements.
Lord John-Mackie: My Lords, has any survey been made by any party to ascertain whether there is any pattern to these extraordinary assaults in hospitals? It is the most strange place one can think of for assaults to take place. If there is a pattern it could perhaps give guidance as to the kind of security required.
Baroness Hooper: My Lords, it is difficult. It appears to be a self-generating matter. The more incidents there are, the more publicity is given to them and unfortunately the more people are attracted to commit these crimes. As yet no final analysis has been made.
Lord Ennals: My Lords, I am sure the Minister accepts that there is a great deal of concern in the country regarding so many different kinds of violence leading to death caused either by self or by murder. I believe I heard the Minister's honourable friend Mr. Dorrell say this morning that the department was setting up an inquiry in this regard to make recommendations. I thought that I would recommend that. Is it not something that the department should
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urgently do? Finally, would the Minister accept that the idea that security could best be carried out by outside contractors is one that many people on both sides of the House gravely doubt?
Baroness Hooper: My Lords, whatever means are used to implement a security strategy, the important point is that responsibility lies with the local health authority, which is in the best possible position to know and cope with local needs. There is a variety of responses at both central and local level to the recent spate of incidents. There is no doubt that the whole situation will be thoroughly examined.
Lord Ennals: My Lords, is there to be an inquiry set up, as I believe Mr. Dorrell suggested this morning?
Baroness Hooper: My Lords, the programme to which the noble Lord, Lord Ennals, refers, which he no doubt heard on the radio this morning, was in regard to mentally ill people. The inquiry to which my honourable friend referred related, I believe, to former psychiatric patients.
The Countess of Mar: My Lords,—
The Minister of State, Home Office (Earl Ferrers): My Lords, perhaps I may interrupt for a moment. We have already spent 11 minutes on the first Question. I think that prudence suggests we move on even though, as the noble Lord, Lord Ennals, said, it is an important Question. The normal arrangement is that we allow 20 minutes for four Questions. Ten minutes for one Question is perhaps sufficient. Perhaps the noble Countess would like to ask her question and we can then move on.
The Countess of Mar: My Lords, what advice would the noble Baroness give to area and district health authorities which are shutting beds because they cannot meet budgets for this year, and at the same time are being asked to increase their security arrangements? Where will the funds come from? Perhaps more bed closures?
Baroness Hooper: My Lords, the noble Countess emphasises the point I made previously, that it is extremely important that local health authorities should decide on their own priorities.

World Peace Council: Control
2.50 p.m.
Lord Orr-Ewing Lord Orr-Ewing asked Her Majesty's Government:
Whether they have any evidence to suggest that in 1981 and 1982 the World Peace Council and the British Peace Assembly were controlled by the Soviet Communist Party and supported the suppression of democracy in Eastern Europe and Afghanistan.
Lord Reay: My Lords, Ministers have often expressed the view that, from its inception in 1950, the World Peace Council has been a disguised instrument of Soviet policy. A KGB defector recently confirmed that under Brezhnev, the council faithfully followed the directions of the international department of the Soviet Communist Party Central Committee. A senior

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WPC official admitted in 1989 that some 90 per cent. of the council's funds came from a single source, the Soviet Peace Fund.
Lord Orr-Ewing: My Lords, is not my noble friend somewhat surprised that, in view of that, the CND has appointed as the new general secretary from January next year Mr. Gary Lefley, who was the communist national organiser of the British branch of the World Peace Council just before Mr. Gorbachev came to power?
Lord Reay: My Lords, I understand that Mr. Lefley was and may remain a member of the Communist Party and that he was a candidate for the national executive of the Communist Party of Great Britain in December 1983. However, it is not up to me to comment on his fitness for the post of general secretary of the Campaign for Nuclear Disarmament.
Lord Cledwyn of Penrhos: My Lords, while I do not dispute any of the facts given by the noble Lord in his reply, and in view of the great and welcome changes which have taken place in Eastern Europe and the Soviet Union since 1981, perhaps I may ask him whether he does not agree that this question is not relevant in any way. Does he not further agree that it is far more important that we should co-operate with our allies in sustaining Mr. Gorbachev and the emerging democracies of Eastern Europe rather than indulging in a witch hunt of this kind?
Lord Reay: My Lords, I do not think that we should indulge in a witch hunt. However, the World Peace Council is continuing its activities and it is that organisation which is living in the past.
Lord Beloff: My Lords, does not the Minister agree that there is no question of a witch hunt? We are talking about an organisation of which it is said that many honourable Members in another place are members. That organisation has replaced an unfrocked priest by an unmasked agent. In those circumstances, does the Minister not agree that it is right to call attention to its activities?
Lord Reay: My Lords, I think it is perfectly proper.
Lord Jenkins of Putney: My Lords, is it not the case that we are now in 1990 and not 1982? Will the Minister remind the noble Lord, Lord Orr-Ewing, that recently the President of the USSR received the Nobel Peace Prize; that East Germany is part of a country which is a member of NATO and that in all the circumstances we should leave these matters where they properly stand and not spend a great deal of time digging up irrelevant nonsense about the past?
Lord Reay: My Lords, I agree that our relations with the Soviet Union have never been better. We look forward to the prospect of more co-operative relations in the future. However, the immense changes that have taken place in Europe came about because we were resolute and strong in our defence and not through the activities of CND.
Lord Orr-Ewing: My Lords, perhaps I may refer to what has been said by noble Lords on the Benches opposite. Surely we should not shut our minds, ignore our ideas and turn our faces from the facts. Currently, the Soviet Union is building two or three times as
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many tanks, aircraft and ships as the free world. It is also very active in subversive organisations. Does not the Minister agree that the more people who know that, the better it is for the future of our country?
Lord Reay: My Lords, I agree with my noble friend. It is entirely proper that these matters are brought to light. I also agree that times have changed. I see no reason why the World Peace Council should continue its activities.
Lord Dean of Beswick: My Lords, is the Minister now saying that in future the Government will answer at the Dispatch Box for other associations and organisations whether political or non-political and for which the Government have no responsibility? If the Minister is saying that, it is a break with tradition both in this House and in the other place.
Lord Reay: My Lords, if the noble Lord has other organisations in mind he should try and see.
Lord Grimond: My Lords, while I recognise that questions asked in the Chamber go far wider than some of us are accustomed to, and while I fully accept that it is perfectly proper to draw attention to the activities of these bodies, perhaps I may ask the Minister whether he agrees that the Government have no possible responsibility for them. Does he further agree that it would be very undesirable if the Government sought to interfere with them?
Lord Reay: My Lords, the Government see their responsibility as combating the activities of CND, among other organisations.

The Gulf
2.55 p.m.
Lord Annan Lord Annan asked Her Majesty's Government:
What direct financial contributions have been made by the Federal Republic of Germany and Japan to the costs of maintaining British forces in Saudi Arabia.
Lord Reay: My Lords, none. However, Chancellor Kohl recently made an offer of equipment, training support and military air transport assistance within the NATO area which my right honourable friend the then Prime Minister welcomed. The Japanese Government have announced a contribution of 2 billion dollars to assist the multinational forces in Saudi Arabia. We hope that some of this money can be made available in support of British forces.
Lord Annan: My Lords, I thank the noble Lord for that Answer, but does he not agree that because we are now spending £3.5 million a day on our forces, direct contributions should be made by countries which are debarred by their own constitutions from sending forces to the Gulf? Does not the Minister agree that those countries should therefore subsidise our forces directly? Does the Minister recall that in the 18th century Frederick the Great received from this country subsidies which were very useful indeed in restraining the French?
Lord Reay: My Lords, the noble Lord wishes to take me back even further than I was drawn on the

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previous Question. I shall not follow him as regards the last part of what he said. A substantial package of assistance from the Germans has now been drawn up. I hope that some of the detail will be announced later today. Final budgetary approval is currently being sought from the Japanese Parliament. Once that has been agreed, funds will be transferred to the Gulf Co-operation Council which will then allocate it to meet the costs of those countries which are contributing troops.
Lord Cledwyn of Penrhos: My Lords, the noble Lord, Lord Annan, referred to a cost of £3.5 million a day. Can the Minister confirm that that has been the average cost since 2nd August? Can he also say what the estimated cost will be after 15th January?
Lord Reay: My Lords, I have no figure for the estimated cost after 15th January. I can confirm that the current daily cost is around £3.5 million.
Lord Monkswell: My Lords, given that the Government have sent armed forces to the Middle East in support of United Nations resolutions, can the Minister advise us whether any request for financial assistance has been made to the United Nations?
Lord Reay: My Lords, I believe the noble Lord is asking me what further financial assistance has been made towards the United Nations. Apart from financial assistance in support of the international military effort, substantial economic assistance has been given by Germany and Japan, the two countries concerned in this Question. That assistance has been given to the countries most badly affected; namely, Jordan, Egypt and Turkey. The sums involved are quite substantial and meet our objective that countries not making a major contribution to the multinational force should provide the bulk of economic assistance to the countries affected.
Lord Monkswell: My Lords, I believe that the Minister misunderstood the question. If our troops are in the Middle East in support of the UN's position, why are we not asking for financial assistance from the United Nations?
Lord Reay: My Lords, I am not sure that I know the answer to that question. This Question is specifically on the issue of contributions made by Germany and Japan and I have sought to answer that.
Lord Annan: My Lords, can the Minister say whether the Foreign Office is pressing this point? One of the reasons it is difficult to reduce inflation in this country is precisely the great additional burden which our country agreed to carry. Does not the Minister agree that the other countries which are debarred from carrying that burden should contribute directly to our costs?
Lord Reay: My Lords, the noble Lord again makes very forcefully a very good and strong point. I have nothing further to add to what I said. Germany is providing a substantial package of assistance and further details about it will be announced shortly. We also hope that we shall be able to benefit from the large sum of money which is being allocated by Japan.
Lord Renton: My Lords, is it not a fact that Germany and Japan would be among the countries with most to lose if Saddam were to succeed?
Lord Reay: In common with the rest of us, my Lords.

Police: Rostering
3 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What steps are being taken to implement the provisions of the report on police working patterns.
Earl Ferrers: My Lords, proposals to amend police regulations, in order to make provision for more flexible rostering and shift patterns, are shortly to be considered by the Police Negotiating Board.
Lord Molloy: My Lords, I thank the noble Earl for that encouraging reply, especially as the report's proposals on performance measurement and efficiency checks on police throughout the country have been welcomed by senior police officers. I am sure that senior police officers would endorse what the noble Earl has said. These steps will provide an opportunity for the police to improve themselves and to have better representation made on their behalf to the general public.
Earl Ferrers: My Lords, I am grateful to the noble Lord for that statement. I do not think it requires an answer as it was not a question.
Lord Richard: My Lords, I apologise to the noble Earl for croaking at him this afternoon. Has he decided which seven police forces will take part in the experiment in relation to the Cullen report? As I understand the position, the report, which was drawn up by a Home Office police research unit, recommended flexible working. The Home Office has apparently said that seven police forces will take part in an experiment to make better use of staff. Has the noble Earl chosen the seven police forces?
Earl Ferrers: My Lords, this is a quite complicated issue. It was discussed at the Police Advisory Board the other day and will now have to be discussed at the Police Negotiating Board. My right honourable friend is deciding how best to progress the discussion on the principle of more flexible rostering. It is a complicated issue. I cannot give the noble Lord the answer which he seeks.
Lord Molloy: My Lords, does the noble Earl agree that people who suffer burglaries should be better informed as to what progress the police are making in recovering what has been stolen? Does he further agree that there is a need to have better community relations between the police and the general public? Is that not part of the report which the Home Office should implement?
Earl Ferrers: My Lords, I agree that it is important that people should be given more information about burglaries. I agree also that there should be better community relations. The main onus of the report concerns how better to roster police time so as to use it more efficiently in order to benefit the police and the

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managers. As an example, chief constables currently have to let officers know their leave times 12 months in advance. That is a fairly antiquated system.
Baroness Seear: My Lords, does the noble Earl agree that it might be a waste of time to ask the police to tell people who have been burgled the progress in finding the loot? After all, either the police have found it or they have not. As someone who has been burgled 18 times, I do not want to be told by the police over and over again that they have not found my property.
Earl Ferrers: My Lords, I am sorry to hear of the noble Baroness's terrible experience. If she had such an experience and the police found the burglar she would no doubt be delighted to know that they had found her property.

Select Committees
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Lord Privy Seal (Lord Waddington) be appointed a member of the Committee of Selection and the Committee for Privileges in the place of the Lord Belstead and that he be added to the Select Committee on House of Lords Offices and the Select Committee on Procedure of the House.—(The Chairman of Committees.)
On Question, Motion agreed to.

Census (Confidentiality) Bill [H.L.]
3.4 p.m.
Baroness Hooper: My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Baroness Hooper.)
On Question, Motion agreed to.
Baroness Hooper: My Lords, I beg to move that the Bill do now pass.
As the House will be aware, this short Bill reinforces the protection which the Census Act 1920 affords to the confidentiality of census information. We are therefore keen to see it enacted in time for the census which is to be taken on 21st April next year. I am pleased that the Bill has passed through all its stages in your Lordships' House without amendment. I wish to thank noble Lords for enabling it to make such speedy progress.
Moved, That the Bill do now pass.—(Baroness Hooper.)
Lord Ennals: My Lords, as my noble friend Lord Carter said at Second Reading, and as the Minister said just now, this is a non-contentious Bill—so much so that the Bill has reached Third Reading without amendment. I wish that all our Bills could be dealt with in that way.
I thank the noble Baroness for her letter in reply to a query which was raised by my noble friend on Report. It gave assurances that there would be protection against identifying individuals or groups
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from a combination of characteristics in census statistics for local areas. I am fully satisfied by those assurances. However, I wish to raise one matter which has been brought to my attention. Clause 1(7) (iii) might prevent the inputting of information about individuals from aggregated census statistics. It is open to that interpretation. Unfortunately, it is unclear whether the Bill extends its range to cover those bureaux which are licensed by the OPCS to analyse and disseminate census statistics in the commercial area. It is possible, though not clear, that Clause 1(2) (a) covers such bureaux. I should be grateful if the noble Baroness would answer that point.
Baroness Hooper: My Lords, I believe that the matter to which the noble Lord refers is covered by Section 4 of the Census Act 1920 and is not covered by the Bill before the House. Section 4 is the lawful authority for releasing these statistics. When the tables are designed, the census offices take every practicable step to minimise any risk of disclosure from those statistics of information about identifiable individuals. The bureaux to which the noble Lord refers receive only aggregated statistics under Section 4. No information from completed census forms about identifiable individuals leaves the census office for 100 years.
Lord Ennals: My Lords, I am grateful for that reply.
On Question, Bill passed, and sent to the Commons.

Statutory Sick Pay Bill
3.8 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, I beg to move that the Bill be now read a second time.
This is a very short Bill. It has only three clauses and deals solely with the arrangements under which employers can currently recover from their remittances of national insurance contributions the whole of the statutory sick pay which they pay out to their employees when sick. I shall of course come to the precise provisions in the Bill during the course of my speech but first of all it may be helpful to the House if I say a few words about the background to the Bill, which forms part of the Government's proposals for the restructuring of statutory sick pay—for simplicity, I shall refer to it as SSP—which began last year.
When SSP was first introduced there were naturally apprehensions about the impact of the scheme on the part of both employers and employees but it is fair to say that SSP has been largely a success story. Employers quickly assimilated SSP within their normal payroll arrangements and most operate the arrangements with very little difficulty. I accept that smaller employers who have to operate the scheme less frequently may on occasion find it more difficult. That is something which has concerned me in particular as the Minister in the Department of Social Security with

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responsibility for deregulation. But I am pleased to say that a number of initiatives have been taken over recent years to assist such employers with improved guidance and training.
At the same time occupational sick pay coverage has continued to grow. Research carried out for the department in 1988 showed that 91 per cent. of employees—that is 20 million of the workforce—now work for employers who have occupational sick pay. That is an impressive figure. It reflects—in the Government's view quite properly—the acceptance by employers of much greater responsibility to cover short-term sickness among their employees.
Of course, not everyone is covered. Some new employees under particular schemes may have to serve a qualification period before becoming eligible. Those employees who do not, as yet, have any occupational sick pay cover tend to be mainly people in low paid or part-time employment. The Government have recognised this in the uprating proposals which I will come to in a moment.
There is no doubt that the growth of occupational sick pay schemes now means that for the great majority of those in work, the rates of SSP bear little or no relation to the amount they actually receive when sick. It is right that the Government should take account of this in the future development of the scheme and in considering the distribution of available resources within the social security system as a whole.
I turn now to the actual proposals announced by my right honourable friend the Secretary of State in his Uprating Statement. There are two elements in these proposals: the first concerns the reimbursement arrangements for employers, which is the subject of this Bill; and the second concerns the changes in the rates and earnings threshold for SSP, which will come before the House in due course when the main benefit uprating package is debated early in the new year.
As noble Lords will know, there are two rates of SSP. The lower rate currently goes to those employees whose average weekly earnings are between £46 and £125. The Government intend to increase this rate by the full RPI increase of 10·9 per cent. from £39·25 to £43·50 a week. This recognises that low paid and part-time workers on this rate are less likely to have occupational sick pay.
At the same time the dividing line between the two rates will be raised to cover the whole range of earnings bands within which employers pay the lower rate of contribution. This currently covers employees earning less than £175 a week, but will increase to £185 a week from April 1991. Finally, it is proposed that the higher rate of SSP will remain unchanged at £52·50 a week. Subject to parliamentary approval, these changes will take effect from 6th April 1991. These changes will reduce public expenditure by £100 million in 1991–92. But I should like to emphasise that the vast majority of employees will experience no reduction in the total payment they receive when sick. That is because of the way occupational sick pay interacts with SSP.
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I shall now deal with the provisions in the Bill. It may be helpful to noble Lords if I first explain how the reimbursement arrangements work. They are very simple. Employers deduct from their regular monthly remittances of national insurance contributions to the Inland Revenue the gross amount of SSP which they have paid to their employees. If the total of contributions due is less than the SSP recoverable, the employer can similarly adjust his payment of PAYE tax. Since April 1985 an employer has also been able to recover in the same way an additional amount by way of compensation for the cost of the national insurance contributions payable on the SSP itself. This amount is fixed each year and is currently 7 per cent. of the total SSP paid.
I turn now to the precise proposals in the Bill. All the substantive provisions are in Clause 1. Clause 1(1) reduces the amount of SSP which employers can recover—by the method which I have just described —from 100 per cent. to 80 per cent. Clause 1(2) enables the percentage to be varied by order and Clause 1(3) brings to an end the additional 7 per cent. compensation rate. Of the two remaining subsections in this clause, the first provides for regulations to enable employers to round the amount to the nearest penny and the second makes a consequential amendment to the 1975 Act relating to the transfer of funds between the Consolidated Fund and the National Insurance Fund. Clauses 2 and 3 deal with consequential and supplementary matters.
As indicated in the Explanatory and Financial Memorandum to the Bill, the change from 100 per cent. to 80 per cent. reimbursement will result in public expenditure savings of £181 million in 1991–92, rising to £190 million and £197 million in the following years. The end of the 7 per cent. compensation rate will increase income to the National Insurance Fund by £71 million, £75 million and £78 million in each of the three respective years.
The main comments on the Bill have not unnaturally centred on the effect on employers. But before coming to these I want to emphasise that the changes in the Bill will have no effect on employees. The Bill does not change an employee's entitlement to SSP in any way.
In considering the effect on employers it is important to look at the SSP changes in the context of the proposed reductions in national insurance contributions—which I will come to shortly—which go a long way towards offsetting any additional cost to employers of the reduced reimbursement arrangements. But first of all, I wish to deal with the charge made in some quarters that the Government have in some way reneged on a previous agreement. I certainly acknowledge that the method of reimbursement was a major factor in the discussions which took place with employers and their organisations before SSP began in 1983. Employers' organisations—including the small business interests—pressed strongly for full reimbursement. I accept that, in the face of having to take on a completely new and untried commitment, this was an entirely reasonable approach. After detailed discussions the Government accordingly agreed to the

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present 100 per cent. recovery system at the outset of SSP. But I believe it is equally reasonable, now that employers have been successfully operating SSP for nearly eight years and in the light of developments in occupational sick pay, that the Government should take a fresh look at the arrangements. That is what we are new doing.
Some employers have argued that it is not their place to provide short-term sickness cover for their employees. The Government cannot accept this; indeed all the evidence about the growth of occupational sick pay points in the opposite direction. I recognise, of course, that this may not be so easy for the small employer as for major companies. But even where smaller employers do not operate formal schemes, they often make discretionary payments or continue full pay for short spells of sickness.
One matter which has particularly worried business is that, the Government have some deep-laid plan to make progressive reductions in the percentage rate in the future. I can assure the House that the Government have no plans at this time to make further changes. We have, however, noted the concern on this point and my right honourable friend has undertaken that, should any order reducing further the reimbursement rate be brought forward—and, as I have said, we have no such plans—this would be subject to the affirmative resolution procedure. I shall be bringing forward an amendment to that effect in Committee.
I turn now to the ending of the 7 per cent. compensation rate. This is intended to compensate employers for the cost of the national insurance contributions they pay on SSP itself. But it has been of only limited success. Despite widespread publicity, about 25 per cent. of this additional compensation is unclaimed. Moreover, in the interests of simplicity it is available on all SSP paid, even where the total payment is below the lower earnings limit and would not, therefore, have attracted liability for national insurance contributions. This is not a sensible arrangement and is why we have included it within this package of SSP changes.
The Government appreciate the concerns expressed by some employers and their organisations about the costs to them of the SSP proposals. Indeed my right honourable friend and myself recently met representatives of both the Confederation of British Industry and the National Federation of Self-Employed and Small Businesses to discuss the proposals. But let me try to put these costs into perspective. The reduction to 80 per cent. reimbursement from what is in effect 107 per cent. will cost £250 million. While that is not an inconsiderable sum, it represents only a tiny proportion—not much more than 0·05 per cent.—of the labour costs over the economy as a whole, which are running at well over £300 billion a year.
The precise effects on individual employers will, of course, depend on the level of sickness experienced in their workforce; but the implications generally are not expected to be significant. It should be remembered
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that although SSP is payable for 28 weeks, the average spell of sickness lasts only three weeks. In 90 per cent. of cases, sickness is over within eight weeks.
Nevertheless, side by side with that package of SSP changes, the Government propose to make substantial reductions in employers' national insurance contributions liability. Although those reductions extend across the whole spectrum of national insurance contributions, they have been particularly weighted to help smaller employers.
It is proposed that the standard rate of contribution payable by employers will be reduced from 10·45 per cent. to 10·4 per cent. and the lower rates of 5 per cent., 7 per cent., and 9 per cent.—which currently apply in respect of employees earning up to £175 per week—to 4·6 per cent., 6·6 per cent., and 8·6 per cent. respectively. Those changes will reduce employers' costs by some £250 million, and, as I said earlier, should be particularly helpful to smaller employers, whose employees are likely to be among the less highly paid. For employees earning £70, £120 or £170 a week the employers' weekly national insurance contribution will reduce by 28p, 48p and 68p respectively.
From the discussions we have had, and representations received, it is clear that not all employers have appreciated the significance of those reductions, and it may be helpful if I give one or two examples. If we take an employer with five employees all earning £170 per week, and one employee had three weeks' sickness during the year—which matches the average incidence of sickness—the extra cost in SSP would be £82·41 assuming the employer makes good the difference between the higher and lower rate of SSP with occupational sick pay. But the annual saving to the employer on his national contribution liability as a whole would be £176·80, putting him £94·39 in profit. Even if the same employer had a further employee, also sick for three weeks, he would still make a saving of £11·98. If we look at an employer with 20 employees, again all earning £170 per week, who had four employees off sick for three weeks each, the annual saving would be £377·56.
I do not wish to give the impression that the employer will always come out on top. Clearly, the net effect of the proposals cannot be neutral for all employers. There will be variations depending on individual levels of pay and sickness. For example, the contribution reductions are not so advantageous in respect of employees earning £185 or more a week. But, particularly for small employers, they go a considerable way towards offsetting the costs of the SSP changes and in some cases will more than fully offset them.
As my right honourable friend the Secretary of State made clear both in his up-rating Statement and in the debates on the Bill in the other place, the Government firmly believe that it is better for available resources from the taxpayer to be concentrated on those least likely to have occupational provision or on other areas of social security for which employers cannot provide. That is what we

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have sought to do in the overall SSP package we are now proposing, an important part of which is included in the Bill. I commend it to the House. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Henley.)
3.24 p.m.
Lord Carter: My Lords, the House is grateful to the Minister for his clear exposition of the Bill. But the thanks from these Benches and, I suspect, from other parts of the House stop there. The Bill may, as he said, be one of the shortest of the Session; it is certainly the meanest we shall have to consider. Indeed, the Bill may constitute something of a record. It has three clauses only, yet it has encountered the unanimous opposition of the CBI, the Forum of Private Business, the National Federation of the Self-employed and Small Businesses, the Low Pay Unit, the Disability Alliance, the TUC, the National Association of Citizens Advice Bureaux, the Retail Consortium, the National Farmers' Union, the Building Employers Federation, the Association of Independent Businesses, the Institute of Directors, and the Union of Independent Companies. And that is only today's post!
Similar proposals in an earlier Bill were strongly criticised by the Social Security Advisory Committee. However, the committee was unable to comment on this Bill as it was rushed through the other place with one day only between its Second Reading and its Committee stage and Third Reading. The Government allowed just three weeks between the publication of their proposals and the Bill completing all its stages in another place with, as I understand it, no consultation at all with outside bodies before publication.
The Bill's purpose is clear. As the CBI has said, it contains a fundamental reform of the current partnership between the state and employers in delivering an important social security benefit. It undermines the basis of the agreement between employers and the Government on the administration of the statutory sick pay scheme. I was surprised to hear the Minister say that the Bill would have no effect on employees, because the up-rating associated with it removes 3 million employees from eligibility for the higher rate of statutory sick pay. As a result, some 600,000 people stand to lose an average of £9 per week while sick. Those 600,000 are in addition to the 300,000 who lost £13 a week as a result of the changes in sick pay entitlements from April this year. No fewer than 5 million people have had their entitlement to SSP reduced in the past two years.
All this is happening because the Government are relying upon employers to make up the difference, without knowing how many employees are covered by occupational sick pay schemes. The Minister for Social Security and Disabled People, Mr. Nicholas Scott, on Second Reading in another place on 26th November said:
"We do not know exactly how many people are covered by sick pay schemes" —[Official Report, Commons, 26/11/90; col. 708.]
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The Minister referred to the statistics contained in a 1988 survey showing that 91 per cent. of the workforce work for employers who provide some occupational cover. That does not mean that 91 per cent. of the workforce are covered. Let me take a simple example —a company has 100 employees but its sick pay scheme has exclusion clauses to omit part-time workers or includes a requirement for a qualifying length of service. One could well find that half the employees only are eligible for the scheme although 100 per cent. of the employees work for a firm that has a sick pay scheme.
We know that 55 per cent. of firms with fewer than 10 employees have no scheme and that 96 per cent. of all businesses employ fewer than 20 people. More than 10 million workers may not be fully covered by occupational sick pay schemes.
Why have the Government introduced the Bill? The answer is simple. It was given by the Secretary of State for Social Security, Mr. Newton, on Second Reading in the other place. He said:
"The proposals were developed during the public expenditure round that led to my uprating statement on 24 October. They were examined in terms of the context, pattern and the priorities of social security expenditure as a whole" —[Official Report, Commons, 26/11/90; col. 644.]
In other words the Chief Secretary to the Treasury must have told the Secretary of State that if he wanted some money to increase child benefit and help the disabled, he would have to make savings elsewhere in his budget. The savings are clear: £100 million in 1991–92 from failing to uprate the higher rate of SSP and by reducing the numbers eligible for the higher rate—a government technique for helping to finance improvements in some benefits by penalising, in this case, the low paid, especially women, who are off work through sickness. It has been estimated that 60 per cent. of all losers will be women. I fear that there is nothing new in that technique. Of the £26 billion that has been given away since 1979 in higher rate tax cuts, no less than £22 billion has come from pensioners by breaking the link between earnings and pensions.
While on that point, it is worth remarking that so long as the up-rating of SSP is linked to the retail prices index and the eligibility threshold is linked to earnings, it is a matter of simple logic that SSP will become a smaller and smaller proportion of the earnings lost through sickness. As a result, more people will become dependent on means-tested benefits. I said earlier that 60 per cent. of all losers would be women. It has been suggested that this could be regarded as discriminatory and might be contrary to Community law.
Why do we have to have a Bill to save the Government £100 million? The saving could have been achieved simply by adjusting the up-rating and changing the earnings threshold —all done through regulations and orders. The answer is simple. It appears in Clause 1(2) and Clause 2(3). The Government have taken the power to reduce employers' reimbursement of SSP from 100 per cent.

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to 80 per cent., as the Minister said. Then they take the power to make all further adjustments which are bound to be downwards, by regulation or order.
A multitude of employers' organisations are concerned—rightly—that exactly the same thing will happen with statutory sick pay as happened with redundancy rebates. This year, the cost to employers of £258 million will be met by reducing employers' national insurance contributions by £250 million. These are the global figures. The incidence will vary greatly between individual employers and will bite particularly hard on smaller employers.
The Government have refused to undertake that future reductions in employers' reimbursements will he matched by corresponding reductions in national insurance contributions. The Minister for Social Security and Disabled People, Mr. Scott, made it clear at column 703 on 26th November, replying to a Question regarding the linkage between reimbursement of payments by employers and the level of national insurance contributions. He said:
"These are two quite separate matters. As my right hon. Friend said, this year we are considering the changes in the context of reductions to be made in national insurance contributions. The two, however, are not linked. The only statutory duty that my right hon. Friend has when looking at the national insurance fund is to consider the incomings and outgoings from the fund and to decide what changes may be necessary".
At column 704, he said:
"I have already said that we have no plans to alter, either up or down, the rate of reimbursement for statutory sick pay".—
that is after the reduction from 100 per cent. to 80 per cent.—
"This year we have looked at the proposed changes in the light of reductions in national insurance contributions. We should have to see where we were if we ever wanted to consider changing the rate of reimbursement either up or down".
That quotation gives the game away completely. The Minister was careful to say that the Government had no plans at this time to change the relationship between reimbursement and national insurance contributions.
I fear that deep down the Government—or at least the Government so recently espoused of Thatcherite principles—just do not believe that the state has a primary responsibility for sick pay. They see it as simply another example of a public service which could be better done by private insurance. I wish to ask the Minister whether he agrees that the state has an obligation to the sick and that the Government should not seek to shift that responsibility to employers who already have to carry a fair proportion of the cost of sickness. Of course, as the Minister said, they tried this once before in 1980–81 and had to retreat in the face of considerable opposition from employers' organisations. The Government have certainly learnt from that experience. This time the Bill is being rushed through without consulting outside organisations, the Social Security Advisory Committee or the department's internal advisory committee.
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I appreciate that it is the convention in this House that Bills should not be denied a Second Reading. However, I urge the Minister and his department to think very hard between now and Committee stage to see whether the worst aspects of the Bill and the associated changes in benefits can be lessened. Many organisations have asked for the Bill to he withdrawn while consultations take place. Will the Minister agree to this? After all, we see a positive epidemic of perestroika and glasnost emanating from the new Prime Minister and his Cabinet. Ministers are tripping over each other to distance themselves from the policies they were so loyally defending only three or four weeks ago. Surely this Bill is a good example of just the sort of hasty and ill-considered legislation which should now be the subject of—to coin a phrase a fundamental review so that the effects on hundreds of thousands of small employers and millions of the low paid can be properly researched and dealt with.
As I said, every employers' and employees' organisation that has examined the Bill has urged the Government to think again. The disability organisations are concerned about the effects on the employment of disabled people. Lower paid workers and those in industries with no organised sick pay schemes stand to lose disproportionately. Women in work will be particularly penalised. For all these reasons, from these Benches we urge the Government to think again.
3.35 p.m.
Earl Russell: My Lords, I wish to congratulate my noble kinsman on his speech introducing the Bill. I have not heard so able an example of the sedative style of ministerial speaking since the speech with which the noble Lord, Lord Belstead, wound up the debate on the Second Reading of the poll tax Bill.
The noble Lord, Lord Carter, has drawn attention to the Secretary of State's remark that the Bill originated during the public expenditure round. Perhaps that is of some help in explaining the quite remarkable lack of consultation to which attention has been drawn in all quarters. I am delighted to hear that a meeting has taken place with the Confederation of British Industry; better late than never. It should have happened before the Bill was drafted.
The noble Lord, Lord Carter, has drawn attention to the absence of any report from the Social Security Advisory Committee. That is because last year in paragraph 15 of Schedule 6 to the Social Security Act, we authorised the Government to vary statutory sick pay by order. Noble Lords on the Opposition Benches are occasionally accused, in matters of liberty, of having a vigilance too eternal to be taken seriously. On this occasion our vigilance was not great enough. For my part, I am sorry for it.
It is not only a matter of an extraordinary lack of consultation; it is also a matter of the quite remarkable haste with which the Bill has progressed. It is less than a year since I drew attention to the speed with which the Education (Student Loans) Bill was progressing. I did not expect, before the year was out,

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to find a controversial Bill progressing with a speed that makes the pace of that Bill appear to have the stateliness of an elephant.
It is 35 days since the Session began and this Bill is now receiving its Second Reading in the second Chamber. It is not as though it were uncontroversial. It is not only controversial between the parties; it has caused great discontent among a vast number of organisations, including many of those representing industry: the Confederation of British Industry, the National Federation of Self Employed and Small Businesses, the Retail Consortium and even the Institute of Directors. Moreover, when a Bill causes equal offence to the Labour Party and the Institute of Directors, perhaps we need to wonder whether something has gone badly wrong.
Mr. Michael Meacher, speaking on the Bill in another place —and I paraphrase—said that the effect of the Bill on employers was of greater concern to Conservative than to Labour Members. That remark does not apply to Liberal Democrats. The effect of the Bill on employers is of deep concern to us. We understand that wealth has to be created before it can be spent. One of our biggest objections to the Bill is that it tends, no doubt in a small but none the less significant way, to increase industrial costs.
We have some difficulty in dealing with the Bill for it is part of a larger restructuring of statutory sick pay, including changes in rates which are to be brought about by order. Therefore, we can only address a small part of the iceberg here. However, we should not forget the existence of the rest; nor should we forget the existence of the clause which authorises the Minister to vary the rate of reimbursement to employers by order. I heard and was deeply grateful for the assurance given by my noble kinsman that any proceedings under that heading will be taken by affirmative instrument. However, I wish with respect to ask my noble kinsman and the Secretary of State to think about whether that is quite enough.
I also heard and welcomed the assurances given not only by my noble kinsman but also by his right honourable friends the Secretary of State and Mr. Scott that these provisions are not part of a deep-laid plan and that the Government have no present plans to take advantage of that clause. Naturally I accept those assurances completely, but, as I accept them, I do not see the need for the clause which authorises the Government to vary reimbursements further by order. If the Government do not wish to use that clause, why have they included it in the Bill?
Considerable anxiety has been expressed, notably by employers' organisations, as they fear that the Bill is the thin end of the wedge. I accept that it is not so intended, but if Ministers wish to dispel that impression they will not be successful unless they remove the clause which authorises them to vary the rate of reimbursement further by order. I hope that before we reach the Committee stage my noble kinsman and his right honourable friends will think seriously about that matter.
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There is considerable doubt as regards the effects of the Bill, especially the effect on public spending and in terms of net cost to employers. I fully accept that employers are in part compensated by the reduction in the rate of their national insurance contributions. However, my noble kinsman said only that the Government would go a long way towards meeting employers' costs. He did not undertake to meet all the costs. Employers are losing not only the 20 per cent. reimbursement at the higher rates but also the 7 per cent. payment which was understood to be a payment to meet administrative costs. Therefore, there is a net loss to employers of 27 per cent. That is certain.
As my noble kinsman admitted, the cost to the employer is a variant because it depends on the rate of sickness in a particular company and in any one year. That is a matter which cannot be entirely predicted. Therefore, anything that any of us say about costs must include an element of conjecture. This measure means that a much greater proportion of the risk of sickness will fall on the individual employer. That seems to me to offend against the basic principle of insurance that there is sense in trying to spread the risk. It seems to me that the Government are on a fork. Either the Bill will place increased costs on employers—in that case, I believe it is undesirable—or it will not reduce public expenditure. If public expenditure is not to be reduced I do not understand why the Government wish to pass the Bill.
I have also heard, notably from the Private Business Forum, a great deal of complaint about the increased burden of administrative work that is being placed on small employers in particular. Small employers complain about a constant deluge of forms. In talking about the discouraging effect that this has, the Private Business Forum is beginning to sound at times like the teachers. That reminds me of the fact that there are more areas now where there is a greater need to roll back the frontiers of the state than there ever were in 1979. What will be the ultimate effect of this measure on our industrial situation and on the balance of costs? We must remember that the measure is being introduced at the beginning of a recession. That does not seem to me to be the right time to increase industrial costs.
There has been a great deal of complaint—a lot of it from the National Association of Citizens Advice Bureaux—about the tendency under the present legislation for employers to dismiss workers who claim statutory sick pay. Good employers will not do that, but one of the reasons I regret having this Bill is that it will, in effect, place the burden that is evaded by bad employers on to good employers. That seems to me to be a bad balance to set.
There is also much anxiety—this should worry the Government—about the number of employers who do not pay national insurance. I cannot see that this Bill will do anything other than increase that number. The Government and sick people will lose from that situation. The concept of awarding full compensation at the lower rate but not at the higher rate will create an effective poverty trap at a level of £125 a week. As soon as a wage is raised to £126 a week the employer

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has to take on the whole business of administering and paying compensation for the final 20 per cent. of the sick pay. Therefore, the Bill will have the effect of holding down wages. It will also have an effect on hard-pressed companies—during a recession there must be hard-pressed companies—in increasing the drift to part-time work. That is contributing to the growing problem of an underclass. That is revealed in the social security budget, though it is concealed elsewhere. It is a factor which should worry all of us.
The final effect that I believe the measure will have in this area is that suggested by the Minister's honourable friend, Mr. Thurnham, who suggested that, when faced with increased costs, employers would simply increase prices and pass on the costs to consumers. In that way the Bill will increase inflation. That phenomenon has been shown to occur as far back as records exist. I do not see why this measure should be an exception to it.
The Bill is designed to rob Peter to pay Paul, but it will be less effective at paying Paul than at robbing Peter. It will be more effective at increasing industrial costs than at saving public money. The net effects of this Bill will do more harm to public expenditure than we imagine. Employers who do not pay national insurance will diminish public revenue. Wages stopped at a level of £125—if I am right about that—will result in a cost as the Government will have to increase expenditure on housing benefit. Due to the way housing benefit is administered I cannot even attempt to quantify that sum, but that does not mean that it will not arise.
If the measure leads to dismissals, as many of us fear, that again will increase the number of people who depend on the social security budget. It will tend to increase social security spending, not reduce it. Those who turn to part-time work may well find that they have to be supplemented by income support. There will also be an increase in public expenditure by that route. By the time all those effects are considered it is almost certain that the Bill will result in higher public expenditure rather than a saving. The effect of the Bill will al one and the same time be to increase industrial costs, public spending, unemployment and inflation. That is four own goals in a three-clause Bill. That is a record which takes some beating.
3.49 p.m.
Lard Birkett: My Lords, I rise to introduce briefly one small caveat into the thinking on the Bill. I refer to small businesses and, in particular, small and slightly irregular businesses. As your Lordships may have predicted, I have in mind the theatre, and the arts in general.
Lest your Lordships should think that this is yet another bleat from a highly articulate, but forever complaining, industry perhaps I may say that I do not believe that it is. When I speak on behalf of the theatre and the arts in general I may unwittingly also be speaking on behalf of a number of small businesses.
I can understand the noble Lord, Lord Henley, speaking about the effect of occupational sick-pay schemes in respect of the whole of industry. I can
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appreciate that very large firms have very effective and protective schemes and that is not simply because they are large. There is a temptation to believe that the big boys can get it right and the small ones cannot. I believe that it is a matter not so much of size as of predictability. So many of the great industries of this country are not only large but they are predictable. Short of disasters occurring within the market, their output and their employment policies are predictable and they can develop occupational sick pay schemes that suit them very well. I welcome the, fact that they do.
However, in the case of the theatre or the arts in general, matters are very much less predictable. Any small theatre will find that its business will expand and contract like a bellows in the course of a year. Its employment position is totally unpredictable; its income is unpredictable; and its financial position is always unpredictable. It is not just that theatres and the arts in general are always in trouble; it is very difficult for them to arrange schemes that will protect them against the effects of the Bill.
Like every other speaker on this Bill, I cannot rely on statistics. As the noble Lord, Lord Henley, pointed out in his introductory remarks, one cannot apply statistics to the Bill because one would have to predict the level of sickness, the numbers who will be sick and for how long. That is impossible. Therefore statistics will not help us. However, I have a shrewd feeling that the arts in general and the theatre in particular will suffer from the Bill, although I cannot predict whether they will suffer in the first year in view of the quid pro quo outlined by the noble Lord, Lord Henley.
Like the noble Earl, Lord Russell, I was relieved to hear the noble Lord say that there was no plan further to reduce the statutory amount that an employer can recover. Although I recognise that the Minister said that there are no plans at present to use the provision, if one wanted to invent a wedge with a very thin edge at one end and a very thick one at the other, Clause 1(2) would provide a model. I respect entirely what the noble Lord said on the subject. However, I hope that that provision will not be used, because if the 20 per cent. reduction were to become 40 per cent., 60 per cent., 80 per cent., or indeed the facility was removed entirely, the people about whom I am talking—and I am sure that there are far more of them than I wot of, and I speak on behalf of many small businesses—would be very seriously hurt indeed.
When the noble Lord, Lord Henley, replies to this debate—or during other stages of the Bill—I hope that he will think very carefully about what action he can take to make sure that the small and unpredictable element of industry is not hurt, as I fear it may be.
3.54 p.m.
Lord Boyd-Carpenter: My Lords, I do not believe that any of your Lordships would accuse me of being a regular exponent of increased public expenditure or an inveterate opponent of economy measures. Nevertheless, I am bound to say that I am sorry that the Bill has come forward this afternoon. I had rather hoped, and I still nourish the hope, that the new

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Government would give further consideration to the matter. I find myself agreeing entirely with what the noble Lord, Lord Carter, said on that point. Since presumably there is no question of a Committee stage until after the Recess, that will give some time for the Government—no doubt after listening to the advice which the noble Lord, Lord Henley, will give them—to consider further whether it is right to go forward with this measure at this time.
I shall not detain your Lordships for more than a moment or two, but I very much agree with the noble Lord, Lord Birkett, that the effect of the Bill will be most harsh and harmful for the smaller business. I rather doubt that its effects will be confined to the theatre and the arts, although one would naturally regret it in those areas. It will plainly make matters more difficult for the small employer who is unable to spread the cost of the measure over a large workforce. That is one objection to it.
Another objection is the timing. There is no dispute that the measure will increase industrial costs. It must do so, otherwise from where will the increased gain to public funds referred to in the memorandum attached to the Bill come? It will come from employers who, having allowed for a reduction in their ordinary National Insurance contributions, will be paying more in contributions generally. I cannot imagine a worse moment for introducing the measure. Whether or not we use the formidable word "recession", we are obviously in a position in which trade is becoming quieter, perhaps as a necessary consequence of the necessary measures against inflation. However, it is a fact, and surely this is the wrong moment—when employers are struggling to keep going in a failing market—to add unnecessarily to their costs.
My noble friend will no doubt say that it is a very small addition in proportion to employers' vast costs. He said something to that effect in his opening speech. However, that does not deal with the principle. If it is wrong to increase employers' costs then it must be wrong to do so, even by a small amount, at this particular time.
That again is a factor which entitles one to ask the Government to think again about the Bill. It may well he that in the better economic circumstances, which we hope and believe will arise in a year or two, the case for the Bill will be stronger than it is now. However, we are being asked to deal with the Bill now, against the background of the present situation. That seems to me to be a very serious objection to it.
As an old hand in social security matters, I hope that I may be allowed to say that it seems to go against the principle of the old sickness benefit—which was a National Insurance benefit to which the employer and the worker, and the Treasury, contributed—to add deliberately to employers' costs by denying them 20 per cent. (or, as has been pointed out, a total of 27 per cent.) of the refund to which they are entitled under the present system. Surely that is going against that principle, a principle to which I attach a certain amount of importance.
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I come now to the question of the amount. What is the particular merit of 80 per cent as against 75 per cent., 85 per cent. or any other figure? Have the Government just thought of a figure and put it in? What is the intellectual and logical justification for reducing the repayment to the employer by 20 per cent. (or 27 per cent.) to 80 per cent? What is the justification?
I do not like Clause 1(2) which enables that figure to be altered, admittedly up or down, by statutory instrument. That provision is made less alarming as a result of the concession which my noble friend very properly announced that the statutory instrument concerned would be subject to the affirmative procedure.
Lord Carter: My Lords, will the noble Lord allow me to intervene? I am very grateful. He said that the order would allow the rate to be altered up or down. Can he conceive of any circumstances in which this Government would increase the reimbursement from 80 per cent. to 90 per cent., or back to 100 per cent?
Lord Boyd-Carpenter: I can indeed, my Lords. This is a very reasonable government. They have just heard a most reasonable speech advocating just that from the noble Lord, Lord Carter, and I hope that they are listening to what I consider to be a no less reasonable speech from one of their regular supporters. I can imagine that a thoughtful government would say, "Well, perhaps we are". As the noble Lord, Lord Carter, will realise, that is the very point that I made at the beginning of my speech, expressing the hope that the Government will give further consideration to the matter and not press on with the Bill at this time.
I wish to make only two other points. First, I suppose that making the employer pay 27 per cent. of the SSP for sick workers may result in some employers becoming more suspicious or careful, whichever way one wishes to look at it, about employing people who have doubtful health. Obviously, employees liable to sickness will appear likely to cost more than employees apparently in good health. Any discrimination against employees who have had bad luck with their health would be a very serious matter socially.
Neither your Lordships nor the Government can shrug off the criticism of all the organisations throughout industry which have objected to this measure. They include the CBI, the Retail Consortium and all those the noble Lord, Lord Carter, very properly quoted. They are unanimously critical of the Bill. It is rare to find those organisations—even the Institute of Directors figures among them—totally in agreement with each other. However, they are unanimous on this point. Surely a thinking and caring government will think and care about the recommendations made by the people who are in the front line—those responsible for running industry who will be exposed to the additional costs and who have warned the Government of the unfortunate effects.
I do not expect that when he replies my noble friend Lord Henley will do other than give his usual robust defence of a government measure. He always does: I often find that the worse the measure the stronger and

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more robust is his defence, by which I mean that he is a good advocate, as I am sure noble Lords will agree. I hope that after this debate has been studied in the department, as I am sure it will be, and with the Christmas Recess looming, some serious thought will be given to whether it makes sense in the present circumstances to defy the views of practically everybody in industry and at this time put forward a measure which must increase industrial costs. I beg the Government at least to think again.
4.3 p.m.
Lord Stanley of Alderley: My Lords, after the speech by my noble friend Lord Boyd-Carpenter, I am sure that I do not want to add to the woes of my noble kinsman Lord Henley. However, although my noble kinsman presented the Bill to your Lordships as the best thing since sliced bread, I have to tell him with the deepest regret that I like neither sliced bread nor his Bill.
I do not usually speak at Second Readings because, like my noble friend Lord Boyd-Carpenter, I generally support the main principles of most government Bills. I am also aware that the powers that be do not pay a great deal of attention to what your Lordships say. I realise that it is extremely difficult to tempt the Government with a carrot. To take the words out of my noble kinsman's mouth, the Government are not a donkey. So, sadly I find it necessary to wait until Committee stage when it is sometimes possible to use the threat of a stick.
However, I dislike the principle of this Bill. Therefore I am somewhat at a loss to know how it can be amended bar sending it right back. I dislike the principle of the Bill for a number of reasons, most of which have already been mentioned. My main objection is that I believe, in common with most noble Lords, that it is the state's main job to protect and help those less fortunate in our society, which in this case are the sick. The noble Lord, Lord Carter, raised that point in the form of a question. I shall be interested to hear what my noble kinsman has to say in reply.
I have to remind him that in 1982 the Government asked, begged and cajoled employers to take over the state's role in administering sickness benefit. The employers did so, albeit reluctantly, and they did it without payment, though it takes work to carry out. Having taken advantage of that offer, the Government now say, "Not only will you administer sickness benefit but you will also part fund it, and just watch out because by instrument we may well increase your share of the funding in the future". The point was made by my noble kinsman Lord Russell. If ever there were a case of my father chastising you with whips and I chastising you with scorpions, this little, mean Bill is one.
Just in case my noble kinsman has not yet got the message, I conclude by repeating that I do not much like his Bill. I hope that he will enjoy the Committee stage when the Christmas spirit that all your Lordships have today been displaying with characteristic warmth will have gone and we shall be back in the cruel light of 1991.
4.6 p.m.
Lord Stallard: My Lords, I must begin by apologising for a brief absence which was due to an unavoidable clash of commitments. I heard most of the speeches and confess that I agree with most of the speakers from both sides. So far there has not been much support for this nasty little Bill.
The noble Lord who has just spoken mentioned the Christmas spirit. I had been about to say that just thinking about the Bill has ruined my Christmas. It is certainly in the wrong spirit for me. In his opening remarks the noble Lord, Lord Henley, said that this short Bill represented a success story. The scheme had been a success. All of us have been inundated with letters from employers. I have never had so many letters from employers as well as organisations such as the CBI and the National Federation of Self Employed and Small Businesses which represent thousands of firms and companies, let alone those which are concerned with the employees. None of them says that this has been a success story. In fact most of them infer that they have been conned. They accepted and agreed to it in the first instance because they were to be reimbursed 100 per cent. for the expenditure and administration and so on. They now find that, after the scheme has run for the first 12 months with their help and co-operation, cuts are beginning and it will cost them money. In some cases it will cost £11 per employee per week. That must rebound on the employees. It will affect everybody throughout commerce and industry. If that is considered a success story, I do not know what the noble Lord considers a failure. This is a shocking Bill.
All the organisations mentioned by my noble friend Lord Carter, and accepted by the noble Lord, Lord Boyd-Carpenter, have made strong objections with which I do not disagree. I cannot recall whether the Low Pay Unit and other trade union organisations which represent the employees have been mentioned, nor the people who represent non-trade union employees and so on. They have all seriously examined this measure. I am amazed that a government which will turn somersaults and bend over backwards to offer discussions, meetings and conferences to consider that other abomination the poll tax and seek consensus did not even consult on this Bill. They did not even consult their friends on the Bill. That says something about the Government. I would have referred to the "previous" Government but it is the same Government. They have changed one fellow, but I have seen no real changes and I do not think there will be any. We ought to be careful about going ahead without consultation.
Since the Government were elected in 1979 they have not shrunk from using their massive majority in the other place —the elected dictatorship, as the noble and learned Lord, Lord Hailsham, once called it—to steamroller through much ill thought out, badly drafted legislation. I do not blame the draftsmen. They have been working under tremendous pressure on many Bills since 1979. I have heard the noble and learned Lord, Lord Rawlinson, speak on this point on many occasions. At one stage, before Bills and orders

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came to the Floor of the House a committee would consider them for omissions, badly drafted clauses and so on. Such consideration has disappeared. We now have the most appalling legislation; and this legislation has been altered 18 times since it was introduced in 1983.
There is something wrong when a new Bill has to be changed so regularly. It ends up as unacceptable to anyone except the Front Bench spokesman for the Government. The Government know that they have a massive majority which will jump when the Whips say "Jump". That position may be coming to an end. I have the impression that the nearer we are to an election the more anxious that massive majority becomes about retaining their seats. Those seats include small businessmen, employers, the CBI and so on. The massive majority is becoming worried. The statutory sick pay legislation will have to be dramatically altered before it is acceptable to the other side.
I have been involved with social security for God knows how many years. I remember when the noble Lord, Lord Boyd-Carpenter, was responsible for social security. I have crossed swords with him, if not personally certainly in correspondence, a number of times. However, since I have been in the House, and since 1979, we have been given a number of reasons why such Bills have been introduced. First, it was to simplify the system. If noble Lords believe that, they will believe the three card trick.
The system was certainly in need of simplification. However, if anyone considers that it has been simplified he should ask the claimants. The forms have become longer, with more questions. People at the bottom of the pile are frightened out of their wits the moment they are offered a form. When I was a Member of another place, they used to come to me on the constituency advice service. They needed most help with filling in the forms. One form is 22 pages long. They do not have to answer all the parts, but one has to explain to them which parts they do not have to answer. It is more complicated than when the form consisted of one or two pages. Do not let anyone kid us that the form is simpler and not as complicated as it was. That is not true.
Secondly, it is said that changes have been made to target the right people. Ask the targets, my Lords. Ask the unemployed. Ask the pensioners who are now struggling to pay two poll taxes when they used to pay only one rate bill. Ask the youngsters who have lost benefits. Who are the targets these changes were meant to benefit? Ask employers who are now worried about their prospects as the cuts begin to bite into what was supposed to be their share of the administrative costs and so on. If these were the people who were targeted, the changes have missed the mark by a mile.
Thirdly, it is said that the changes were to reduce dependency on state benefits. The only way that such changes have reduced dependency is by cutting off many people from the benefit system. I refer to youngsters who receive no benefit and students whose
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benefits have been cut. They have been pushed into someone else's area—either to the banks for a loan, or on to the streets to beg. The fact that there is no cushion is part of the cause of the increasing social problem. Dependency on benefits was to end. When I referred to ending dependency I meant that a quality of life was to be produced so that people would not have to depend on benefits. It would require the production of more jobs or whatever, and certainly not kicking the problem around, pushing it from one area to another, away from the Government.
The Statutory Sick Pay Bill is another example. It will mean that many people do not receive sick pay. Many of the smaller employers cannot afford to operate the system. We know too that many women, mostly working part time, have clauses in contracts with hours that can be adjusted to make sure that they do not qualify for SSP or for anything else. The employer may say, "Now that it will cost me money, I want to make sure that as many people as possible do not qualify". As another form of reference, the employer may ask, "What is your health record?". He will not ask, "How good are you at the job? How skilled are you? How long have you been employed? What is your experience?". He will ask, "How many times have you been sick", because that affects the profits of the business. It will now be a criterion for employment and will affect people's jobs.
That factor will especially affect the disabled. They have a hard enough job now. If that factor is added—they have to have so many weeks sick pay which will be funded by the employer—the employer will not be too keen to fund it. We all know also about the problems of the blacks and other ethnics. They have a difficult enough job now. If one adds the statutory sick pay factor their position will become impossible.
I do not believe that a government with knowledge of those factors—everyone knows them; they are not something new that I have invented—would have produced such a Bill unless there was something perverse about them. With the noble Lord, Lord Boyd-Carpenter, I hope that the Government will reconsider the Bill before they push it through, using their majority.
The noble Lord, Lord Henley, stated that 90 per cent. of employees are now covered by other occupational schemes. That has been denied by everyone who has anything to do with industry. It is not true. It is almost like the Gallup polls which forecast recent results within the Tory Party.
I do not know who the people were who were questioned in those polls. I do not know how the percentages changed every night. Overnight there was suddenly a reduction in the Labour Party's standing in the polls from 10 per cent., 15 per cent. or 20 per cent. in front to 11 per cent. behind. But nothing had happened except that the Prime Minister had changed.
Lord Henley: My Lords, will the noble Lord give way? I ought to correct him. He stated that I said that 90 per cent. of employees were covered. I made it quite clear—the noble Lord, Lord Carter, picked it up—that it was indisputable that 91 per cent. of employees

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work for an employer who provides occupational sick pay. At no point did I say that that meant that all those people were necessarily covered. I shall deal with the point when I wind up. The noble Lord ought to be clear that I did not say that 90 per cent. of employees were covered.
Lord Stallard: My Lords, I accept that. Nonetheless it is a fine point.
Earl Russell: My Lords, since the point has arisen, will my noble kinsman retreat further to the position taken by the Secretary of State? He stated only that a substantial proportion was covered by occupational schemes. That is at col. 634 of the Official Report of Second Reading.
Lord Henley: My Lords, my right honourable friend said that a substantial proportion was covered. What I cannot answer, and my right honourable friend would not be able to answer, is how many people are covered. We know that 91 per cent. of employees work for employers who provide such schemes. We do not know how many are covered. I am certainly prepared to stick to what my right honourable friend said: a substantial proportion.
Lord Stallard: My Lords, we hear that intervention with interest. However, the fact remains that the government rationale was based on that 91 per cent. figure. No one involved has accepted the Government's rationale for the basis of the scheme.
I wish to say one word about the future of the scheme. It is worrying many people. If this scheme is allowed to continue it will involve total privatisation. It was the first part of the social security system to be privatised. In effect that part was handed over to the employers. The intention now appears to be to give the responsibility to them completely, gradually whittling away compensation, reimbursement and so on, without providing an adequate response to their problems and queries.
The intention is to privatise and that is totally against everything that the Government have said. I remember the Secretary of State, as he then was, saying that this would be better than Beveridge. The Government were really going to improve on the Beveridge system. It is a complete farce when at the same time they are privatising everything from start to finish. If the Government are beginning to privatise this and make sick people the target of that kind of treatment, it is about time that they not only took this Bill away but went away with it and had a general election. It is absolutely disgraceful.
4.20 p.m.
Lord Mottistone: My Lords, I too think it would be better if this Bill did not exist. It is interesting to me that every noble Lord who spoke criticised it, including my noble friend Lord Boyd-Carpenter with his great experience as a Minister for pensions and as Chief Secretary to the Treasury. He ought to know what this is all about, perhaps better than the, department of state which put the Bill forward. My noble friend told us that he believes that it is not a
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suitable Bill to bring forward at this time, and every noble Lord who spoke gave different examples of how certain people will be badly hit by it.
It is also significant that not only has the CBI objected to the Bill—as your Lordships know, I am principally advised by the CBI in what I say to your Lordships on this sort of matter—but practically every other professional body or trade association that is concerned also considers the Bill to be unsuitable and not one with which your Lordships should be burdened.
Perhaps the most telling point against the Bill, above everything else and apart from the detail, is the fact that at this stage of a Parliament (even if we are to have an election) it has been rushed through. It is a tiny Bill with great implications, as many noble Lords have made clear to us, but it has not only been rushed through but has been rushed through without consultation. That is quite wrong in this sort of area when the Government are seeking to add to the assistance that they are asking from employers in carrying out one of their schemes.
When this system was first introduced nearly 10 years ago great trouble was taken by my right honourable friend Norman Fowler to discuss it very thoroughly with employers because the Government were asking employers to do something for them. I remember very well that, at the beginning, the employers thought that this was just something else they were having to do for government and for which they were not being paid. Whatever we say about 100 per cent. or 80 per cent. reimbursement, the cost of administration has never been paid for. Therefore, the Government rely very much on the employers to carry out this work and it is quite wrong that the Government should not take the same trouble now that they took 10 years ago to get the employers to agree on what they are trying to do.
The Government may have some good arguments, but I must say that my noble friend the Minister did not put forward any convincing arguments, and no other noble Lord who spoke appeared to think so either. If the Government have a good argument they must have it out beforehand with the CBI and with other interested bodies because they are asking those bodies to do something for them. They are changing the rules.
When the CBI and the employers generally agreed to this 10 years ago the administrative responsibility for SSP was agreed to only on the basis that all SSP payments were fully reimbursed. That was accepted by the Secretary of State at the time. My right honourable friend Norman Fowler, then the Minister, said: "Accordingly, the Government have decided to accept the case for 100 per cent. self-deduction".
That argument applies now just as it did in 1981. I come back to the point that if you are changing the rules of a game in which you are asking somebody to share a duty you must discuss the matter beforehand. The Government have not done that and it is quite

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wrong that this Bill should be not only rushed through the other place at an extraordinary rate but presented to this House without discussions having taken place.
I honestly do not believe that it will help if discussions take place at this stage, because this is a very simple Bill and there is not much room for amendment within it. If discussions take place between now and Committee stage, which is possible, it does not seem to me that it will be easy to get some sort of agreement without accepting that the basis of the Bill is wrong, because there is not enough of it to come to some sort of agreement about minor change. In any case, it has gone through the other place so it will perhaps say, quite reasonably, that it has already approved the Bill in its present form.
Consequently, I say very strongly, as other noble Lords have said, that the best thing the Government can do is to drop this Bill at this stage. If they wish they can then have discussions with the employers' representatives during the next month or so and present us with another Bill which retains the parts of the previous legislation which were accepted by employers 10 years ago and with which they are still prepared to continue.
Lord Harmar-Nicholls: My Lords, my noble friend said that he speaks with the authority and backing of the CBI, but I hope he is not saying that even at this late stage, if the Government are prepared to have consultations, he will recommend that they do not take place. I should have thought that half a loaf was better than none. If he cannot get complete agreement then consultation on parts must be good. Perhaps that is what my noble friend said and I misunderstood him.
Lord Mottistone: No, my Lords. If it were a more complex Bill I would entirely agree with my noble friend Lord Harmar-Nicholls; but because of the nature of the Bill I doubt whether consultations would prove worth while. I hope that employers do not enter into consultations with their hands tied behind their backs and that the Government do not say, "Sorry, we had consultations, but we did not come to agreement"; or, "We persuaded the CBI" on something about which it patently would not have agreed. That is what I fear. I do not like consultations when there is nothing very much on which to consult; but I fear that that is the case.
It would not be helpful to say much more. Most of the important points on which the CBI has advised me were made by noble Lords and the noble Earl, Lord Russell, in particular. I very much hope that the report of this debate will be carefully read with an open mind, accepting the arguments that have been put forward and not attacking them on the lines, "We must shoot this down and we must shoot that down", and so on. That is not the way to tackle this problem. I hope that something similar to what I have suggested is what the Government, on reflection, will consider to be the best course. If so, I wish them a very happy new year.
4.30 p.m.
Lord Gisborough: My Lords, most of the points that I wished to make have been raised but I join noble Lords who oppose the Bill. There is the thin end of the wedge aspect. The Minister stated that the Government had no plans for removing the clause that affects 80 per cent. reimbursement to employers. I cannot see that a future government would not take advantage of that situation in order to try to reduce the amount. If there are no plans for making such an alteration, then I see no need for provision to be made by statutory instrument. There is a lack of assurance from the Government that they will continue to offset the extra cost to employers by reduced national insurance contributions after 1991.
The state has an obligation towards the sick; it should not seek to shift that liability to employers. There is a great concern in agriculture because of the very few people employed in that sector. The same applies to small industries. The Minister stated that the average period of sickness was three weeks. However, it could be longer. I have had experience of one man who was off sick for about a year. Any small business, particularly a farm, employing only one person, would face a catastrophic situation. I know of one company with wholly-owned subsidiaries in Holland and the USA that is now considering transfer of its manufacturing to Holland in order to avoid an increased burden in this country.
The Minister's explanation has allayed some fears. It was a masterpiece. But concern about the Bill is overwhelming. I join those noble Lords who believe that the Bill should be withdraw or redrawn.
4.32 p.m.
Lord Simon of Glaisdale: My Lords, I apologise for not putting down my name to speak; I am grateful for being allowed to intervene. I wish to refer to Clause 1(2). It is an example of what is known as a Henry VIII clause. Henry VIII was enabled to alter an Act of Parliament under the Statute of Proclamation; in other words, by ministerial order.
Much has been said already about the Bill. I wish only to point out that Henry VIII clauses were started in approximately 1890 with the first bureaucratic surge. Mostly they were innocuous. But after 1918 they occurred with increased momentum. This aroused considerable concern at the time and the Donoughmore Scott Committee was appointed. It reported in 1932.
When a similar clause was resurrected two Sessions ago—the matter has since been considerably discussed—I understood the noble and learned Lord the Lord Chancellor to state that the Government generally accepted the recommendations of the Donoughmore Scott Committee. One recommendation was that this type of clause should not be introduced into legislation unless strictly necessary. If however, it was introduced it should feature in the Explanatory Memorandum and should be justified to the hilt by the Minister.
It is extraordinary that today we have heard virtually nothing by way of explanation or

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justification. There is nothing in the Explanatory Memorandum; there was nothing in the otherwise admirable speech of the noble Lord who is in charge of the Bill. Therefore, I am bound to ask whether the Government are reneging on what I understood my noble and learned friend to state during the last Session. Is there any justification for stating that this provision is necessary? If not, so extraordinary a constitutional provision and aggrandisement of executive power at the expense of more normal parliamentary function should not be in the Bill, as has been pointed out by the noble Lords, Lord Boyd-Carpenter and Lord Gisborough.
Again I ask the noble Lord: what is the necessity for the clause? What is its justification? Are the Government standing by the noble and learned Lord's assurance to your Lordships that in general the recommendations of the Donoughmore Scott Report will be observed?
4.35 p.m.
Baroness Turner of Camden: My Lords, I agree with my noble friend and a number of other noble Lords who have spoken. This is a very nasty little Bill that is being rushed through without any consultation at all.
As the Minister stated, the intention is to restructure the statutory sick pay scheme. One wonders whether the Bill is a first step on the way to doing away with state involvement in the payment of sick pay to workers and the placing of the entire burden upon employers. The Minister states that there is no intention of doing so at this time. I made a particular note of the words "at this time". However, what will happen in the future? It is not surprising that in current circumstances many people are deeply suspicious of the intention.
It has not been denied by the Government that if the whole package—not simply the Bill—goes through, approximately 3 million workers stand to be worse off than under the present arrangements. Those workers, earning between £125 and £185 per week, will lose eligibility for the higher rate of SSP. As my noble friend stated, 600,000 of the 3 million are expected to claim SSP during the year. They will lose £9 a week each. Sixty per cent. of the losers will be women. Therefore, it is not surprising that on this side of the House we do not accept the Minister's contention that employees will not be worse off.
There are other problems. The Government propose to freeze the higher rate of SSP. That will not be welcomed by employers—and there are some good employers—who make up employees' pay to full salary when they are off sick. The value of the higher rate SSP is being eroded gradually so that such employers will have to pay more money in making up full pay as time goes by. As has been stated on all sides of the House and as the Minister explained the Government intend to cut reimbursement to employers from 100 per cent. to 80 per cent. The Minister claims that the Government will be compensating employers for that loss by reducing employers' national insurance contributions.
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The organisations representing small businesses are not impressed. They point out that when they first agreed to administer SSP they were told that they would not have to fund it. Now they will clearly have to bear some of the cost. Moreover, an administrative burden is involved which is particularly onerous for small businesses that do not have computerised records or numbers of skilled administrative staff.
The Government are always prating about burdens on business when it comes to protective legislation for employees. That is one of the basic reasons for their opposition to much of the social charter. It is incredible that they should nevertheless be quite happy to impose the extra burden proposed in the Bill. Presumably, there are basic ideological differences with previous administrations, both Labour and Conservative, which believed in a comprehensive system of national insurance. As representatives of small businesses have said, they cannot take on the burden of sick pay for employees. One commented, "We thought that that was what national insurance was all about".
Although willing with some reluctance, as I understand it, to take responsibility on behalf of its members for the original SS pay scheme, the CBI did so because it believed that the Government would continue with 100 per cent. reimbursement and because stability was expected to result from the practice of up-rating in line with inflation. That practice is being departed from as regards the upper rate. As we have said, that means that employers making up to full pay will inevitably have to pay more.
The Government maintain—we have heard it again today—that 90 per cent. of work forces are now covered by occupational sick pay schemes. The Minister clarified that in reply to an intervention. It is however a crucial point that not every member of a workforce which has an occupational scheme is covered by the scheme. A scheme at a particular company may cover some employees and not others. Typically, part-time and temporary employees will not be covered. Senior career staff may be covered, but not manual employees. Moreover, as my noble friend pointed out, schemes vary in the length of time provided. Some may provide sick pay for only six weeks; thereafter the employee will be dependent on SSP.
As we know, the Government will make some savings as a result of this mean measure. However, I question whether those savings are worth the problems which arise from the proposals in the Bill. There are already problems with the present operation of the SSP scheme. The National Association of Citizens Advice Bureaux has cases of clients who have had difficulty obtaining the SSP from employers under the present arrangements. Often people are dismissed when sick, particularly if they are relatively short service employees or part-time workers. Such employees are often not in a position to challenge the refusal of the employer to pay the SSP.
Low pay organisations view with anxiety the Goverment's proposition to reduce reimbursement to 80 per cent. They believe that this may cause

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employers to look more carefully at applicants' sick records when taking on employees. Those applicants who have had poor health and people with disabilities may find it increasingly hard to obtain employment and, once they have it, to keep it. That may mean further discrimination against people who are unfortunate enough to be diagnosed as HIV positive.
The Equal Opportunities Commission raised an interesting point based on the expectation that women are more likely to be disadvantageously affected than men. As I said, about 60 per cent. of those affected are likely to be women because of their predominance in low paid employment. The EOC wonders whether that may be indirect discrimination since more members of one sex than the other are affected. If so, we may see an interesting reference to the European Court.
There was no reason to depart from simple up-rating in line with inflation. Even so, there is a disadvantage. Since sick pay is intended to replace in part lost earnings, it would be far more appropriate to up-rate in line with the wages index. Up-rating in line with the RPI has already meant an erosion in the actual rate of SSP relative to wages.
This is a nasty little Bill—residual Thatcherism even after the lady has departed. Where is the new caring conservatism of which we have heard so much? I was glad to learn, listening to the contributions of noble Lords opposite and in particular to the noble Lord Lord Boyd-Carpenter, that it is alive and with us in this House.
The Bill has been introduced at great speed. There has been no consultation with the body normally concerned—the Social Security Advisory Committee—or, indeed, with any other body. Also, the Government can make alterations without the necessity of primary legislation; simply by regulation. Although I am not well versed in these matters, I imagine that that was what the noble and learned Lord, Lord Simon of Glaisdale, meant when he referred to Henry VIII.
The Government should take away this matter and re-think it after consultation with all the appropriate bodies including the Social Security Advisory Committee. As a number of noble Lords have pointed out, a vast range of organisations have expressed total opposition to the Bill. That applies not only to employers' organisations but also to low pay organisations, the Trades Union Congress, people looking after the disabled and so on. Very often, those objecting —for example, the Institute of Directors—are those who normally support the Government.
I have some sympathy for the Minister who seems entirely on his own in his support for the Bill. I regret that I cannot join him. I ask him to listen carefully to what has been said. I ask him to take away the Bill and think about it during the Christmas Recess so that we can be told that after consultation with all concerned, it is to be withdrawn.
4.45 p.m.
Lord Henley: My Lords, my noble kinsman Lord Russell commented on the style of my delivery in introducing the Bill to the House. He implied that there was a lack of commitment in my devotion to it. I assure him that that is not the case. I am perfectly happy to support the Bill and shall continue to do so. In fact at present I am suffering from a cold and hence my voice—
Earl Russell: My Lords, I must make my apologies to my noble kinsman. I intended to convey no such impression and if I inadvertently conveyed it, I withdraw it.
Lord Henley: My Lords, I thank my noble kinsman. I was about to say that my noble friend Lord Boyd-Carpenter then went on to say that the weaker the case, the stronger would be my defence of the Bill. Again, I hope that the noble Lord will accept that I shall defend the Bill as strongly as it deserves to be defended. However, I may not be able to make my points in as robust a manner as I would wish because of the problems with my voice.
We have had a very interesting debate on this short Bill although at times it may have appeared to be somewhat one-sided. The Government's view is that this is a fairly modest shift in the balance of short-term sickness provision between the state and business. My noble friend Lord Boyd-Carpenter asked why we had chosen 80 per cent. I repeat that that is a fairly modest shift in the balance. The noble Lord, Lord Carter, asked whether we accepted that there is a state obligation. I should stress that there is a balance of obligation between the state and business. Business quite clearly recognises that, as we have seen from the growth in occupational sick pay provision over the past 10 or 15 years.
There have been complaints that the Bill has been pushed through both Houses with undue haste. There have been complaints also about the lack of consultation. Obviously I can answer only for this House. However, I assure the House that as far as I know through the usual channels we shall return to this Bill in Committee after the Christmas Recess. There will be ample time for consultation with all parties and between myself and my right honourable friend in the Department of Social Security. My door will remain open to any person, or representative of any organisation, who wishes to see me. I believe I can say that the same applies to my right honourable friend. There is no intention to railroad the Bill through the House.
Lord Harmar-Nicholls: My Lords, do I understand the noble Lord to be undertaking that between now and the Committee stage there will be consultations not only with the party opposite and with other critics but also with outside bodies? Even at this late stage such consultations may well mitigate some of the details which have caused comment in this debate.
Lord Henley: My Lords, I assume that my noble friend was here when I made my opening speech. I clearly stated that my right honourable friend and I have already met representatives of the CBI and the

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National Federation of Self Employed and Small Businesses Ltd. I was attempting to explain that I was prepared to see whomsoever and whatsoever organisation between now and Committee stage if they wish to discuss the matter with me. My door and the door of my right honourable friend will remain open for that.
I then went on to say that there was no intention to railroad the Bill through either House. It is important that the Bill reaches the statute book at a suitable time to enable employers to make the necessary arrangements with their payroll systems before next April.
I was asked why the Government did not consult employers regarding these proposals in advance of my right honourable friend's uprating announcement. As the House will be aware, these changes form part of the department's overall programme of expenditure. By the very nature of the way in which the process of public expenditure rounds operate—my noble friend Lord Boyd-Carpenter will know this better than I—it was not possible to engage in prior consultations. However, we ensured that employers and their organisations were kept fully in the picture after the first announcement was made.
Concern has been expressed on a number of matters with which I shall attempt to deal. I hope that noble Lords will accept that in the time available I shall not be able to deal with all the points raised. I have already mentioned the point about the lack of consultation. The other major aspects include the question of our imposing an extra burden on industry at a time when it is not necessary; the question of the disabled; the question of employees who earn between £125 and £185 per week losing out; and, most importantly, there was the question of Clause 1(2), about which many noble Lords, including the noble and learned Lord, Lord Simon, expressed considerable doubts. The complicated nature of the forms with which people have to deal was raised and coverage of operational sick pay in general. I shall cover many of those points, but I hope noble Lords will accept that there are time constraints and I am somewhat limited.
Turning first to the question of whether this is the right time at which to impose another burden on employers, I should like to reiterate the point I made in my introductory remarks. Leaving aside the offsetting reductions in national insurance contributions, the savings from the Bill amount to little more than 0.05 per cent. of the employers' overall cost of well over £300 billion. Having said that, if one takes at the same time the fact that my right honourable friend was able to make those reductions and that we have probably the most favourable corporation tax structure in Europe for small businesses, I do not believe that the burden on those businesses is too great.
I turn now to the question of the effect of the Bill on the disabled. It was suggested by my noble friend Lord Boyd-Carpenter and the noble Lords, Lord Stallard and Lord Carter, that as a result of the proposals in the Bill employers would be less likely to take on people with disabilities or those who suffer
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from bad health. I do not accept that. If employers are influenced by the health of potential employees, the small question of a slightly increased level of payment for statutory sick pay will not influence them. What will influence them is the availability of those potential employees to work. The employer will not take on people who will be absent for a considerable amount of time.
Turning to the levels of sickness experienced by the disabled, what evidence there is points in the opposite direction to their being bad attenders. People with disabilities in the main do not have bad attendance records. Their records are often better than for those of us who are more fortunate. The report Employment in Handicap published earlier this year indicates that half the people in work with disabilities took fewer than five days a year off work for sickness and treatment. Over a five-year period half had not had a spell of sickness or treatment lasting one month. There is nothing in the figures to suggest that the employment of a disabled person leads to significant extra SSP costs for the employer.
Both the noble Lord, Lord Carter, and the noble Baroness, Lady Turner, went on to say that around 3 million employees would potentially lose out as a result of the uprating changes. They were referring to matters not in the Bill but which will be dealt with in the uprating order in due course. I should like to stress that of the 600,000 employees who are expected to claim SSP during the year, the vast majority according to our evidence will receive occupational sick pay and will therefore suffer no overall reduction at all.
Lord Carter: My Lords, will the Minister tell the House where the evidence comes from for that statement? How do the Government know that the majority of the 600,000 will be fully covered by the occupational sick pay schemes?
Lord Henley: My Lords, I believe I referred earlier to the report that we commissioned in 1988 from IFF. As the noble Lord is aware, the evidence is that 91 per cent. of employees work for firms that are covered. I shall come to the point later regarding how many of those people are actually covered. Our contention is that the vast majority are.
Perhaps I may now turn to the question of the level of SSP and reimbursement and the suggestion that it should be reduced to 80 per cent. We were asked what guarantee we could offer that it will not be reduced in the future. That raises the point made by the noble and learned Lord, Lord Simon, regarding what he called the Henry VIII clauses. He demanded, quite rightly, that I as the Minister responsible for the Bill in this House should justify clauses such as Clause 1(2). Before doing so I repeat the commitment I made in opening that we will be bringing forward an amendment at Committee stage to ensure that any order made to vary that will be by affirmative resolution and not by negative resolution.
I stress again that there are no plans at the moment to alter the reimbursement rate in future years. Nevertheless, in answer to what I regard as a hypothetical question I am sure that the House will

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acknowledge that it would be unwise for me to offer predictions for the future. I remind the House that the question of national insurance contribution reductions is a separate issue in that they have been made possible following my right honourable friend the Secretary of State's annual review of the national insurance fund. Statutory sick pay is not a charge on that fund. Therefore, in future years the Secretary of State will always be able to take counter-balancing measures in the national insurance fund in respect of income and outgoings from that fund when considering the future level of employers' contributions. Whether that will allow further reductions it is impossible —indeed inappropriate—for me to say.
I turn to the provision potentially to reduce the 80 per cent. in future. It is prudent to have such a provision. As I said, we have no plans to make further changes. Given the continuing need to examine priorities across the whole spectrum of social security it is sensible to have a provision that is capable of being changed. The main principle—namely, that a percentage only of the SSP is recovered by employers—is covered in Clause 1 of the Bill. Variation of that percentage, which is not the main principle—that has already been covered—does not affect that principle. It was therefore considered that changes in that percentage rate should be governed by secondary legislation rather than by primary legislation just as a large part of the social security system, including nearly all the rates of benefit, is in a form which does not lock it into primary legislation. Therefore changes can be made by secondary legislation. Governments of all complexions acknowledge that as the sensible way to proceed.
Turning to the complication of the forms and the problems that that may create for small employers particularly—a point raised by the noble Lord, Lord Stallard, and the noble Earl, Lord Russell—and the extent to which small employers have to cope currently with SSP, that is something in which I have taken a particular interest. It is Department of Social Security deregulation business. We are very concerned to keep burdens on business to a minimum.
Considerable strides have been made over the past two years to better inform employers about SSP. Following independent research, the guidance to employers has been completely revised and represented; a quick guide has been introduced which employers can now use in straightforward cases; a wall chart and video have also been made available. This new literature has been widely welcomed.
Other initiatives include a completely free telephone inquiry service directly for employers on national insurance contributions, SSP and SMP, plus a free seminar service. There is also a representative employers' panel that meets about half-yearly at the Department of Social Security and which consists of all kinds of employers. We take its advice very carefully on how to go about these matters. I accept that there will always be some of the smaller employees who will make mistakes because of the simple fact that they only have to operate SSP
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infrequently; but I am confident that the initiatives we have taken, and will continue to take, will greatly reduce any problems that exist.
I turn now to the occupational sick pay coverage. I apologise for intervening during the speech made by the noble Lord, Lord Stallard, but I thought it important to do so at that moment. I thought that the noble Lord was accusing me of misleading the House and implying that 90 per cent. of employees were covered. What I said in opening and when I intervened in order to correct the noble Lord was that 91 per cent. of employees work for an employer who provides occupational sick pay; that is to say, only 9 per cent. of employees at present have no opportunity at all to belong to an occupational sick pay scheme. As I said earlier, these will principally be low-paid or part-time employees, often working for small employers. As such, they will normally qualify for the lower rate of SSP which, as I said earlier, has been uprated by the full RPI increase of 10·9 per cent.
One criticism has been that even where an employee works for an employer with occupational sick pay he may not satisfy the employers' eligibility conditions; but we need to put this in perspective. The first point to make is that half the private sector schemes have no exclusion clauses at all. Secondly, in the remaining 50 per cent. of schemes our evidence is that by far the most common exclusion is on length of service, which varies between three and 12 months. Only if an employee in one of these schemes falls sick relatively quickly after he starts a new job will he be affected in practice. While this obviously will occur, I suggest the instances will be few, Indeed, most employers' experience is that incidence of sickness in the early weeks of a new job is lower than average.
The Government stick by their view that the vast majority of employees affected by the overall SSP package—that is, the proposals that will be in the forthcoming SSP uprating order as well as this Bill—will suffer no reduction in the payments made to them when they are sick.
Lord Stallard: My Lords, I have read again the paragraph written by the Low Pay Unit on that aspect of the matter. It says that the figure of 91 per cent. is at the least deceptive and at the most deliberately misleading. Part-time temporary casual workers and home workers are more likely to be excluded from such schemes. Workers employed in small private firms are less likely to be covered. Manual workers are less likely to be covered by such schemes than non manual workers. That organisation does not accept the proposals. The people who work nearest to the victims of these proposals do not accept the Government's rationale and I agree with them.
Lord Henley: My Lords, yet again the noble Lord has accused me of misleading the House. I intervened to correct him and to make quite clear that I was not at any point saying that I was referring to 90 per cent. or 91 per cent. of employees. I was referring to the fact that 91 per cent. of employees work for firms that are covered and they had the opportunity to acquire some coverage. The noble Lord stated that the percentage of manual workers covered was much lower. I accept

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that it is lower, but it has increased a great deal. I do not have the figure in front of me but I believe it is above 80 per cent.
Baroness Seear: My Lords, the noble Lord said that 91 per cent. of employees work for organisations with schemes. However, 40 per cent. of women work part time. Are they eligible for occupational pensions in the organisations which have schemes but which, in certain circumstances, do not allow part-time workers to join? That would put a different complexion on what the noble Lord said. It is not an intention to deceive, but it is a point that should be made clear.
Lord Henley: My Lords, I shall take advice and notify the noble Baroness. My information was that most of the exclusion clauses were based on the length of service and that that varied between three and six months. There are a great many part-time workers who are covered. I shall certainly take advice and write to the noble Baroness. It is obviously a matter to which we can return at a later stage of the Bill.
In conclusion, I re-emphasise what I said in opening this Second Reading debate. Government strategy must be to concentrate available resources on those people who are least likely to have occupational provision and in areas of social security which employers cannot be expected to cover. The provisions in this Bill form part of that strategy and I commend it to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Vocational Training: ECC Report
5.6 p.m.
Baroness Lockwood Baroness Lockwood rose to move, That this House takes note of the report of the European Communities Committee on Vocational Training and Re-training (21st Report, 1989–90, HL Paper 78).
The noble Baroness said: My Lords, the committee's report is based on Commission proposals for a Community action programme for continuing vocational training and re-training, known as the FORCE programme. The aim of the FORCE programme is to improve vocational training and re-trailing in the Community.
The four specific objectives of the programme are: to encourage greater investment in continuing vocational training; to support innovation; to promote the planning and design of schemes which take account of the completion of the internal market; and to contribute to the greater effectiveness of training mechanisms. In common with most witnesses, the committee agrees with the objectives of the FORCE programme. We also share the concern of many witnesses about the poor performance of the United Kingdom in the field of vocational training compared with many other countries both in the Community and outside. This concern was reinforced by the visit of Sub-Committee C to Paris to learn about the excellent French system of vocational
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training and by the copious evidence which we received on the German dual system of vocational training.
During the course of the sub-committee's inquiry the Commission's proposals were adopted by the Council. Therefore, the report concentrates on the United Kingdom's ability to meet the requirements of the now adopted FORCE programme. In the light of the Commission's proposals to member states to submit a strategic framework for achieving the objectives of the FORCE programme, the committee considered whether the United Kingdom had an adequate framework to fulfil the requirement.
We concluded that the United Kingdom does not have a clearly articulated national strategic framework for training. The committee shares the view expressed by the CBI, the TUC and several other witnesses that such a strategic framework is needed in the United Kingdom. We believe that as far as possible this framework should be based on consensus between the two sides of industry—the so-called social partners. In accordance with the FORCE programme the framework should be promulgated by means of annual reports to be laid before Parliament and discussed with the two sides of industry. The reports should include past achievements in the field of vocational training and set clear targets for the immediate future.
Six years ago the Select Committee's report on Youth Training in the EC concluded:
"in the United Kingdom there is an urgent need to bring together the whole education, training and employment of young people in a coherent framework which can he understood by employers, parents, educators and trainers, and above all by the young people themselves".
The committee endorses that conclusion which it feels is very relevant today. It believes that such a framework is needed to encompass the provision of vocational training for all age groups in the United Kingdom.
The committee accordingly proposes that a comprehensive national strategic framework for training should include the following 10 points: the analysis of future national training requirements, particularly those resulting from technological change; clear objectives and detailed targets for improving training performance; plans for installing and maintaining a single national system of vocational qualifications and standards; the provision of individual records of achievement prepared for all young people; arrangements for providing individuals with access to the information they need to make informed training and career choices; proposals for monitoring and improving training quality; ways of improving access to training, including policies designed to ensure equal opportunities; specific proposals for increasing women's access to training, particularly for returners to the labour market; specific incentives to be used to encourage employers and employees, including small businesses, to improve training; plans for monitoring and evaluating national training performance.
Each aspect of this framework and the legislative underpinning necessary is considered in the report, which states that in each of these areas the respective responsibilities of the Government, employers and employees should be clearly defined. The strategic framework should also specify who will be responsible for payment.
Vocational training in the United Kingdom has been criticised for more than a century. Given the scale of the gap between the United Kingdom and its main industrial competitors, and given the long history of failure which has marked the voluntary approach to training in this country, the committee considers that some form of statutory underpinning is needed to act as a catalyst for change. The committee is convinced that the right place to start is to increase the access of young people to training, as 30 per cent. of young people currently go straight from school into jobs with little or no training.
We conclude that legislation should be introduced to ensure that all 16 to 18 year-olds are provided with education or training. Any employer employing a 16 to 18 year-old full time should be obliged by law to arrange an appropriate programme of training leading to a recognised qualification. Individuals aged 16 to 18 would have the freedom of choice to remain at school, to undertake full-time training or take up a job with training.
Such provision would require a minimum amount of legislation and would not entail a heavy handed bureaucracy. The legislation would ensure that all young people in the United Kingdom could start their working life with a basic grounding of training along the lines which operate in the Federal Republic of Germany and in France. The committee welcomed the introduction of training credits but felt that such credits on their own were not enough and needed legislative underpinning. The committee noted the Government's repeated opposition to Community measures which could add to employment costs. The experience of the United Kingdom's main industrial competitors led the committee to conclude that effectively managed vocational training should be viewed as an investment rather than as a cost. We are convinced that a substantial increase in the quantity and an improvement in the quality of training in the United Kingdom would result in increased productivity and industrial competitiveness.
The Government have already issued a very full response to the committee's report. I am most grateful to the Department of Employment for the effort which it has put into that response and for its co-operation with the sub-committee's inquiry. Nevertheless, there are two important aspects of the response which I feel are inadequate. I have given the Secretary of State notice of my intention to raise these points during the debate and I hope that the Minister will cover them in his reply.
First, I have already mentioned that one of the committee's principal recommendations was that legislation should be introduced to ensure that all 16 to 18 year-olds are provided with education or training. The Government's response does not directly comment on that recommendation, though on the penultimate page
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the response states that the Government do not believe that worthwhile and effective training can be guaranteed by legislation and compulsion, with all the associated bureaucracies and inflexibilities. As it was not the committee's intention to recommend a bureaucratic, inflexible system, Sub-committee C agreed that I should raise this matter during the debate. I hope that the Minister will respond.
Secondly, the report suggested that a personal income tax allowance should be considered as a further incentive to individual investment and training. The Government's response to that point relates principally to employer funded training. I would welcome the Minister's reply to the specific subject of tax incentives for individuals.
The committee and the Government are at one in recognising the need to change attitudes to training, but we diverge on how this might be done. The Government's main strategic approach is through the locally based TECs, which they claim will know best how the problems of their area can be dealt with and are therefore the best means of bringing about an improvement in skills. The committee's opinion is that there must be a much stronger lead from the Government. I do not want to expand on the role of TECs as I know that the noble Baroness, Lady Flather, intends to do that in her maiden speech, to which we all very much look forward.
At paragraph 61 of the report we refer to the evidence of the then Minister, Mr. Tim Eggar. He considered that while society thought it right that children should stay at school up to the age of 16, there was not at present the same degree of consensus that young people should either stay on at school until they were 18 or should have to undergo training.
In the previous paragraph of the report we refer to information provided by the Ministry of Education and Science in the Federal Republic of Germany. The Ministry stated:
"It would imply the renunciation of economic potential, the acceptance of future unemployment and associated social problems as well as the non-fulfilment of the educational mandate if not all school leavers were given full vocational qualifications after compulsory schooling. This is why there is a national consensus of all social and political forces in the Federal Republic of Germany to the effect that all school leavers should receive as qualified a vocational training as possible".
That presents a tremendous contrast. If Mr. Eggar is right about the state of opinion in this country, surely that makes it even more important for the Government to mount a persistent attack on those attitudes.
The committee was impressed by the training targets set by the CBI. It felt that a previous Secretary of State for Employment, Mr. Norman Fowler, had been going along the right lines when he mentioned stretching targets in a speech made in December 1989. Regrettably, those targets have not been endorsed by the Government, though in his response to the committee the Secretary of State welcomed the setting of targets by the CBI.
Finally, I should like to underline the committee's conclusions on equal opportunities and the training

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needs of women in the light of demographic factors. The report draws attention to the high cost of child care provision, which, if paid for out of taxed income, provides little incentive for women either to re-train or to return to work. The committee concluded that the lack o child care facilities and the high cost entailed when care is available remain major obstacles which prevent women enjoying the benefits of training. To encourage women in this respect, the committee recommended the extension of tax relief to the cost of child care in all cases.
I should like to extend my warm thanks and appreciation to members of Sub-Committee C for their support in this inquiry. I should like to put on record our particular thanks to our specialist adviser, Mr. Quentin Thompson, and to Dr. Philippa Tudor, the clerk to the committee, for the excellent way in which she assisted us.
Moved, That this House takes note of the report of the European Communities Committee on Vocational Training and Re-training (21st Report, 1989–90, HL Paper 78).—(Baroness Lockwood.)
5.22 p.m.
Baroness Flather: My Lords, I am conscious of the honour accorded to me by Her Majesty's Government in making me a Member of your Lordships' House. I am grateful that it was seen fit to choose one whose origin lie in India. As a British citizen married to an Englishman, I have spent all my working life here and also obtained my legal qualifications in this country. In addition to my other interests, I hope that I may in some small measure contribute to a better understanding of the concerns of minority groups living in this country.
I should like to congratulate the noble Baroness, Lady Lockwood, for producing an excellent report. It bears all the hallmarks of a good report: it is short; it is to the point; and, it is readable. I should like to begin by quoting the conclusions of a Royal Commission. It stated:
"Neglect of training is a key reason for Britain's lack of competitiveness".
That Royal Commission on Technical Instruction sat in 1884. Sadly, it has an all too familiar ring to us even today. For well over a 100 years we have been aware of our national shortcomings over skill levels in the workforce, especially when compared to that of Germany. Its widely admired "dual system" has ensured that the great majority of its younger people enter the workforce with a proper vocational qualification. That covers not just 16 year-old or 17 year-old school-leavers, but also graduates. The learning culture in that country is strong enough to motivate people, even in their mid to late-twenties, to accept reduced pay while building their personal skills and qualifications.
This year Germany accepted an unprecedented challenge. At the historic moment of unification, resources will have to be found to tackle the neglect and demotivation of the past 40 years. Having just returned from Eastern Germany, I know that the people will need all the support and goodwill that they
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can obtain. In the United Kingdom, we have had a history of neglect in this whole area. Governments have gone for deceptive short-term benefits of minimal public investment. Too many employers have claimed that when business is bad they cannot afford training, and that when it is good there is no time.
During this year, at last, the Government have made an imaginative and significant effort to get to grips with the situation by drawing in business leaders on a massive scale, to take charge of a revitalised training structure. I refer to the rapidly evolving network of training and enterprise councils of which there will be about 80 in England and Wales by next year. We can already see significant benefits flowing from the first few to begin operation. For example, in the training and enterprise council in my area, the Thames Valley, we have increased the number of young people studying for a qualification while employed by about 25 per cent. over last year. Like us, other training and enterprise councils are working ever more closely with educationists to reinforce industrial links and encourage more young people to stay on in higher or further education.
As has already been stated, in their response to the Select Committee's report, the Government highlighted the role of the TECs. They said:
"We believe that the formation of employer-led TECs is a key to meeting the challenge".
However, the launch of the TECs earlier this year was accompanied by a reduction in the money available for training. I understand that a further reduction is planned for next year. We cannot afford to let our investment slide just at the moment when we have a most hopeful initiative before us.
There is no getting away from the fact that world class results will cost money in the short term, even though in the longer run it will be cheaper than our past policy of hopeful drifting. It is no good politicians hoping that the transfer of public spending to private sector spending will cover all aspects of the matter. I urge the Government to think again on that point.
In a truly British way, all this depends on a great deal of voluntary action. For example, TEC directors are unpaid and give a great deal of their time, as I know to my cost. There will be 80 TECs all over the country and it is inevitable that they will function in a variety of different ways, as indeed is the intention. Moreover, no doubt they will also have a variety of different standards. I believe it is essential that they should operate within the framework of nationally agreed targets and that their performance should be measured against objective criteria set by the Government. That will not make them any the less responsive to local needs or less flexible; on the contrary, it will help in concentrating the mind and will achieve clarity of purpose. A rigorously defined quality standard, with emphasis on results, will ensure an evenness of purpose across the country.
In this drive for qualifications we must not forget those with special needs, whether that means the ethnic minorities, the disabled or any other disadvantaged group. I am deeply concerned that in the European context equal opportunities have come

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to cover only the opportunities for women. The report takes no note of the needs of any other group. We are the only member state in the European Community to have enacted legislation to protect minorities from discrimination and to encourage special training and educational programmes to remedy past disadvantage.
I must express disappointment that the Commission for Racial Equality was not invited to give evidence to the committee in this area of concern. It is to be hoped that the TECs will use the provisions of the Race Relations Act to set up special programmes. But, so far, only the Leeds TEC has announced firm plans to provide courses in managerial training. There are some other notable examples of employer-led schemes. They include the BBC, the TSB and the West Midlands Police access training which is open to all under-achievers.
We need to tap the unused potential of ethnic minorities, and ensure that they do not end up as second-class citizens of the new Europe. We stand at the threshold of a most monumental development for Europe. On 1st January 1993, all our young people will be free to seek their future in a Community of 12 nation states. We must not sell them short by denying them the best preparation possible, whether in languages or in skills. They will not thank us if they lose out to others better prepared because we have not had the far-sightedness to invest in their future.
5.30 p.m.
Lord Rochester: My Lords, it is a great privilege for me on behalf of the House to congratulate the noble Baroness, Lady Flather, on her maiden speech. I found it convincing and incisive. Somehow, the quiet way in which it was delivered added to its authority. The noble Baroness has considerable experience of law, education, local government and other matters. I have no doubt that she will prove to be a most valuable Member of your Lordships' House, and we look forward to the many further contributions that we hope she will make to our debates.
I was not a member of the committee which produced the report. I am therefore all the more delighted to welcome its contents from these Benches. The noble Baroness, Lady Lockwood, dealt with the report so comprehensively that I can perhaps best contribute to the debate by concentrating on just a few key points. First, I support wholeheartedly the committee's conclusion that there is a need for a clearly articulated national strategic framework for training in the United Kingdom, and that that training should, so far as possible, be based upon a consensus.
In April last year, I was privileged to introduce a debate on training in your Lordships' House. On that occasion, I acknowledged that the Government's White Paper entitled Employment for the 1990s, outlined a new structure for training nationally, but not a policy involving the Government, employers, training producers and others. The extent to which that paper relied on rhetoric suggested a command model altogether inappropriate for its evident aim to
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effect cultural change in the nation's approach to training. In contrast, the new training initiative of 1981 was widely seen as a national training strategy, and employers, trade unions, and educational and training organisations were all involved in its formulation.
Within the existing framework, as we have been told, employer-led TECs are being established at local level to plan and deliver training. I welcome that emphasis on local delivery, and know from experience that training is often at its best when it is provided by employers, especially by large companies.
I am also convinced that if we are to compete successfully within Europe and outside the Community, training must be regarded as a long-term investment secured by political stability and the involvement of all those elements in society which have a stake in the problem. I therefore regret that, in the absence of a lead from the Government, it has been left to the CBI to arrange for representatives of the TUC, chambers of commerce, TECs, local authorities and educational organisations—almost everyone except the Government—to meet in an effort to draw up national training targets.
The CBI hoped to achieve a consensus on training by the end of next March based on qualifications and standards set by the National Council for Vocational Qualifications. Its initiative, as the noble Baroness, Lady Lockwood, said, follows the Government's decision not merely to withdraw support from targets previously set for the 1990s by Sir Norman Fowler when he was Secretary of State, but to abandon any further attempt to set such objectives. Since the Government are apparently unwilling to take any responsibility for establishing national targets, I hope that they will at least accept the recommendations contained in the report, and that they will endorse those set by others as United Kingdom training objectives.
The second major matter upon which I should like to speak is the problem which has bedevilled this country's training effort for the past 30 years or more —who is to pay for it? The committee observed how many witnesses indicated that exhortation alone was unlikely to be adequate to achieve the major change in cultural attitudes towards training needed in the United Kingdom.
The levy grant system has been tried and widely found to be wanting in terms of the bureaucracy and inflexibility that accompanied it. Various suggestions were made to the committee designed to provide more positive incentives to help solve the problem. The CBI, as the noble Baroness said, proposed a personal income tax allowance of, let us say, £1,000 per annum, for anyone working towards a nationally recognised qualification in their own time where a training credit was not also being used.
The committee supported that recommendation, but it would of course cost the Exchequer money. In that connection, the Institute of Personnel Management made a challenging proposal in its recently published discussion paper entitled A national

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development agenda. In that document the institute has elaborated upon the principles put forward in its evidence to the committee that there should be access to continuous development in the form of self-directed learning throughout an individual's career; and that the learning needs of the individual should be integrated with those of the employing organisation.
Against that background, the institute proposes as a further principlethat the cost of learning should be shared among those who benefit from it—the state, the employer and the individuals concerned. The proportion of the cost to be borne by each beneficiary would vary according to the type of learning, the stage at which it occurred in the learner's experience and its cost in relation to factors such as time, method and personal opportunity. For example, it argued that since the state would benefit from the general education of young people to the age of 18—on a full or part-time basis—that education should be paid for by the state. It further makes the bold suggestion that because the training individuals receive should enhance their job prospects, those individuals should themselves be prepared to contribute towards its cost. Thus young people might be expected to accept a trainee-level wage in exchange for high quality education and training. I recall that as long ago as 1982 your Lordships' Select Committee on unemployment recommended in its report:
"Because … the wage earned by school leavers who do obtain employment is often too high in relation to the adult wage (especially where there is no training), the gap between school leavers' and adult wages should widen, as new wage agreements are made".
In my view, the IPM's proposal merits the discussion that it suggests with the Government, political parties, employers, trade unions, education and training professionals and other interested parties.
Surely the need for continuity is just as great in national training policy as in matters affecting the finance and structure of local government. If consultation concerning the future of local taxation is thought desirable—and I commend the Government for the initiative that they have taken in that respect —the constant changes affecting the organisation and funding of training that we have experienced since the 1960s point just as clearly in the same direction.
It is sad, as the noble Baroness, Lady Flather, said, that just at the time when we are discussing the adoption of a community action programme for the development of continuing vocational training the Government have seen fit, without warning, to cut expenditure by the Department of Employment in real terms by £150 million in 1991–92 and £216 million in 1992–93. Like the noble Baroness, I very much hope that the Government will have second thoughts about that.
However the vexed question of payment is viewed, I am convinced that the committee is justified in its conclusion that some form of statutory underpinning is needed as a catalyst for progress and that the right place to start is to increase the access of young people to training. On these Benches we have for years advocated that there should be legislation to ensure
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that, as elsewhere in Western Europe, all 16 to 18 year-olds should be provided with education or training.
The noble Baroness, Lady Lockwood, told us that the committee concluded that this could best be achieved by obliging any organisation employing someone in that age group full-time to arrange an appropriate programme of training leading to a recognised qualification. The report rightly says that this would require a minimum amount of legislation and would not entail a heavy handed bureaucracy.
Perhaps the most telling conclusion from the committee comes in the penultimate paragraph of its report. There the Government's opposition to Community measures which could acid to employment costs is noted, but the committee affirms its belief that effective vocational training is and should be viewed as an investment and not as a cost. It is convinced that a substantial increase is needed in both the quantity and quality of training. It considers that without it there is a severe risk of a steady and accelerating relative decline in the UK economy which will become increasingly difficult to reverse. In its view there is not much time left for action; I agree. That conclusion is given all the more urgency by the evidence recently supplied to the Engineering Industry Training Board that with the onset of a recession, expenditure on training in manufacturing industry in some parts of the North has dropped by 20 per cent. and that in areas of chronic skill shortages traineeships are being reduced.
Finally, I wish to revert to a matter that I raised in the debate last year on training, to which I referred earlier. At that time, I said that the White Paper Employment for the 1990s was written as though the only people in need of training were those in industry and commerce. It seemed to ignore the fact that the wealth spending public services could and should contribute to our prosperity just as much as the business sector by becoming more effective. I suggested then that we are all part of a complex, inter-dependent society in which the public services, including national and local government, should promote a training culture, like everyone else.
Yet, the White Paper contained hardly a mention of what still needed to be done in those services. Indeed, at one point it specifically stated:
"Developing training through life is not primarily a government responsibility".
In my view it certainly is. Credibility is lacking if in any strategy for change there is no acknowledgment that its originators are also in need of reform. The Government are the initiators of the policy which training and enterprise councils have been asked to implement. The Government are at least as much a part of the problem as wealth creators.
Against that background, I should be grateful if, when the noble Viscount, Lord Ullswater, replies to the debate, he would give me some indication of what progress has been made during the past 18 months in promoting training in government departments. In my

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view it is in that way that the Government can best demonstrate the extent to which they practise what they preach.
5.46 p.m.
Lord Brain: My Lords, it gives me great pleasure to follow the noble Lord, Lord Rochester, in congratulating the noble Baroness, Lady Flather, on her maiden speech. I shall not give a curriculum vitae as he did; I shall keep my comments short. Hers was a challenging speech; she challenged us in the committee over an omission. She challenged the House and the Government slightly on one or two points. But it was not controversial. I look forward to hearing her speak in the House as well as assisting us in future in the committee. I am sure she has a great contribution to make to all our debates.
I thank the noble Baroness, Lady Lockwood, for reporting so fully on the discussions we held in the committee and especially on the 10 points that were the framework of our findings and what we felt so strongly about in the committee. The theme through it all was that the committee felt that the Government should give a stronger lead and perhaps also more finance. I shall come to that later.
The noble Lord, Lord Rochester, dealt with matters industrial so comprehensively that I shall be able to reduce my speech considerably. He made many of the points I was going to make, and in a debate with so many speakers it is pointless repeating them. I support many of the points he made.
In our report we draw attention to the great importance of the National Council for Vocational Qualifications. It is a key to training especially for young people and also, I hope, as the years go by and they are able to develop their Levels Four and Five, for older people. The committee noted —and I emphasise our note on this point—that the Government have pump-primed the NCVQ well, but it is taking a long time and a tremendous amount of work needs to be done in setting up vocational qualifications. The committee felt that there was still a need for continuing funding because the NCVQ will become self-supporting only when it starts granting certificates of vocational qualification. These depend on the qualifications being set and on people spending two, or perhaps three or five, years obtaining the qualifications. I do not believe that the cash flow exists; there is a need for more funding.
The TECs can contribute a great deal to our future. There were some comments—and I shall not divert on them—that perhaps there was a need for greater union participation. We may need to examine that.
I wish to draw on the evidence that we received from France, partly because I was there to take the evidence. We went to France 20 years after the French equivalents of the TUC and the CBI had got together and decided to do something about training. Much has been made of this point. A joint agreement on training was reached. The CBI is trying to reach such an agreement at the moment. Those French organisations told the government that their initiative
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on training would not work unless it was underpinned by government legislation. They stressed that the legislation need not be complicated or bureaucratic. French companies now spend about 1.5 per cent. of their gross salary bill on training. That situation is regulated and there are tax penalties if that sum is not used. That position is being improved upon. I have a feeling that this country would like to see that kind of underpinning legislation here. There are complaints that some small and large companies do not spend money on training but poach trained individuals. After 1991 it will not just be a question of this country poaching individuals or having individuals poached; there will be a European dimension to the problem. I believe that we require not just British legislative underpinning but rather European Community legislative underpinning. We need Community legislation on the amount to be spent on training and the way it is funded.
This is a complicated matter. I realise that one way of underpinning this legislation is through taxation. Taxation and the giving of training credits to companies, which they have to use or pay for other people's training, may be an answer. The Government have produced a good initiative on training credits for young people. However, I suggest that training credits should be given to companies where they do not have training facilities. The training credits could perhaps be managed by the training and enterprise councils. They might be useful as a means of funding the TECs. This matter needs to be considered.
I now wish to turn to a current problem. We shall hear a lot this evening about the training of young people. However, I believe that the training of older people is also important in this time of recession. Such people need to be re-trained, perhaps because the company they work for has gone out of business or perhaps because it is looking at its own internal workings as a result of the recession. Perhaps the company has decided that it must turn either left or right. I hope the House will pardon the political gestures. In other words, it must divert from the path it is following at present. Such a change will require new skills on the part of the workforce. Unfortunately two things happen in such a situation. The staff are possibly on short-time working and therefore they are available for training. However, the accountants of most companies decide that training must be cut as their companies are facing difficulties.
The other problem is that if companies are not profitable the fact that training is a cost that can be set against corporation tax means, unfortunately, that government funding through negative taxation, if one wishes to call it that, is not available for training. There is a need to look again at how training can be funded in this time of recession. I am not talking necessarily about a training levy. Perhaps the Government will have to pump-prime and pull the money back subsequently from companies by charging higher fees. After all, courses have to be set up and the TECs need capital to enable them to move forward. At the moment there is a problem as companies do not have the necessary capital.

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I wish to pick up a point made about training in the Government's response to the committee's report. The Government stated:
"The first rule of setting objectives is to have the capacity to ensure they are reached".
I quite agree with that. The Government continued:
"While the Government can and does influence the training investment decisions of businesses, it patently cannot control the amount employers invest or the type of training purchased".
I believe that the Government need to take a much stronger lead in this matter. I believe that the CBI and the TUC should get together to produce a report, and that more input should come from government departments. The noble Lord, Lord Rochester, referred to that point. What are the Government doing about training? How can they feed people in and out of the training situation? Can they advise people in industry how to work better with government departments, on exports for example? A lot of cross-boundary flow exists as regards training that has not yet been tackled. The Government should give a lead in this matter. I support the noble Baroness in proposing that the recommendations of the report be accepted.
5.55 p.m.
Baroness David: My Lords, our chairman, my noble friend Lady Lockwood has given the House an admirable summary of the FORCE programme and the committee's response to it. Therefore I believe that the job of other speakers should be to highlight the points they consider important or the points which need emphasis. There is overwhelming evidence that in terms of training and the numbers of young people staying on in education, the United Kingdom lags far behind not only most countries in Europe but also Japan, South Korea and Thailand.
Our vocational training system has developed in an ad hoc, piecemeal way. There have been constant changes. Now there has been a change in attitude. In 1989 the CBI and the TUC produced papers entitled Towards a Skills Revolution and Skills 2000. The degree of consensus between the two organisations was remarkable. They agreed on the need for a massive expansion of training to attain a skills revolution and so combat existing skills shortages; they agreed too on the need for continued learning throughout people's working lives.
In their response to our report, the Government agreed with the committee that sufficient and appropriate training of the right quality was essential for future competitiveness. They stated:
"Well directed and effective training is a vital investment".
There is a great deal of agreement on the need for training. But there is disagreement on how it is to be achieved. The Government have opposed on principle any Community measures that could add to employment costs. The Community social charter declares that,
"every worker of the European Community must be able to have access to vocational training and to receive such training throughout his working life".
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The charter gives people the right to training. However, it has not been signed by the UK. The UK is the only member state not to have signed it. Behind the Government's refusal to sign is the belief that however necessary it is to increase vocational training and however much an investment by a company in vocational training would he a remunerative investment, any burdening of employers with legal requirements would be counter-productive and would increase costs. The committee believes that without some compulsion little will be done. The committee further believes that it is hopeless to rely on companies to act voluntarily.
The CBI believes that any employment of under-18 year-olds which does not involve structured education and training leading to recognised qualifications should be eliminated. The CBI argues that this could be achieved through voluntary means if young people, educationalists, the Government and the two sides of industry come together to make it happen. On the other hand Sir John Cassels, a former Permanent Secretary at the Department of Employment and author of Britain's Real Skill Shortage, thinks it implausible to believe that such a major change could be effected by voluntary means. He points out that young people can earn relatively high wages on leaving school at 16 and that these earnings provide a strong disincentive to undertake training. Employers are tempted to view 16 and 17 year-olds as cheap labour. Sir John proposes contracts of employment for 16 to 18 year-olds which would include an obligation to train and would lead to a recognised qualification. He believes that the Secretary of State should regulate the pay of young people.
That brings me to the question of legislation. The committee came to the view that some kind of statutory underpinning was needed to act as a catalyst for change. I endorse that view strongly. The voluntary approach has failed. As my noble friend Lady Lockwood remarked, the committee concluded that legislation should be introduced which would ensure that all 16 to 18 year-olds were provided with education or training, and that every employer who employed a 16 to 18 year-old full-tune would be obliged by law to arrange an appropriate programme of training.
It is a mistake to refer to "education or training". Young people, and indeed older people, need both. By saying "or" we are in danger of continuing the disastrous division in this country between the academic and the vocational. If we want to get on we must put a stop to that.
This leads me to comment on our educational system, which has been so unsuccessful in keeping 16 year-olds in education. The total is now about 50 per cent. of the age group, a slight improvement over the past year or two. I believe that tertiary colleges are a better bet than sixth forms or sixth-form colleges as they provide both academic and vocational courses in the same place. The students can take a mixture of both and need not be confined to one stream or another.

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There should be much greater freedom to take exams such as BTEC in schools and colleges working under school regulations. Incidentally, I believe that it would be a very good thing to get rid of school regulations altogether. I believe that there is some movement regarding BTEC; I hope that the Minister can give further information. It is a type of exam that appeals to certain children very much more than A-levels. BTEC provides an attractive alternative for many and a different route to higher education. It could help to keep young people in the educational system.
The FORCE programme proposed a framework for vocational training. My noble friend Lady Lockwood quoted the sub-committee's report, which asked for a coherent framework. She quoted from the sub-committee's report on youth training in the EC, which appeared in 1984, and which asked at that time for a coherent framework. Six years have gone by since then: we still have no framework. There was hope of one in Mr. Fowler's statement in December 1989 when he announced a number of admirable objectives for young people and adults. They would have given the right to training by the end of 1992; also, targets were set for certain qualifications, which appear in paragraph 50 of our report. Mr. Fowler said:
"Unless we set ourselves those kinds of stretching targets we shall not meet the need for upgrading and multi-skilling in a decade of continuing rapid change, nor shall we adequately meet the rapidly growing need for re-skilling of older workers or of those returning to the job market".
Unfortunately Mr. Fowler went. And the objectives were withdrawn by Mr. Howard.
One cannot help but be suspicious of the Government's commitment and therefore of their understanding of the need for urgent action. When Mr. Eggar was tackled by the committee there was a certain amount of ambiguity in his response. I thought that he was a bit shifty.
Our committee proposed a comprehensive national strategic framework which included 10 points. My noble friend Lady Lockwood quoted them. I should like to mention a few. Plans for installing and maintaining a single national system of vocational qualifications and standards are well under way with the National Council for Vocational Qualifications. Provided it has enough funds and is not expected to be self-financing, as the Government seem to want, good progress should be made.
Points VI and X relate to proposals for monitoring and improving training quality and monitoring and evaluating national training performance. I should like to know from the Minister what plans the Government have for undertaking that monitoring. To what extent will the TECs and the training standards advisory services be involved?
Points VII and VIII refer to improving access to training. What specific measures have the Government in mind? To what extent for example, will distance learning be involved? The careers service could be of great help here. It should be extended to
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include the entire workforce and there should be increased funding. The committee said that it was for consideration whether the service needed to be independent of LEAs as a result of that extension. I believe that it would be a pity to remove it from the local authorities. There is a very good background of knowledge and experience there to build on. As usual, it is resources that are lacking.
In the internal review of the careers service which the ACC and the AMA undertook and discussed with the Department of Employment, there is a paragraph which is worth quoting:
"The Careers Service is central to the delivery of information, advice and guidance … It also needs to be recognised that the Careers Service … is involved in wider activities than these. Within local authorities the Careers Service often has important links with economic development departments, library and information services, housing, and social services departments. Within the education department it has an important input to the planning of further education and training and is often employed as an agency to assist in the delivery of various Training Agency programmes. It also … has a role in projects related to educational advice and guidance specifically directed at adults and adult literacy and basic skills schemes".
I hope that before decisions are taken those points will be borne in mind. If the Minister can give any up-to-date information on the review I should be grateful.
I trust that the Government's quite warm reception of, and agreement with, the report will mean action and that the TECs, on which the Department of Employment places such reliance, will achieve the success which is hoped for. Once again, they will not do so without adequate resources. The South and East Cheshire TEC, when it gave evidence, clearly felt that more money was needed to do an effective job—for transport and travel, to take one example.
The Government's cutting of expenditure on training, which the noble Baroness, Lady Flather, mentioned in her excellent maiden speech, at this time, makes one both doubting and despondent. That and the negative response to suggestions for various tax incentives and the objections to legislative underpinning make one fear that the commitment to real change in vocational training and re-training is much less than it should be and that the urgency that the committee felt was essential—in its words,
"there is not much time left for action—
has not been recognised by the Government. I hope that when the Minister replies he will dissipate some of those fears.
6.6 p.m.
Baroness Faithfull: My Lords, with other noble Peers I pay tribute to my noble friend Lady Flather on her maiden speech. She and I served on the Swann Committee for seven years looking into the question of the education of children from ethnic groups. I therefore know how much she has to offer to your Lordships' House. I also congratulate my friend the noble Baroness, Lady Lockwood, and her committee on the report.

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I wish to ask only one question. Part II of the report deals with vocational training in two member states —Germany and France. Paragraph 5 reads:
"Activities to be initiated by the Commission could include the following: support for innovation in continuing vocational training, such as: exchange schemes for staff involved in training".
I appreciate that the report deals with Europe. Howe%er, I wonder whether my noble friend the Minister could let me know whether the scheme could be extended to countries outside Europe. I have read and representations have been made to me that young people in Russia aged 16 to 18 at the moment are feeling somewhat bemused by the political changes in their country, which we all welcome. Would it be possible for there to be an exchange between young people and those who train them in Russia and those involved in training in this country? It is only a small question but I should be grateful if my noble friend could let me have a reply.
6.8 p.m.
Lord Bonham-Carter: My Lords, first, I have an apology to make. If the debate continues much later than 7.45 p.m. I shall have to slip away owing to a previous engagement.
I too should like to congratulate the noble Baroness, Lady Flather, on her maiden speech, which I listened to with great interest. I accept her mild rebuke that in the course of our consultations we did not take evidence from the CRE. I also appreciated the importance which she attached to the training of ethnic minority groups, who are obviously particularly vulnerable to the absence of training facilities.
I should also like to thank our chairman, the noble Baroness, Lady Lockwood, who looked after us so effectively and summarised the conclusions of our report so comprehensively and fairly. That makes it all the less necessary for those of us who were on the committee to spend time rehearsing the outlines of what vie discussed. That has already been done. I shall do my best to be brief in addressing myself to some of the problems with which we are confronted.
One cannot very well start speaking about this whole important topic without introducing one's remarks with the depressing conclusion reached by the committee. It has already been referred to but it needs repeating: a substantial increase is needed in both the quantity and quality of training in the United Kingdom and unless that is achieved there is a severe risk of a steady and accelerating decline in the United Kingdom's economy. That has been said before and events have proved it to be correct. I suggest that the absence of vocational training in this country is one of the major factors that lie behind our relatively poor economic performance.
Not one single witness who came before the committee denied that in today's world training is the key to productivity. In connection with this debate I would add that for the purposes of our discussion to distinguish between education and training is somewhat unnecessary and unhelpful. Both are part of one process. I feel that the Government's responsibility extends beyond education to training.
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To pretend that when people leave school suddenly the Government no longer have any responsibility for training them seems to me to be untrue as well as extremely unwise. Training is merely a specialised form of education and should be recognised as such.
In the course of this debate the deplorable situation in this country compared with other countries has not been made quite as starkly evident as it should have been. It is the case that by the end of this century South Korea hopes that 80 per cent. of its young people will reach university entrance standard and France expects that 75 per cent. of her young people will do so, whereas the United Kingdom's ambitious target is 30 per cent. To take another indicator, today 95 per cent. of Japanese stay in education until they are 16 or 18; over 80 per cent. of young people do so in the United States; at best only 50 per cent. do so in this country.
One-third of the British workforce has received no training of any sort whatever. To take one trade in particular—the furniture industry—nine-tenths of the people in that industry in Germany will have had three years' vocational training and have a qualification. Only one-tenth of comparable persons in this country will have received such training. It is in the face of those intractable facts that the Government's approach to the crisis must be judged. If we continue along the route on which we are set at the moment, we are bound to slip behind our competitors in Europe and elsewhere.
No one denies that state of affairs and the Government accept the FORCE proposals; but they do not will the means to put the FORCE proposals into effect. I find that profoundly disappointing. The Government have no strategic plan. They refuse to set targets. They are reducing the money that they offer for training. They persist in relying on the voluntary system. They assert that there is no consensus to the effect that young people should either stay on at school or undergo training to the age of 16 or 17.
I do not know where they are looking for such consensus. There was universal consensus among those who gave evidence to us that this was desirable. I have not heard anyone say that it was not desirable. Does anyone solemnly suggest that it is a good thing that young people should leave school at 16 and not receive further training or education? Is that the Government's view about the attitudes in this country? If so, how can we change the situation? That is the task that confronts us. How can we get out of a situation of rather smug inertia in which we do nothing?
I hope that in reply to the debate the Minister will not simply repeat what was said in evidence before the committee, which we have read and heard. Having read and heard that evidence, it is not unfair to say that the committee came to the conclusion that the Government did not quite measure up to the needs of the moment. I hope that they will reconsider the need for a strategy and the need to set targets. I hope that they will explain why, unlike other countries in Western Europe, they have chosen this moment to decrease their financial contribution to training; or

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perhaps we should regard that as just part of their general neglect of infrastructure which appears to be a policy that they pursue in many areas of our life.
Given the gap which exists and which I suggest is growing between the United Kingdom and its competitors, and given the long history of failure which has marked the voluntary approach, the case for a statutory approach starting with the 16 to 17 year-olds, as recommended by the committee, seems overwhelming. If the Government intend to reject that recommendation, they must produce some very substantial arguments as to why.
At another inquiry conducted by one of the sub-committees of the Select Committee on the European Communities which is taking place at the moment members were told that for every £1 invested in the reform of the economies of Central and Eastern Europe £2 ought to be invested in training. That figure is significant. It indicates that the key to economic performance lies in training. If that is what we tell the people of Central and Eastern Europe, we should practise what we preach to them.
6.18 p.m.
Lord Hunter of Newington: My Lords, I should like to add my congratulations to the noble Baroness, Lady Flather. The House will not be surprised to learn that she has already put her imprint on the next report of the sub-committee which is to be considered tomorrow morning. The principal recommendations have been eloquently set out by the chairman and discussed by many other noble Lords. I shall be very brief and will confine my remarks to one important issue. In doing so I refer to the report published in October this year by the Save British Science Society. That organisation and many others, in particular the Royal Society and the research councils, have drawn the attention of government to the deficiencies in our scientific training programme, which of course begins at school.
I believe that that is the key to our problem in a science-based society. All children at secondary school should be taught science by teachers who have an appropriate degree. When I was at school it was reasonable to decide whether to join the science stream or the arts stream. I do not believe that that is any longer the situation. All children must be taught about science in the same way that all children should be taught at least one language at an early age. One has only to see children from several different countries playing on the beach to realise that they are teaching one another French, German or English as they are playing together.
Another aspect which must become the norm rather than the exception—it has been referrd to several times already—is the period of post-16 training with the aim of increasing full-time participation levels to about 70 per cent. to 80 per cent. Everyone should be able to achieve some recognised qualification. The Save British Science organisation also recognises that tertiary education
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should be available to the majority with at least a 50 per cent. increase in science and engineering graduates.
I entirely support the view that if we are to cope with the new European situation we must produce technically trained people with qualifications which are of an international standard. It would seem perfectly possible that if we do not do so those in Europe, in particular from Germany and Italy, with such qualifications will require to be appointed to industrial concerns in this country because our people will be unable to fulfil that need in a competitive sense. That is quite a thought.
The contribution of the noble Lord, Lord Perry of Walton, to the debate on investment in education on 21st November is of great relevance to the problem. He said that the broadening of the school curriculum introduced by the national curriculum left the A-levels unchanged. He regarded that as a grave mistake. That is highly relevant to what we are discussing. A-levels force those who stay at school to study in depth rather than in breadth and that discourages many from remaining at school. Attention must be given to those matters.
The noble Lord's careful study of the national curriculum in science revealed—this is difficult to believe—that few 16 year-olds are expected to reach beyond level 7 of the 10 levels of achievement under the curricula. One extraordinary result of that is that few 16 year-olds taking science will have been told anything about DNA, the genetic code or genetic engineering because those subjects appear only at levels 8, 9 and 10. In the debate he stressed that it is a matter for grave anxiety that more than 70 per cent. of our children will be turned out into the adult world at 16 with no training or education in subjects such as genetic engineering. The broader approach to education training is, I believe, the right one.
The view of the noble Lord, Lord Perry, of the development in technology was even more depressing. Apprenticeships have virtually disappeared. Further education has had to cope with students who are ill-prepared in the basics of maths and physics. The shortage of teachers has been a problem for decades. It is not a new crisis. It has been with us for many years. But the disastrous situation in this country has been very clearly revealed to the European Committee of your Lordships' House as it compares the situation with other Common Market countries, in particular Germany and France.
In their reply to the report of the Select Committee, the Government stated that they believe the formation of local employer-led training and enterprise councils forms the key to meeting that challenge. From what I have said, noble Lords will gather that I wonder about that.
The Government stated that TECs are based on a new concept. Although we have learnt from private industry councils in the United States, TECs have more money, greater scope and more senior industrialists with which to fulfil their missions. The Government are convinced that their ability to sustain

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the interest of top executives will be crucial in the re-skilling of Britain. It is right that employers should take a leading role. I do not disagree with that.
I believe that we must heed what the noble Lord, Lord Perry, said. The crisis is in the schools. The systems that are suggested by the Government will not work, at least not fully and to our satisfaction, unless we deal with an output of school leavers whose basic education in maths and science has been almost entirely neglected.
Where are the resources to come from to provide pupils at school with the hardware necessary to establish work stations? Let us take the simple example of a personal computer, a video disk player and a cable connection to a central library of learning materials. That is what teenagers should be exposed to. If that is provided the situation in schools will be transformed. The noble Lord, Lord Perry, said that, and I believe that in the light of his enormous experience the matter should be urgently examined.
6.25 p.m.
Baroness Turner of Camden: My Lords, I too should like to begin my comments this evening by congratulating the noble Baroness, Lady Flather, to whose maiden speech I listened with great appreciation. I am also serving with her on one of the Select Committees. She has already made a contribution and I look forward to hearing what she has to say on this and many other subjects in the future.
I was a member of the Select Committee whose report is now before your Lordships. With the leave of the House, I therefore speak from the Back Benches instead of from my usual place on the Front Bench. I should like to commend the report, which has been so adequately and comprehensively summarised by our chairman, my noble friend Lady Lockwood. As she indicated, the committee was conscious from the very beginning of the importance of the task that it had been given. It devoted much time and attention to it. We heard a large number of witnesses and looked at much evidence. That is included in what I consider to be a very good report.
We were in no doubt when we started that the issue of vocational training is crucial to future economic success. Our Continental neighbours—those with more successful and productive economies than ours —have devoted a great deal of time and attention to training. They have rightly regarded it as a long-term investment and it is paying off.
Perhaps I may quote from a talk given recently to the third training and enterprise college conference this year by a Berlin academic. It appears in the current issue of the Employment Gazette. She told the conference that in Germany productivity per worker is 60 per cent. higher than in the UK and wages 70 per cent. higher. Some 65 per cent. of German workers have completed two years of vocational training compared with 25 per cent. in Britain. About one-third of young people stay in full-time education at the age of 18 compared with only one-fifth in our county. About 70 per cent. of German school leavers take apprenticeships. Reference is made in our report
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to the training and re-training programmes undertaken in both Germany and France. We were often told in the course of our investigations that Britain lacks a training culture. Yet years ago we had a skill and craft tradition in this country. What has gone wrong?
As our report indicates, the Government have embarked upon a new initiative. They seem to have concluded that the old structures are too bureaucratic and do not work. Hence industrial training boards —with the exception of the construction industry training board, and that for only a limited three-year period—have become non-statutory bodies. The Manpower Services Commission was first transformed into the Training Commission and now has been discontinued altogether. The Government are pinning their hopes on a voluntary approach which they believe must be employer-led and for which employers will largely foot the bill.
The Government seem to have a rooted objection to anything tripartite. Does that stem from a deeply-rooted hostility to trade unions? In the Community the co-operation of the social partners—its name for employees' organisations—is actively sought and encouraged. However, unions in the UK have always been willing to play an active part in encouraging training initiatives.
I recently received from the TUC a document entitled Joint Action over Training. It contains details of a number of joint agreements reached by unions with employers. For example, I refer to a joint union agreement at Fords, an agreement a t British Gas, agreements about transferring skills—training women for jobs previously regarded as career jobs for men in the finance industries—and, interestingly, an initiative at European level between unions and employers to provide qualifications for employees in the retail industry, such qualifications to be recognised throughout Europe. That is a European-based initiative. So although cold-shouldered by the UK Government, unions in the UK have been getting on with the job which their colleagues on the Continent have been doing for some years.
I referred earlier to the disappearance of industry training boards and their substitution by non-statutory bodies. Although we have not dealt with it specifically in the report, I believe it is important to strengthen the role of industry training organisations. The industry/sector level features in both the French and the German training systems. However, following the abolition of the statutory boards, the industry training organisations are in the main small organisations without much in the way of resources, and of course they are entirely employer-led.
The statutory boards were specifically charged with the task of raising the quality of training within firms and had statutory powers to achieve this. The new ITOs do not have that task and it is not clear that the TECs are to assume that role either. ITOs should be asked to set training targets for their sectors, and research and monitoring functions should receive adequate public funding.

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I still have the concern that I have voiced in this House from time to time that the special projects undertaken by the Engineering Industry Training Board—with specific reference to projects for women —will not be carried out by the successor body or indeed by anyone else. What, I ask again, is to happen to the money that used to be obtained from the European Social Fund? With that money the Engineering Industry Training Board was able to embark upon such projects as training for women, and so on.
Our report makes reference to the importance of training for women, and it is hoped that all concerned with training will take this objective very seriously. I am very anxious about the reports of training problems arising from the beginning of the recession, because it seems to me that women's training always suffers if there is a recession. I hope that steps will be taken to ensure that this simply does not happen this time around.
Your Lordships will note that in our report we say that the Government should play a more prominent role in encouraging access to training, particularly for women and women returners. In that area, support services—childcare, parental leave, and so on—are particularly important. Your Lordships will note that we have argued in the report for legislative underpinning, and this has been referred to by a number of speakers already.
Far too many people leave school and go directly into unskilled dead-end employment, and employment without any regulations to protect them either. We believe that young people between the ages of 16 to 18 should either be in full-time education or on an approved training course. That would give young people here the same grounding as that provided in France or Germany.
I am very glad that the noble Lord, Lord Brain, raised the whole question of the older worker, because the resources available in the older work force are often ignored and all too many of them some years ago were given early retirement or redundancy—again, at a time of unemployment. But they have skills and experience to offer and they should not be ignored in training programmes either.
Our report emphasises the need for very much more to be done, and in the main is in support of the commission's proposals. In particular, we want to see a national strategy. With the abolition of the training agency, there is no national body with overall responsibility and with a clear and authoritative national voice. Personally, I believe that that is necessary. Although there have been some developments in recent years that we can all applaud—the establishment of the National Council for Voluntary Qualifications, for example; and I was extremely impressed by the evidence we received, oral and written, from the NCVQ—it is quite clear that a great deal remains to be done in that area.
I hope that our report gives a lead and that what we have said will be taken very seriously by the
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Government. We have had a great skills tradition in former times in this country. After all, we sit in this marvellous Chamber this evening surrounded by evidence of the work of the skilled craftspeople of previous generations. There is no reason why, given the resources and the will, we should not once again be able to say that our skill—the Made in Britain label —is something of which we can all be proud. But I emphasise that there is the need for resources.
I note that the Vice-President of the Institute of Personnel Management recently voiced the view that more money had to be available and even raised again the prospect of some form of training levy. In the same newspaper, on the same day, there was a report about the need of TECs for more resources and concern about the cutting of resources that has taken place. We are simply not spending enough and, as we have said in our report, it should be looked upon not as expenditure but as investment—an investment that we simply cannot afford not to make. I commend the report to your Lordships.
6.35 p.m.
Lord Gisborough: My Lords, I too should like to add my congratulations to the noble Baroness, Lady Flather, on her excellent maiden speech.
The Select Committee's report on training makes sombre reading when one reads the extent to which this country appears to be lagging behind our competitors in Europe and elsewhere. In 1987 in Germany, 93 per cent. of school-leavers started further education, and 88 per cent. gained qualifications. Despite the fact that UK employers spent £18 billion on training in 1986–87—that is 2 per cent. of labour costs—plus a further £3 billion by Government aimed at the young and the unemployed, no less than 52 per cent. of the workforce had received no training. I ask your Lordships to compare France, with 35 per cent. of school leavers reaching university standard, and 30 per cent. in Germany, with a paltry 15 per cent. in Britain.
The CBI task force, we are told, has found the UK workforce to be uneducated, undertrained and underqualified—a very serious indictment. Only half the employees had O-levels. That is an astonishing figure if it is true. British children seem to achieve fewer and lower educational levels and qualifications than most member states. British adults have fewer vocational qualifications and at lower levels than our trading partners—little wonder when seven out of 10 British school-leavers leave school at the minimum leaving age.
The same proportion have only the shortest training before starting their first job or have no training at all. Meanwhile, nine out of 10 of all German employees have vocational qualifications based on a three-year apprentice-type course. In Britain, only one-tenth come near to that category. I find these figures difficult to accept, and I hope that I have misread the report.
There have been various initiatives in the UK, ranging from industrial training boards, the Manpower Services Commission and now to the

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Training Enterprise Council. Those who have seen the operations on the ground cannot fail to have been impressed by the dedication and valuable work done at these training workshops.
The most important of the programmes have been the YTS, the ET and now the YT. ET is quoted as being the biggest training programme for the unemployed in the world. Youth training has cost around £900 million and has been a great success, with 89 per cent. of completers gaining jobs or going into further education.
We have often heard how the young have been made to sweep the floors when on training secondment to employers and how they are used as cheap labour. No doubt there have been cases where this has happened. But I know from experience and from talking to other employers that the vast majority of them go to great lengths to do their best to give the youngsters in their charge as interesting and as varied a time as they can within the confines of their business operation. It is a great pity that some of the schemes have been given a bad name due to the thoughtless conduct of a very small minority of employers.
The White Paper, Employment for the 1990s, states that radical reform of the training system is needed. All the witnesses, including the CBI, the ACC and the TUC, agree about the need for more training and for further training throughout a man's working life. Yet while other governments both in and beyond the Community are increasing their expenditure on training, the UK Government are decreasing their funding from £2,661 million in 1987–88 to a planned £2,399 million in 1991–92. I shall be interested to hear whether the Minister can say how this drop can be justified.
The paragraphs on training targets are interesting. South Korea aims by the year 2000 to have 80 per cent. of its school-leavers reaching university entrance standard. France aims at 75 per cent. It seems that our aim, according to page 15 of the report, is only 30 per cent.
We must set ourselves targets that are similar to or better than those of our competitors, and we must go all out to achieve them. It is no good for labour to claim wages equal to those of Europeans if the quality of their work, through lack of education, disallows them from earning as much per man in output. That is the way to national decline, eventual low wages and low standards of living. If we believe in competition, we must compete.
What are the targets for school-leavers in terms of qualification by the year 2000? It is refreshing to read about the TECs. They are undoubtedly making a major contribution to training, and there is every indication that they are going to be highly successful. We have a TEC in my county. It is interesting to see where the school-leavers first go on leaving school: 10 per cent. went straight to a job; 40 per cent. went to youth training; 30 per cent. went to 6th form; 12 per cent. went to further education, and only 3 per cent.
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went to unemployment. Those figures are a great improvement on the main figures contained in the report.
Of some 3,000 people in youth training on the two year course from April to December, 333 received NVQ at the 1–2 level and only 23 on the 3–4 level. At the higher levels that is a small amount.
There is a national consensus in Germany that all school-leavers should receive vocational training, with a year's free vocational training for those who are backward or who are late developers. There is not the same support in the UK where there is a tendency for some parents to want their children to go out to work at the first opportunity to bring in a wage, regardless of the long-term damage to their earning ability. That is particularly true of some of the poorer families where the need to supplement the family income is highest but where the need for education is also the highest. Some of them oppose education and encourage their young to do likewise. Exhortation is not enough; there must be a change in the cultural attitude to training with incentives that will appeal to those poorer families.
There is a host of youngsters who have opted out of education, who are perhaps playing truant or who are late developers. There are 900 truants in my county. They are all heading for a wasted life on social security; yet many, if not most, of them have great potential, if only they could be "switched on" at the right point in their lives. I mentioned in debate recently the case of Osmond House in Birmingham which is run by Barnardo's. It seems to have found a way of attracting tearaways into the classroom. Perhaps there is something to be learnt from their methods. Adolescent resource centres also pick up a number of them.
There is a great potential of talent that is being wasted. It is essential not only for them but for the nation that they should be tempted back into the classroom or the workshop in order to fulfil themselves and make their contribution to the future of the nation.
6.45 p.m.
Lord Northbourne: My Lords, I should like to thank the noble Baroness, Lady Lockwood, for the skill and courtesy with which she has led us through this inquiry.
The noble Lord, Lord Bonham-Carter, in a very good speech, if I may say so, referred to the unanimity of opinion between the TUC and the CBI, within the committee and on behalf of the Government that we as a country are disastrously behind our competitors in vocational training. Various suggestions have been advanced to explain that state of affairs. The Government in their reply to our report state that no amount of government activity can make an impact unless employers view training as an investment essential to business success. Similarly, individuals need to perceive how training will benefit them. Fundamental changes in attitude are necessary.

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In wondering why attitudes to training are as they are, I am very much seduced by the opinion of Adrian Wooldridge as expressed in the pamphlet Education and the Labour Market. He states:
"The performance of a sophisticated economy is increasingly dependent not on its fund of physical capital but on its capacity to mobilise the brain-power of its citizens. Shortages of properly-trained brain-power will prevent economic growth in the next century just as surely as did shortages of raw materials in the last. This is hardly good news for the United Kingdom. Britain has proved singularly bad at training and mobilising the brain-power of the mass of its citizens—not least because the intellectual Mandarins who created our educational system in the mid-nineteenth century and the radical academics who reshaped it in the mid-twentieth shared one belief in common: that the world of commerce is beneath consideration".
I should like to refer to a couple of points raised in the report. First, there is emphasis on the fact that vocational training will work only if it leads to higher productivity. I have the privilege to be a director of a company called Center Pares. We build and run holiday villages in Holland and in this country. Some of the properties are look-alike and they are structured and managed in the same way. I regret to have to tell your Lordships that in the case of certain jobs the productivity of the Dutch workers is 60 per cent. higher than for those doing the equivalent job in this country. My Dutch colleagues look at me across the board table and ask how it can be that British workers are so much less productive. The only explanation that I can give them is lack of training.
Higher productivity is essential because it creates viability within an enterprise, enabling it to pay for training and to have some reward for carrying it out. It is also tremendously important because it enables the employee to get more job satisfaction and more money out of the job.
If I may go off at a tangent, I should like to refer to the training programme which is carried out at Disneyland in America. I believe that it is an extremely well run company. All employees, whatever their jobs will be, whether sweeping the streets or cleaning the toilets, are given at least a week's inductory training. The theme of the training is "Your job is making people happy". Therefore, one hopes that the members of that workforce get job satisfaction.
As a result of training there is also a need for better management, and that in itself requires training. We always come back to the question of training.
One point which concerned me and which is a demotivating factor to many employers in relation to training is the fear that employees having been trained will be poached by competitive enterprises. There is the possibility of intercontinental poaching, which is a terrifying prospect. I raised that matter with every witness that I could. I was surprised that the witnesses to a man or a woman said that this was not a problem. In the better businesses the training ethos and the fact that they actually offer training create an environment in which employees tend to stay; they perceive a training culture within the enterprise that gives them the opportunity to better their position and gain
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increasing job satisfaction. Therefore, it would appear that poaching is not a problem if career development is linked with training in a well managed business.
The final point that I should like to raise relates to the type of training. There is the specific type of training; for example, teaching somebody to make widgets, how to lay a table or whatever the job may be. Those skills must be taught within the industry and they are job specific.
However, we are now told by the experts that during their lifetime young people growing up today are likely to have two, three, four or even five different job activities because of technological change. Therefore, it is extremely important to give them the necessary portable skills, particularly in the early part of their lives, which apply to every kind of activity and industry in which they are likely to find themselves.
The most important of those is interpersonal skills and being able to relate and communicate with other people, whether one wishes to sell something, buy something, get along with people, work with them and so on. The most important person to understand is oneself. I should like to ask the noble Viscount whether he can give me an assurance when he replies that interpersonal skills are part of the national curriculum and of the syllabus of all national vocational qualifications.
6.50 p.m.
Viscount Caldecote: My Lords, I add my congratulations to my noble friend Lady Flather on her excellent and well-balanced maiden speech.
I very much welcome this report on vocational training relating to the European Community proposals, with its constructive recommendations which are almost all relevant to the United Kingdom. European Community interest on this subject adds extra urgency to the need to set our own house in order. I shall quote no figures because other noble Lords have done so and the case is very well documented. However, as regards training and further training, we are behind most of our main competitors. I have had first-hand experience of that in Japan and Germany.
It is quite true that the Government have been active in implementing new programmes of training over the past few years. This year government expenditure was £2.5 billion, which should be seen in the context of some £18 billion spent by industry. However, we cannot be complacent. We have a very long way to go to meet industry's needs in the highly competitive markets of today. Already the shortage of skilled people is a bottleneck in improving innovation in design, manufacturing and marketing, and so we are prevented from keeping ahead of competition over a broad front.
I believe that a necessary condition for success, as suggested in paragraph 89 of the report, is to regard the cost of training as an investment and not a cost. That expenditure should be disclosed in company accounts, just as it is now necessary to disclose expenditure on research and development under the new standard accounting practice No. 13.

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As I have said already, the Government have put forward many constructive initiatives on training. I believe that NCVQ is one of the most valuable. However, there have been too many changes. There have been the community programme, YTS, ET, TECs and many others over the past few years. That makes great difficulties for those involved in providing training. There have also been changes in funding which create further problems. I am a trustee of a training organisation based mostly in the North. There are six or seven centres around the country with an excellent record. One centre has been given an award for a high standard of training. However, we now find it very difficult to operate with the reduced funding levels. Almost inevitably that will result in the curtailment of the scale of our training programme. That seems to be extraordinary when there is an enormous unsatisfied demand for training places.
Another problem is that programmes, although excellent, are somewhat fragmented. I very much welcome the recommendation endorsed in paragraph 92 of the report that,
"in the United Kingdom there is an urgent need to bring together the education, training and employment of young people in a coherent framework which can be understood by employers, parents, educators and trainers and, above all, by the young people themselves."
There is much common sense and importance in that.
I welcome very much the emphasis at paragraph 91 on the need for consensus between employers and trade unions as regards training. It would be better still if there could be consensus among political parties. Is that too idealistic an aim? Is it too naive to suggest that? I hope and believe that it is not. If we in the United Kingdom are divided, how will it be possible to compete with our European competitors who will be united in a common purpose on the importance of training?
I should like to see a more Cross-Bench approach to training and continuation training. That would be a very constructive approach to these important matters where the objective is in no way a party matter. We may disagree somewhat on the method of funding and the priorities, but the ultimate objective of increasing the skill of the workforce in industry is not a party issue. It would also help towards continuity of policy. It is very encouraging to see evidence of that consensus in our debate in your Lordships' House today.
Paragraph 94 suggests that more emphasis should be given to forecasting future skill shortages and training requirements. I am rather doubtful whether that is wise if taken too far. It has been tried before. Surely it is better to provide a very wide range of good training programmes and opportunities because that would be more effective in achieving a broad level of competence and flexibility in the workforce, as is recommended in paragraph 99.
Finally, I strongly support the vital need for continuation of training throughout the working life. There should be a scheme to fund personal expenditure on continuation training. At present a company can fund such training and obtain tax relief
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upon it but an individual must pay for his own education in order to keep up to date during his working life. It would also be a help to have in any list of qualified people an indication of those who have maintained their knowledge through continuation training. For example, in the register of qualified engineers maintained by the Engineering Council it would be quite easy to indicate on the list those who had undertaken some re-training at intervals of not less than, say, three years.
This excellent report shows how matters are moving in Europe. In spite of many constructive initiatives by Her Majesty's Government, in many ways we are still well behind our competitors in training an adequate number of skilled people. Therefore, there is a need for continuing pressure to build on the present schemes and to ensure their effectiveness. Both industry and government have a part to play. I hope that the report will act as a valuable stimulant to both, thus ensuring that adequate investment is made in this priceless asset—a well-motivated and skilled workforce.
6.58 p.m.
Baroness Seear: My Lords, my noble friends Lord Rochester and Lord Bonham-Carter have made it abundantly clear how strongly we on these Benches support the main thrust and recommendations of the report. I shall not bore your Lordships' House by repeating what they have said or, indeed, by repeating the points which I seem to have made ad nauseam since I came into your Lordships' House nearly 20 years ago on the urgent need—urgent then and urgent still—to improve the level of training.
I was chairman of the earlier committee on vocational training for young persons in the EC and of your Lordships' committee on unemployment, both of which dealt with the need for training. I must confess that any sponsorship by me seems to lead nowhere at all. Let us hope that this report will have greater success.
Before proceeding, I should like to say how delighted I was to hear the speech of the noble Baroness, Lady Flather. That was a second speech from a Baroness not born in this country, but plainly bringing to your Lordships' house great richness and addition to the debates that we hold.
Instead of covering the ground which has already been so well explored during the debate and in the report, I shall raise one or two points which may have been raised but which have not been stressed to the extent that they might be. The first point is that in the modern world the kind of training we need for the youngsters leaving school will not be possible unless the people doing the training are able to build on a sound educational base. The inability to train adequately is linked to the failures in our schools.
This is not the debate to go into the ways in which the school position can be improved. However, there is a link between competency in schools and training. That involves funding, support for teachers, and all the other matters we have discussed so often that are essential if we are to be effective on the training front.

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The days when training meant teaching people to do the limited tricks of a limited trade are long past. What is needed are people who are literate, numerate and have communications skills. Above all, they must be able to learn and be confident that they are able to learn. It is confidence in learning that is lacking in many people, largely because they have not been successful in any other previous educational experience. They believe that they are not capable of learning the things with which they are confronted.
We therefore start with education. I wish to make one particular point; it is a specialised point but not an unimportant one. The report stems from a European Community recommendation. We are talking of industry and training within the context of the European Community and the world of 1992 and beyond. We in this country are also discussing changes in A-levels. That is an important part of the training of people who are coming up for the more responsible and senior jobs in the country. But it is extraordinary that we never speak of the importance of the international baccalaureate. If we are considering revising A-levels, and as we are now seeing ourselves as part of the European Community, we should be making the international baccalaureate available to far more people than at present.
The other day I asked a question of someone working in this field and was told—although it may not be true, and I sincerely hope it is not—that there are only 20 schools in this country providing the international baccalaureate. Yet that is a very important starting point for the increasing number of people who will wish to do some of their training and qualification in universities outside of this country. That is the kind of opportunity and scope which reverts to medieval days—we will leave that on one side for the moment; I agree training would be rather different—but which people would be able to have if they started with the international baccalaureate.
When the Education Reform Bill was being debated, I asked whether the requirements of the GCSE were such that it would enable or hinder people if they wished to do the international baccalaureate. I never received a clear answer then and would be glad to know now whether the Government have any interests in that, in view of the growing importance of European qualifications. If not, are they prepared to look at it and see whether anything can be done on that front?
We move, as many people mentioned, from basic education to the question of the 16 to 18 year-olds. We on these Benches have long advocated that those years should be years of learning rather than years of producing. Therefore we welcome the threefold option that is put forward in the report either to stay on full-time in school, to have full-time training outside school or a job in which the emphasis is on training and not on producing, and which training leads to a recognised qualification.
That scheme is excellent. But there is one possible snag; that arises if the immediate economic advantages of those three options are very different. If
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one were to be very much worse off by staying at school rather than taking a job with training and the possibility that one will obtain some NVC qualification, I fear a considerable number of people will not stay on at school. On the other hand—to use the boringly overworked phrase—if a level playing field existed between the three options, those people may choose to stay on at school. I am reminded of a student of mine from a working class family who said to me, "There is an awful row going on in our family. My parents want my younger brother to go to university the same as I did. He wants to leave school now as his eldest brother did because his eldest brother now has a Jaguar". As long as there are economic advantages in leaving school and going into a job which provides more immediate financial return, we shall not have choices based on the real value of the three options; they will be based on the immediate rewards to the people concerned.
That means looking at youth payment levels. That subject was touched on in the report but perhaps not explored so far as it might be. I always thought it was a great pity that we brought the adult age for males down from 21 to 18. That was largely a by-product —totally unanticipated—of the Equal Pay Act. I shall say no more about that for the moment. It means that within two years of leaving school, youngsters are entitled to the full adult rate of pay.
One reason why German apprenticeships have been so much more sought after and effective is that the level of pay for apprentices has not been in competition with what they receive if they stay on at school, and is nothing like as much as if they were in full-time work. That is a nettle which will be unpopular in some quarters; but it will certainly have to be grasped if we really mean that there is to be a free choice between those three options.
Youngsters of from 16 to 18 are enormously important. But they are by no means the whole of the population requiring training or re-training. Due to the inadequacy of our training in the past we have a huge backlog of untrained people in our labour force. We need to invest money and resources inside industry where many of those people now are and where training can be given. People could be promoted to jobs where there are vacancies but where training has not previously been provided. Some training could be done in that way; but a great deal must be done by the Government making provision for training of mature and adult people. Needless to say that must include the mature women available to come back into the labour market.
Other speakers mentioned that topic and the particular requirements of that group. I should like to emphasise that a great many girls, when they left school in the past, took training which was a great deal below what they were capable of doing. They did not realise how inadequate that training was in relation to their potential. As they grow older they do realise, and they need encouragement and help to break through from what they did in the past. That does not mean doing a quick training course in shorthand and typing, which they did when they were 16. They recognise that

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they are capable of doing something far more ambitious provided always that the resources are there to enable them to do it.
The resources include resources for fees for part-time and full-time mature students. They also need some assistance with maintenance. Not all husbands of women who wish to return to work are wildly enthusiastic about it. Their enthusiasm would be enhanced, if not encouraged, from the start if the wives who were going through the training were not a financial drain on their families and were fully able to finance themselves. If we mean business by making the best use of the labour market, we must not be cheese-paring in the provisions and opportunities that we offer to the mature woman wishing to return to training.
Those are not the only groups that we should be considering. There are a number of special needs groups in which investment in the longer run can be very well worthwhile. One of the great problems is that it is so difficult to get this Government to look at the longer term rather than the short-term and the short-term pay-off.
The ethnic minorities have already been mentioned. There is no question whatever that, distributed as they are in industry and commerce, members of ethnic minorities are achieving at different levels of employment way below what they are capable of doing. They need special training and encouragement. After all, the equal opportunities legislation permits of special training provision for people who have been unable to take advantage of training or of the opportunities offered to them in the past.
Because of my particular connection with the training of ex-offenders, I wish to point out that additional financial expenditure can make an enormous difference to people who might otherwise go into a permanent life of crime. They can be diverted into being very useful and productive citizens if they turned their undoubted skills and wits to more socially acceptable activities. They will not do that unless there is adequate finance for training. Very often it takes a much longer time to train people with that kind of disability than it does to train the ordinary school-leaver or young person.
So much for the different categories of people for whom special provision is required. I make no bones about it; it means more government investment. I wish to underline the recommendation made by the noble Viscount, Lord Caldecote, to see the provision as investment and not current expenditure. That is what it undoubtedly is. We have to face how all this expenditure is to be financed. I was attracted by the account of what is being done in France. I recognise that the levy grant scheme got out of hand and became too bureaucratic. It was a very considerable and unnecessary burden in a number of cases.
However, I do not like the idea that we want to encourage every employer to train. A great many of them are incapable of doing so. Modern training is a highly sophisticated business. It is not just a matter of showing a youngster how things can be done. People
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who carry out training need to know how to do it. A very great many—not only the smaller employers—are not equipped or capable of training. We do not want to encourage just anybody to train.
The old idea of the levy and grant was surely right. Either you train or you pay instead of training. The companies which are training should pay for their own needs. There is no reason why they should pay to meet other employers' needs. However, the companies which train should get some benefit from training in excess of what is required. The French scheme warrants being looked at very closely. A percentage of the pay roll should be devoted to training. If that money is not spent then it should be collected by the Government as a tax which can then be paid to the people who are doing the training. That is a sensible way, but it is only one particular way, although it is very well worth considering in order to meet the costs of training.
I now turn to the question of the TECs and what training should be given. There was reference in the report to a national plan. I am all for a national strategy for training, but I give a word of warning about national plans for meeting labour shortages. There is no such thing as a national labour market except for a very few highly qualified occupations where people move around the country. There is a vast number of local labour markets. When I was chairman of the area board in Buckinghamshire, even within that area there were three quite distinct labour markets; namely, Milton Keynes, High Wycombe and Aylesbury. It was quite useless providing training in Milton Keynes for people intending to work in High Wycombe. The workers would not have gone anyway. There were quite different labour markets.
I do not believe that money spent in studying a national labour market is useful because there is no such thing. What is enormously important is detailed studies of the local labour market. They should be carried out by the TECs but that requires money. For the task to be done properly it has to be done not only once, but it has to be constantly repeated and updated. The TECs should be able to employ people who know about studying the local labour market, studying training needs and constantly revise their plans.
When I was studying what the national labour market board was doing in Sweden some years ago, I was told that the representatives of the labour market went back to the companies every three months in order to discover how their needs had changed. The training was adapted accordingly. That is a continuous and expensive process. It means that training is done for what is required and not for what is not required. I urge the Government to look into this question, and to finance the TECs properly so that they can do this all-important job.
7.16 p.m.
Baroness Blackstone: My Lords, I begin by congratulating the noble Baroness, Lady Flather, on her maiden speech. I completely share her concern about the very important need to train the ethnic minorities in this country. It is a subject which is dear

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to my heart through my membership of the Fullemploy board, an organisation which has been dedicated for many years to the training needs of the black and Asian community. I welcome the publication of the Select Committee's report on Vocational Training and Re-training. I welcome it because its recommendations are eminently sensible. I hope that we shall hear shortly from the noble Viscount that he too welcomes it and that the Government will accept the committee's recommendations.
I welcome it also because many of its recommendations are completely in line with Labour Party policy. Finally, I welcome it because it is timely. It comes soon after the Government have inexplicably slashed the training budget in the Autumn Statement. Given the widespread concern about Britain's skills crisis, it is extraordinary that next year £300 million, which is about 10 per cent. of the budget, will be cut. Over the next year and the following one training will be cut by about £500 million altogether. These cuts do not come after a period of substantial increases in government spending on training. Over the five years from 1987 to 1992, it is estimated that we shall have seen cuts in real terms of about £1.6 billion, which is a third of the budget.
It is incredible that the Government should have been so shortsighted. It is also amazing that the targets set by the previous Secretary of State for Employment, Norman Fowler, shortly before he resigned—he is referred to in paragraph 50 of the report—should have been so rapidly abandoned by his successor. No adequate explanation has been given for this U-turn by the Government. Perhaps we shall be given one this afternoon.
Many TEC chairmen and members are dismayed, as noble Lords have said this afternoon, with the inadequate resources which will make it very difficult for them to deliver the training that we so desperately need. A number of speakers have made reference to the much better records of our European partners on vocational training, although the noble Lord, Lord Bonham-Carter, said that the starkness of the gap between the United Kingdom and other countries had not been brought out. I believe that my noble friend Lady Turner made up for that. Perhaps I may add to what she said.
For example, the report points out that by 1987 in the Federal Republic of Germany 93 per cent. of the school-leavers started an apprenticeship, further schooling or university education and approximately 88 per cent. of those obtained a qualification. The report tells us that in France in the same year, 1987, taking the workforce as a whole, one in four people had undergone some form of vocational training. The situation in Britain contrasts starkly with most of Europe. What is frightening is that whatever the Government may say about improvements, we are continuing to fall further behind day by day. Countries such as France and Germany are making improvements all the time and are doing so at a faster rate than we are.
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I shall give a few of the statistics which caused concern to the Select Committee and which are also causing a great deal of concern among responsible employers and those who represent them in the CBI and elsewhere and in the trade union movement. First, 70 per cent. of the British population left school at the minimum school-leaving age. Secondly, 70 per cent. of the British workforce had only a very short training in their first job. Thirdly, 70 per cent. of the British workforce have had virtually no training since. Fourthly, in 1989 a third of the British workforce had had no training whatsoever at any point in their working life. Fifthly, one in five employers still provides no training for its staff. Sixthly, according to the Industrial Society, 58 per cent. of personnel managers had not heard of the NVQ system, let alone taken part in it, four years after the National Council for Vocational Qualifications was set up. Seventhly, according to the Department of Employment's own study, half its sample of employees—it was a large sample—identified their own training needs which were not being met. Eighthly, 40 per cent. of them expected to get no further training for the rest of their lives, so their expectations about what would be offered were extremely low. Ninthly, every year at least 100,000 school-leavers start work without any training. Tenthly, the lack of vocational training for adults is in no way compensated for by a high proportion of the workforce with a high level of educational qualifications. Only about 25 per cent. of school-leavers obtain the necessary qualifications to go into higher education.
My noble friend Lady David referred to the BTEC and argued that this is a way of keeping more pupils in the system by allowing them to gain the qualifications necessary to enter post-school education. I very much agree with her. The noble Baroness, Lady Seear, referred to the international baccalaureate. I suggest that the Government should look at something even more radical than either BTEC or the international baccalaureate. I refer to the document of the Institute for Public Policy Research on the setting up of a British baccalaureate which would be quite different from the international baccalaureate and would allow young people from many different levels of ability to study for the same qualification. It would remove the divisive and muddled nature of qualifications for the 16 to 19 age group. Perhaps I should have declared an interest as I am the chairman of the Board of Trustees of the IPPR.
I have given just 10 indications of the depth of our problem and the steepness of the hill that we have to climb to get out of this unfortunate situation. Is it any wonder that we have staggering skill shortages in our workforce? For example, there is a desperate shortage of technicians and a serious shortage of mechanical and electrical engineers. Various surveys of employers have been carried out in investigating recruitment problems. A Training Commission study in 1989 showed that nearly half the firms in its sample had experienced recruitment difficulties during the year and 40 per cent. of them had reported severe problems.

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We now have a huge skills gap, yet the Government calmly slice huge sums off the training budget. What a funny old world, to use the words of the previous Prime Minister. Many of the major skill shortages are in key areas of manufacturing where Britain's balance of payments problem is greatest. The noble Viscount, Lord Caldecote, referred to a lack of skills leading to bottlenecks in relation to better design and other innovations. I agree with him. How in heaven's name will we improve our lamentable economic performance while this continues? Perhaps the Minister can advise us.
The noble Lords, Lord Bonham-Carter and Lord Rochester, suggested that our economic decline will continue unless we have more training. The noble Baronesses, Lady Lockwood and Lady Flather, referred to the value of training in increasing productivity and in industrial competitiveness. That is common sense, yet it seems to have escaped the Government.
I should like to pick out some of the report's recommendations for a comprehensive strategic framework for training. The committee rightly identified the lack of such a framework and the need for one supported by both sides of industry. Achieving such support should not be too difficult, and both the CBI and the TUC are in favour of developing such a framework. Indeed, as my noble friend Lady David pointed out, there is a remarkable consensus between them on what needs to be done. The noble Viscount, Lord Caldecote, wanted a consensus among the parties. I would very much welcome a consensus among the political parties but I fear that it is the Conservative Party and the Government who seem to be out of line with everyone else.
The Government are out of line in Europe too, abstaining on the Commission's FORCE programme when it was adapted earlier this year. In this context the committee was quite right to criticise the Government's failure to recognise that effectively managed vocational training is an investment and not a cost The Government seem obsessed with what they see as the problem of employment costs. As other noble Lords have asked, why do not the Government realise that there is a large return on spending on training?
It would be helpful if the Minister could comment in detail on each of the 10 points put forward by the committee. I should like to focus in particular on three or four of them. First, will the Government restate the national targets which they set earlier, as the noble Baroness, Lady Flather, and the noble Lord, Lord Gisborough, have asked? Surely the committee is right in advocating such targets. There would then be a clear set of goals for which we could all work, and we could monitor progress as we went along. As the committee pointed out, other countries have benefited from a benchmark against which to measure success.
The noble Lord, Lord Brain, mentioned the importance of NCVQ. Will the Government encourage the NCVQ to do more to promote broad-based competence? They might possible link additional government funding, which the council
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needs, to progress being made in the promotion of broad-based competence, including the interpersonal skills, to which the noble Lord, Lord Northbourne, rightly drew attention.
Thirdly, will the Government consider setting up some kind of inquiry, either within the government machine or involving outside experts, into paid educational leave? The committee suggests that,
"after over a century of criticism of the United Kingdom's voluntarily based system of vocational training",
legislation on this subject may have to be considered over the next few years. Such legislation will almost certainly be needed sooner rather than later because of the poor record of so many employers in releasing people for training. The committee has pointed out the need for further consideration of how to define a statutory right to such leave. Will the Government get to work on this as a matter of urgency?
Finally, can the Minister say how the Government intend to handle the question of providing incentives over and above training credits? On these Benches we welcome the initiative that has been taken in setting up training credits. Tax allowances, which are clearly extremely desirable, have already been referred to in the debate, but the committee also made reference to discretionary maintenance allowances, to which no previous speaker has referred. It was thought that they might be especially helpful to the disadvantaged. On the subject of the disadvantaged, I understand that the TECs can now encourage Re-start interviewers to regard job clubs and Re-start courses as the first option for the long-term unemployed rather than training.
Knowing how the system works, and the huge government incentives to TECs to limit employment training to people who could quickly be placed with an employer with an employment contract to save on training allowances, there must be a fear that training will become increasingly less available to the long-term unemployed, many of whom desperately need it. If that were to happen, they would become one of the most disadvantaged groups in our community, along with some of the other groups which have already been identified by the committee and other noble Lords, such as the least qualified workers, the disabled and women returners, for whom improved access to training is vitally important. The noble Baroness, Lady Seear, referred to special needs groups. But among such groups are the long-term unemployed. I rather regret the fact that the committee did not refer to them.
The committee raised many issues about the current position with respect to vocational training in the United Kingdom. It is justifiably critical of our record in comparison with the rest of Europe. It concludes that legislation should be introduced to ensure that all—I emphasise "all"—l6 to 18 year-olds are provided with either education or training. Many speakers referred to that aspect this evening. The committee rightly proposes that employers should not just provide training for this group but should also be required by law to encourage training which leads to a recognised qualification. That would be a huge step

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forward and would do a great deal to start the process of catching up with France, Germany and other European countries. It would at least eliminate one of the statistics which I gave earlier: the fact that 100,000 or more young people enter work with no training.
However, as the noble Lord, Lord Brain, and others pointed out, there is a great deal to be done to ensure that adults in this country are both trained and re-trained. A voluntary system is not enough; we also need legislation. I hope that the noble Viscount will be able to respond positively. Not one speaker today has argued against the need for statutory underpinning. It is only when we have this that we shall be able to get the clearly articulated framework identified by the committee which is needed to achieve the FORCE objectives. I hope that that will now be provided by the Government. Better late than never.
7.32 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, I should like to begin by paying tribute to my noble friend Lady Flather for her very admirable maiden speech. Although I detected a note of criticism in her well thought-out remarks, I took them to be entirely helpful. I look forward to many more timely and helpful contributions from her in future debates in your Lordships' House and in the work of its Select Committee.
Throughout history training has often made the difference between success and failure, victory and defeat. Three hundred and fifty years ago, during the Civil War, Oliver Cromwell created and trained his New Model Army. The king did not train his troops. As we all know, Cromwell won; and we all know what happened to the king. Those who do not learn from history are doomed to repeat it. Although today a lack of investment in training is unlikely to cost anyone his head, it may well cost us our competitiveness, our jobs and our economic well-being. That is why I am most grateful to the Select Committee—and especially to its chairman the noble Baroness, Lady Lockwood—whose hard work, experience and expertise have contributed to the extensive and enlightening report before the House today.
However, let us consider the challenges with which we are faced; first of all, a highly competitive world market. Not only do we face the prospect—now only months away—of a Europe with no trade barriers; we also face competition from farther afield: from Japan and North America and the countries of the Pacific rim. Secondly, we are in the midst of a technological revolution on the scale of the industrial revolution which took place 180 years ago. Thirdly, we have fewer young people joining the labour market than at any time since the last war.
A principal answer to each of these challenges is training—training to create and maintain a highly skilled, flexible and well-motivated workforce which is the match of any of our competitors; training to ensure that we exploit to the full the opportunities created for us by new technology; training for all our
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people at every level—now and throughout their working lives—to equip them to cope effectively with the changing demands of the world of work. In training our people, we must ensure that opportunities exist for all; for women, who will account for such a high proportion of those entering the workforce, especially the so-called women returners, who, having raised their children, wish to return to work; for disadvantaged people and the disabled; and for those from ethnic minorities.
The Government are committed to that aim extending—I hope that the noble Baroness, Lady Seear, will be reassured to hear this—even to former offenders. We therefore welcome in particular the committee's interest in training and the rigour of its examination of the issues. The Government fully agree that ensuring an adequate supply of the skills we need is one of the major challenges which we as a nation face in the decade ahead.
The Government share and have expressed broad support for the aims of the FORCE programme, which formed a major starting-point for the Select Committee's report. We support the approach taken in the FORCE decision to support and complement policies and to continue training activities developed in member states. That takes account of the principle of subsidiarity and recognises that individual countries have training systems of their own which work well.
The Select Committee's central recommendation was that the Government should set the strategic framework within which training activities take place. The noble Baroness, Lady Lockwood, enumerated the 10 points proposed by the committee for that framework. Rather than comment on those points in detail, as the noble Baroness, Lady Blackstone, has asked me to do, I should like to concentrate upon the future as the Government's comments are now a matter of record.
The Government have done precisely that which has been requested: they have provided a strategic framework. This was set out in my right honourable friend the Secretary of State's strategy document entitled 1990s: The Skills Decade which was published in October. Noble Lords will find there a strategy which chimes with the committee's recommendation for the component of a strategic framework; indeed, it goes much further. The noble Lord, Lord Bonham-Carter, should study the document carefully. I believe that he will find in it the strategy for which he has been looking.
The strategy has a clear aim of developing a workforce for the 1990s with skills which meet and beat the standards of the best in the world. It assigns clear responsibilities to the main players on the pitch; that is, government, employers, individuals and the new training and enterprise councils. It sets out six priorities: first, to improve employer investment in skills; secondly, to increase the skills of young people; thirdly, to involve individuals more in their own development; fourthly, to help people at a disadvantage in the job market; fifthly, to raise the quality of provision; and, finally, to encourage enterprise.

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The Government's strategy goes well beyond the Select Committee's recommendations. It has a focus, which, if I may say so, is missing from the report. It is a focus on skills, not just on training; on individuals, not just on institutions; on local commitment, and not just on national planning.
On the matter of national planning, let us beware of national target setting that takes no account of how targets will be delivered on the ground. The committee recommended that the Government should set national targets for training. We believe that it would be a mistake for us to do so; it is employers who have the primary responsibility to train their people. In the main it will be employers' training performance which determines whether such objectives are reached. It follows therefore that targets for training are for employers to set and act upon. The CBI is doing just that. It has recently started consulting to secure agreement on targets and how they will be met.
The noble Baroness, Lady Lockwood, the noble Lord, Lord Rochester, and others asked whether the Government will endorse that initiative. The Government have welcomed the initiative, but to succeed we must all be clear about our individual roles. Government's role is to set a national policy framework and to create the infrastructure within which success can be achieved. We shall set ourselves targets for putting the framework in place; for example, for reforming our system of vocational qualifications. We are setting clear and specific targets for training and enterprise councils, which provide essential local support for what employers have to do.
TECs are in the front line of training. My noble friend Lady Flather rightly drew attention to their role in energising companies, the education system and others. Perhaps I may reassure the noble Lord, Lord Rochester, that TECs will have as much money to spend on training and enterprise next year as they are spending this year.
The key words with TECs are "local" and "employer-led". No longer will government impose nation al training and enterprise programmes upon local communities. What suits Durham will not suit Dorset. The needs of Cumbria are different from those of Kent. The 82 TECs which serve England and Wales take account of local needs. They will have the money and the flexibility to devise programmes which meet the needs of their local labour markets. They will be directed by people who understand those needs and who know what must be done to meet them: people from the local community, led by local employers who know about training and understand enterprise. The noble Lord, Lord Northbourne, will be reassured that employers understand enterprise and are in no doubt of the value of education and training.
The noble Lord, Lord Hunter of Newington, was sceptical of the value of TECs and the commitment of those currently involved in their direction. The TECs have harnessed a huge tide of enthusiasm which those who believe that employers will train only if compelled to do so would not have believed. Even we have been surprised by the extent of their commitment. Two years ago, when my right honourable friend Margaret
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Thatcher launched the TEC movement, we thought it would take four years to complete the national network. We were wrong. The network is complete now, two years ahead of schedule.
My noble friend Lady Flather asked that we set demanding targets and performance measures for TECs. She is right to do so. From the outset, we are managing TECs through their business plans in which we expect firm targets. The financing of TECs will depend increasingly upon their meeting stretching targets.
The TECs are the living proof that the Government's voluntary approach works better than any system based upon compulsion. And they have some strong foundations, laid by government, upon which to build. For example, our massive youth training programme is unmatched throughout Europe. We are pushing back the frontiers again by piloting the unique approach of training credits, which put purchasing power and the incentive to train in the hands of young people.
Let there be no doubt that youth training has been a resounding success. In the past seven years it has trained more than 2·5 million youngsters; 90 per cent. of those who complete their training go into jobs, further education or training, and 67 per cent. of them leave with a qualification. I am sure that even the noble Baroness, Lady Seear, will be pleased by that success. It is a far cry from the days of 1979 when such a high proportion of our 16 year-olds left school with no qualifications and went into jobs without training.
That is not the only improvement. Since 1979 there has also been a 36 per cent. increase in the number of students in higher education, a 29 per cent. increase in the number in further education; and 22 per cent. more 16 year-olds are in full-time further education than was the case in 1979—an improvement indeed.
The Government's voluntary approach and our training and education reforms are enjoying real success, which is why the committee's recommendation that employers should be obliged to arrange a programme of training for 16 to 18 year-olds is inappropriate. That is the answer to the first point made by the noble Baroness, Lady Lockwood, in her letter to my right honourable friend the Secretary of State.
The reform of our entire system of vocational qualifications is one often overlooked but vital and radical component of our policy. The noble Lord, Lord Brain, drew attention to that important area in the work of the national council. Since 1986 work has been going on in virtually every sector of industry, commerce and public administration to create simple statements of occupational competence. Those standards, produced by representatives of each industry or occupational group, will then form the basis of national vocational qualifications—qualifications which will measure competence at work, not the ability to pass exams; which clearly state what any individual can do and point the way to the next qualification up the ladder; which encourage individuals to climb that ladder of opportunity by

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increasing their skills; and which test practical competence and take no account of how that competence was learned, whether through school, college or training course, off-the-job or on-the-job training or perhaps by open learning, in which this country leads the world. It is a system of qualifications which is more flexible than any system owned by our competitors. It is as flexible as the labour market which it seeks to serve.
I should like now to respond to as many as I can of the points raised in a wide-ranking debate. The noble Baroness, Lady Lockwood, pressed the recommendation contained in the report of a personal income tax allowance for people who train at their own expense. Your Lordships will know that tax is a matter for the Chancellor. He is aware of the recommendation contained in the report. I shall of course bring to the attention of my right honourable friend the comments made during the course of the debate. The Government share the noble Baroness's interest in encouraging people to take more responsibility for their own training and development. Indeed, we are developing other forms of encouragement through career development loans and training credits as a way of giving individuals purchasing power for training and open learning systems in which, as I said, we lead the world. I am sure that that will please my noble friend Lord Caldecote who asked for such projects.
The noble Baroness, Lady Lockwood, asked about the provision of child care facilities. Apart from those provided by employers, I can confirm that further child care facilities are available to lone parents on employment training. From next April, TECs will be free to extend that support even further.
My noble friend Lady Flather and the noble Baronesses, Lady Seear and Lady Blackstone, rightly drew attention to the need for equal opportunities for minority groups. TECs are expected to address and meet the needs of minority ethnic communities in their areas. People from such communities are taking advantage of our training programmes in a disproportionate way. I include the comments of the noble Baroness, Lady Turner of Camden. Women too are well represented in our training programmes. The Government are fully committed to providing such opportunities. It is just not the case that TECs have incentives not to help disadvantaged groups, as the noble Baroness, Lady Blackstone, said. On the contrary, they have clear targets to help special needs groups and performance bonuses for exceeding them.
The noble Lord, Lord Rochester, asked what part the Government were playing in youth training as well as employment training. On 7th December this year there were 172 young people occupying a training placement in my department's youth training programme alone. Between January 1988 and June 1990 120 trainees obtained NVQ level two; and five trainees obtained NVQ level three, mainly in business administration. There are numerous YT success stories, of which I give one example. A young woman on a Department of Employment YTS programme in Sheffield obtained an NVQ level two, followed by a
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BTEC national in computer studies. She has since left the scheme to join the RAF as an air traffic controller. So the Government are playing their part and our department is playing its part in the programme.
It is a mistake to complain about cuts in government spending on training as did the noble Lords, Lord Rochester and Lord Bonham-Carter, and the noble Baroness, Lady David. The Government are making a massive investment. Our spending on training has risen by 60 per cent. in real terms over the past five years. I must take issue with the noble Baroness, Lady Blackstone, on her figures. Unemployment has fallen by 60 per cent. In these circumstances, it is right to see a small adjustment now.
The noble Lord, Lord Rochester, quoted a drop in expenditure on training in some parts of the north. The evidence is that training by employers has increased by 70 per cent. over the past five years. The CBI survey showed training by employers holding up despite the current downturn.
Lord Gisborough: My Lords, my noble friend says that the numbers have increased. Can he say whether the numbers given in paragraph 46 are incorrect? It is misleading.
Viscount Ullswater: My Lords, I was talking about figures over five years. I said earlier in my speech that the money for TECs would be the same in spending power as this year. Contrary to previous experience, employers are spending about 8 per cent. of payroll on training. That figure looks strong against the figure of 1.5 per cent. quoted by the noble Lord, Lord Brain, for France.
My noble friend Lady Faithfull asked about exchanges between this country and Eastern Europe and the USSR. I am pleased to be able to report that the United Kingdom has been able to contribute effectively to the first year of the European Community TEMPUS programme which permits student exchanges between European Community countries and countries of Eastern and Central Europe.
I am also pleased to report that there exist already a number of ways in which young people in the United Kingdom and Russia participate in exchanges. The British Council's youth exchange centre has organised exchanges of young people aged 15 to 25 in schools, training, employment and higher education. This year 650 young Soviets and 597 young Britons were involved in extracurricular exchanges in areas such as drama, the environment and music. The central bureau arranges language and cultural exchanges of 14 to 18 year-old schoolchildren; 62 schools are involved. The central bureau is currently examining the possibility of setting up exchanges between Soviet and British colleges of further education. Noble Lords will see that not only do we take part in the European Community programmes; we have also made bilateral arrangements with Russia which I am sure my noble friend will agree is good.
The noble Lord, Lord Hunter, drew attention to the importance of scientific education and the

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strengthening of the basic competence of schoolchildren in technical subjects and motivating them to continue learning. That is one of the objects of our reforms of the national curriculum and of the technical and vocational education initiative.
The noble Baroness, Lady David, asked me about BTECs. I agree with her that BTECs can be an attractive alternative to A-levels. Indeed, 8 per cent. of university entrants already come via the BTEC route. BTEC is a matter for the Secretary of State for Education and Science. There has been a proposal to him from BTEC which could make these qualifications more widely available. However, I cannot anticipate the outcome.
The noble Baroness also asked for a response on the committee's recommendation that more be done to improve access to training by offering more open learning opportunities. The Government are spending £6.7 million on supporting developments in open and flexible learning. They have committed £18 million over five years to the Open College. As I said earlier, in this field we lead the world.
The noble Baroness, Lady Turner, raised trade union involvement in decisions on training. The Government believe that employers as both providers and consumers of training have the primary responsibility for ensuring that the workforce has the skills it needs. We also recognise that workers and their representatives have a key role to play. Without their individual and collective commitment to training, we cannot hope to succeed in competitive international markets of the 1990s. That is reflected in practical involvement in individual trade unions, in training developments at all levels: at national levels with the national training task force and the National Economic Development Council; at sectoral level with industry training organisations; and at local levels in training and enterprise councils.
The noble Lord, Lord Northbourne, asked whether interpersonal skills would be taught as part of the national curriculum and national vocational qualifications. The Secretaries of State for Education and Employment have asked the schools examinations and assessment councils and the National Council for Vocational Qualifications to consider core skills in the qualifications. Interpersonal skills are generally regarded as one of the core skills.
My noble friend Lord Caldecote drew attention to the changes in government programmes recently and asked for a period of stability. It is that, I believe, which will now be established with the TECs. We need continuity in policy and I am sure that we now have it in our broad range of educational and training programmes.
The noble Baroness, Lady Seear, asked me to look into the availability of access to the international baccalaureate. The best thing I can do is to undertake to investigate this; it is a rather detailed point. I shall write to the noble Baroness and a copy of the letter will be placed in the Library. It is an interesting and important issue.
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I have tried to touch on many of the questions put to me. The Government fully agree that ensuring an adequate skills supply will be one of the country's major challenges in the 1990s. We agree that our continued economic success depends upon our capacity to develop the skills and enterprise of our people to the full. We share the view that the Government have an important role in setting a framework.
In our strategic document, the Secretary of State has set out the framework and identified key objectives for the decade ahead. Those are objectives for the Government, for employers, for providers of education and training—including the TECs—and for individuals. While the Government can establish a framework within which success is encouraged, the Government alone cannot produce the success. Success of that kind depends upon a partnership involving many people.
The framework which the Government have created provides the vehicle. The objectives set out in the strategic guidance provide the signposts. It is now up to the various partners to make the journey together. We all want to reach the same destination —sustained economic success based on a highly skilled, flexible and well motivated workforce. I believe that we are well on our way.
Baroness Seear: My Lords, before the noble Viscount sits down, I hope he will clarify one point. I believe he said that employers were spending 8 per cent. of their labour force bills on training. However, paragraph 19 of the report states that they are spending some 2 per cent. That seems to me a much more likely figure. We must try to get the figures right. We have had arguments about the figures in paragraph 16. The difference between 8 per cent. and 2 per cent. is enormous. Will the Minister say which figure is correct?
Viscount Ullswater: My Lords, I shall certainly investigate what the noble Baroness has said to discover what the figures mean.
Baroness Lockwood: My Lords, I wish to thank the speakers who contributed to this important debate. It has been an informed debate and has added much to the value of the Select Committee's report. It has certainly underlined the urgency which the committee attaches to the subject. I shall read carefully the Minister's response to make sure that that too matches the urgency of the subject. I am not terribly convinced that that is so, but I thank the Minister for his courtesy in responding to the various points that were made. All Members of the House will look carefully at Hansard when it is published tomorrow. The debate is now the property of the House and it is up to all of us to ensure that this important subject of training is taken seriously by all Members.
On Question, Motion agreed to.

Crime of Vagrancy (Abolition) Bill [H.L.]
8.2 p.m.
Lord Stallard: My Lords, I beg to move that this Bill be now read a second time.
This is not a Bill which seeks to deal with the appalling problem of increasing homelessness. However, it seeks to repeal the Vagrancy Act 1824, except for the provisions of that Act which relate to insulting behaviour towards females. The Bill further seeks to repeal the Vagrancy Act 1935. Therefore it intends to decriminalise the state of homelessness.
The history of legislation on begging and vagrancy is a long one. Numerous Acts have been passed and have been constantly amended, but the emphasis has always been laid on the prosecution of people whose way of life is begging and vagrancy. The preamble to the 1824 Act states the mischief that the statute aims to correct. It states:
"It is expedient to make further provision for the suppression of vagrancy and for the punishment of idle and disorderly persons, rogues, vagabonds and incorrigible rogues".
The measure emphasised the wish to penalise people for begging or for vagrancy. The Law Society, the End of the Vagrancy Act Committee, the Children's Society, Crisis, CHAR, the London Homelessness Forum, the National Association of Probation Officers, the National Children's Home, Save the Children, SHAC, Shelter, the Single Homelessness Group, the Young Runaways Project, the British Youth Council and others call for the decriminalisation of vagrancy. They do so because they believe, as I do, that the 1824 Act does not work. In its present form it penalises a person for the way he or she lives rather than the effect that that person's behaviour has on others.
The House of Commons Home Affairs Select Committee concluded in 1980–81 that,
"The offence of begging should not be regarded as a means of dealing with the problem of homelessness".
However the committee declined to recommend the repeal of the legislation, stating:
"The police would be powerless to act in response to a complaint or to mitigate a genuine public nuisance".
However, that point was addressed in the Public Order Act 1986. That Act gives the police powers,
"to act in response to a complaint or to mitigate a genuine public nuisance".
That was the exact phrase used by the House of Commons Home Affairs Committee in 1980 as the reason for declining to recommend the repeal of the vagrancy legislation. Clearly the arguments used for the retention of the 1824 Act have been shown to be redundant. The same phrase that was used by the House of Commons committee was used in the 1986 Act to the opposite effect.
It is also my understanding that the Civil Government (Scotland) Act 1982 abolished the only provisions of the 1824 Act that still applied in Scotland. I understand that since 1982 it has not been an offence to beg in Scotland. Many states in the
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United States of America have ruled that vagrancy laws are unconstitutional. The most recent state to do so was New York earlier this year. A number of countries have come to recognise that vagrancy legislation is being used in the wrong way.
In my opinion Sections 3 and 4 of the 1824 Act should now be repealed for all the reasons I have just outlined and because the prosecution of a mode of life is entirely out of context in the 1990s. We have moved on. The mischief that legislation aims to correct should not be a person's way of life but the effect that a person's behaviour has on others. I shall come back to that point time and time again.
In a letter to the End of the Vagrancy Act Committee dated 21st March 1990 the then Home Secretary advanced a number of reasons for the retention of the 1824 Act. He wrote:
"the basic purpose of the vagrancy laws is to preserve public order and decency and to protect individuals from offence or injury".
However, that aim is already adequately served under Sections 4 and 5 of the Public Order Act 1986. I shall not read those sections out as they are rather long, but noble Lords can take it from me that they adequately cover the aim I have referred to.
The Home Secretary further stated in his letter:
"No one can be prosecuted for sleeping rough unless they refuse a place of shelter to which they have been directed and which is reasonably accessible".
However, in a letter to the National Association of Probation Officers dated 6th March the then Home Secretary contended that the words,
"'reasonably accessible' meant free and regularly available to vagrants".
The sad facts are that many hostels have been closed in recent years. I have a great deal of personal knowledge of the closure of Rowton houses. Noble Lords will recall that a number of those houses existed in London. There were houses at Vauxhall, Lambeth, King's Cross, Camden Town and other places. Some of them have been closed while others have been converted to upmarket hotels. Others still have been refurbished and are used as rather more specialist hostels. That has resulted in the loss of literally thousands—Bruce House and all kinds of other establishments existed in the London area—of what we used to call access beds. Those were beds to which people in such a situation could be referred. They were cheap, or even free in some cases, and available to vagrants, people on the streets and people who were desperate for somewhere to sleep. That is a great many immediate access beds to lose. There are very few, if any, left.
Madeleine Drake, in her excellent book Fifteen Years of Homelessness in the United Kingdom, sums it up thus:
"Closing the large old hostels and replacing them by smaller modern ones is in many ways a desirable policy, but several difficulties have emerged from it. The first is that at a time when the numbers of single homeless people are increasing, beds are being lost and the numbers not made up. Single homeless people are having to sleep rough, 'crash', or live in hotels which provide worse conditions than prevailed in the large hostels which have been closed. The second difficulty emerging from the closure policy is that the newer

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hostels are less openly accessible to homeless people off the street than were the older hostels. Entry to the newer hostels is normally by referral whereas homeless people could present themselves at the door of the older hostels. The third difficulty is that much of the new provision is targeted at specific need groups".
That sums up the situation in inner London. The homeless people are there but the beds have disappeared, by and large, and there is nowhere for them to go. There are very few alternatives for people in that position. Therefore, they are forced to sleep rough.
However, that is not the whole story. In addition, there is the evidence of the impact of social security benefit changes, the introduction of the 20 per cent. minimum community charge and the grave shortage of permanent, accessible, affordable housing. Even if housing were to be available, from looking at my local paper in London it is clear that even people in work cannot afford the rents. People on minimum benefits, and certainly those receiving no benefit, could never afford the accommodation.
Therefore, we can see the dilemma that faces a great many people who took the Government's advice and got on their bikes and came to London in desperation to seek some dignity, to escape from unemployment and the dole queues. There is a real problem which I do not believe has been understood. The social security changes, in my view, are a major factor responsible for the enormous increase in the numbers of people, old and young, male and female, living on the streets.
That answers one of the points in the Home Secretary's letter. He made another point. He said:
"I understand that, in general, the police arrest only where there is some element of threatening or intimidating behaviour".
However, nowhere in Sections 3 and 4 of the 1824 Act—and I have looked at it umpteen times—are the words "threatening" or "intimidating" used. They are not used in the Act. Instead, the offence of begging is where the person places himself or herself,
"in any public place, street, highway, court or passage, to beg".
If threatening or intimidating behaviour is used the police should prosecute. However, they should prosecute under Section 5 of the Public Order Act 1986 and not under the 1824 Act.
In 1989 throughout England and Wales 1,402 people were prosecuted for the simple offence of begging—an increase of 150 per cent. over the figure for 1988. That is the size of the problem. It can only mean that in those cases there was no element of threatening or intimidating behaviour. Had there been, the police would have been obliged to prosecute under the Public Order Act 1986.
In a letter to Llin Golding, MP, dated 22nd February 1990, Mr. John Patten, MP, writing on behalf of the Government, said:
"There is no specific power of arrest attached to the 1824 Act and sleeping rough and begging are not arrestable offences under Section 24 of the Police and Criminal Evidence Act 1984. But there is a general power of arrest in Section 25 of the Act if the suspect's name and address are not known or the address given is doubtful, in which case it would be
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impossible to serve a summons; or where there are reasonable grounds to believe that arrest is necessary to prevent the suspect from causing unlawful damage to property, committing an offence against public decency or causing an unlawful obstruction of the highway".
As it is not possible to serve a summons on the homeless they are always dealt with by way of arrest, for the reason outlined in Mr. John Patten's letter. However, the Government correctly point out that offences under Sections 3 and 4 of the Vagrancy Act are not imprisonable. Offenders are generally dealt with by way of a fine, but there is an additional sentence of imprisonment in default of payment. Noble Lords will not be surprised to learn that homeless and penniless people therefore have two options—to go out to beg to raise money for the fine, and risk another offence, or to spend time in custody. Consequently, a situation exists in which people are likely to be imprisoned for offences which the Government felt in 1982 were not sufficiently serious to merit such punishment.
The acquisition of a criminal record in those circumstances further disadvantages a homeless person, either in the housing field or in employment. That adds a further burden to people who already have enough difficulties.
I began by saying that the Bill is not intended to deal with homelessness. Neither should the Vagrancy Act be used to try to disguise the real problems on our streets. Homelessness has to be taken out of the criminal justice system and dealt with as the most serious domestic social problem confronting all of us. I have tried to illustrate that the Vagrancy Act 1824 is outdated, redundant, and unnecessary. It is a relic of the past. It has been superseded. Alternative legislation already exists for all the offences one could name. There are 18 alternative offences: begging, theft, damage, indecency, and so on. All the matters covered by the 1824 Act are covered by other statutes. The same applies to the 1935 Act.
I hope that the noble Earl who is to reply will try to answer the points that I have raised and resist the temptation simply to repeat the clearly flawed replies that the Government have made so far. I beg to move.
Moved, That the Bill be now read a second time. —(Lord Stallard.)
Lord Boardman: My Lords, before the noble Lord sits down—
The Deputy Speaker (Lord Alport): My Lords, I am afraid that I have anticipated my noble friend. I have called the Motion. Perhaps my noble friend can intervene at a later stage.
8.18 p.m.
Lord Alexander of Weedon: My Lords, perhaps I may first congratulate and thank the noble Lord, Lord Stallard, for bringing forward the Bill and for the comprehensive and clear way in which he explained its purpose. I suggest that this is a Bill which deserves all-party support and indeed support throughout the House. In particular, I suggest that there can be no justification for treating homelessness as a criminal offence.

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My own interest in the topic is as the current chairman of the trustees of Crisis. It is a charity which is well known for providing the Open Christmas for those who are homeless. It is perhaps less well known that Crisis also seeks to contribute to the funding each year of approximately 275 projects throughout the country which seek to provide shelter for the homeless, so it has direct and widespread experience of the problem.
My predecessor as chairman of the trustees was the noble Lord, Lord Murray of Epping Forest. He is unable to be here tonight but he has asked me to say that he fully supports the Bill. I also welcome the fact that the noble Baroness, Lady Macleod, whose involvement in Crisis together with that of her late husband goes back to its foundation, will speak later in this debate. Before I go further I apologise that because of a long-standing engagement I shall not be able to stay until the end of the debate.
Tonight is perhaps not the occasion to debate why there is the problem of homelessness or its causes. Suffice to say, everyone agrees that it is a problem which has grown and is growing. That must be the awareness of all who go about the streets of London, whether they walk in the City or, if they are lawyers, near Temple Station, or from this House along Victoria Street to Victoria Station.
There is clearly no one cause of homelessness. In some cases family breakdown may be a direct catalyst which causes someone to go out on to the streets. Equally, as the noble Lord, Lord Stallard, said, over recent years there has been greater difficulty in securing social security benefits. There has been the increased release of psychiatric patients into the community and there is a greater shortage of rented accommodation. All those reasons may contribute. But for whatever reason undoubtedly many of those who are on the streets are mentally ill and many of them are young people. Surely it is inappropriate that they, or anybody else, should be branded as criminals for doing so. The purpose of the criminal law is to punish wrongdoing, not to penalise misfortune.
Even when the legislation was first passed, at a time of unrest and social mobility after the Napoleonic wars, there were those who were far-sighted enough to question the principle on which homelessness was made an offence. That view gained force, to the extent that the Vagrancy Act was repealed in Scotland. Indeed, as I understand it, in 1981 the Home Office stated that it had no objection to following Scotland and at some future date decriminalising sleeping rough and begging. That future date has surely now arrived.
As the noble Lord stressed, no one seeks to expose society to threatening behaviour, intimidation, public nuisance, demanding money with menaces, obtaining money by deception or any other offence against public order. All those offences are amply covered by other legislation. The purpose of this Bill is simply and solely to ensure that homelessness and begging for subsistence do not fall within the ambit of the criminal law.
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The purpose of the criminal law, ranging from the law of murder to regulations governing traffic offences, is to protect the public against antisocial behaviour which harms other members of society. It is not designed to add a new pressure to social misfortune or social ills. As I would expect, the Government have recognised that the steady increase in the numbers of homeless people is a social problem. Earlier this year the then housing Minister, Mr. Michael Spicer, promised £15 million toward providing shelter and an advisory reference service for those who are homeless. More recently the new housing Minister, Sir George Young, expressed his considerable concern at the extent of the problem of homelessness. So on all sides this is recognised to be a social misfortune.
If, by contrast to that approach taken by the Department of the Environment, the Home Office seeks to suggest that for some reason homelessness should remain a criminal offence, I very much hope that my noble friend the Minister will clearly spell out the jurisprudential foundation in criminal law for that view. So far as I know there is none.
Perhaps I may now turn to the suggestion sometimes made in the past on behalf of the Government that no person can be convicted unless he has refused a place of shelter. The original Vagrancy Act existed unamended for 110 years. In 1935 by the Vagrancy Act of that year Parliament provided that no one could be convicted unless he or she had been directed to a reasonably accessible place of shelter and failed to apply for or refused accommodation there.
But that provision, sometimes relied on in response by the Government in the past, is not effective to help those who are homeless. Nor is it a protection for them. Of itself it raises new problems. Who is to be the judge as to whether the place of shelter is reasonably accessible? Is the shelter to be deemed to be accessible if the person has no funds to pay to get there by bus or Underground? Nor is there any indication in the legislation as to what should be the standard of the place of shelter. Is a person to be required to go there even though he or she may be subject to violence, intimidation or wretched standards of hygiene and discomfort? The section is simply unsatisfactory.
In any event let us turn to the reality of the extent to which the section achieves, or rather fails to achieve protection for those who are charged before the courts. Those who come before the courts on a vagrancy charge come before busy magistrates' courts. Those people are cold, limp, hungry and almost certainly will not ask for nor receive legal aid. Almost invariably they plead guilty. I very much doubt whether in any of those cases there is a real exploration by the courts or police as to whether they were directed to and refused to go to a reasonably accessible place of shelter. I also very much doubt if in such cases the police always carry out investigations as to whether a place is available in the place of shelter at the time or whether the person has the means to get there or knows how to get there.
In practice those who come before the courts are summarily convicted. They are fined money which

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they do not have and then, as the noble Lord said, may have to serve a 24-hour sentence in lieu of payment of the fine. They are then released on to the streets. How does that help society at all? How does it help them at all? That progression indicates not only the inadequacy of the legal requirement which the Government previously relied on in justification of the Bill but also the utter pointlessness of convicting such a person. It is simply piling indignity on misery.
I also believe that there is another cause of concern in regard to this legislation. All those who have passed homeless people in doorways would have to be rather insensitive not to realise just how exposed those people are. They sleep open to the skies and the elements in a blanket or at best in cardboard boxes. Unlike the rest of us, they have nowhere in which they can be private. They have no door which they can shut as their security against the outside world. They are thus quite intensely vulnerable. It is bound to add to that vulnerability if a policeman approaches them and instructs them to move on, using the possibility of a prosecution to back up that request.
I very much hope that my noble friend will not suggest that the need for the police to be able to move someone on is a justification for retaining this outdated law. The police have ample powers if that person is creating a public nuisance. If that person is not a public nuisance, this legislation should not exist to enable them to move someone on and cause them great concern. I have heard that in fact the process of moving on people by mentioning the existence of the criminal law happens. Again it can obviously add to the anxiety, loneliness and pressure upon those who are among society's most unfortunate.
Perhaps I may draw to a conclusion. Homelessness is a social problem and not a crime. It is sad that some people are homeless of their own choice. I suppose that may be so. But I also suspect that very few people live flat way by choice for long. The majority are trapped. They are trapped because without a home they cannot get work and without work they cannot get a home; or they are trapped because they are mentally unstable and in any event would find it difficult to get employment. It seems to me that it would be intolerable if 170 years after the vagrancy legislation, which even in those harsher days was controversial, our Government with their humanity and care sought to maintain on the statute book either homelessness or begging for subsistence as criminal offences.
In my experience those who beg in this condition are often embarrassed at doing so and they are almost invariably in genuine need. Their condition may be uncomfortable to the remainder of us. We may pass by or the other side or we may stop to give. But either way we are embarrassed to see people in this condition. However, it is not the purpose of the criminal law to spare the embarrassment of society at the plight of its most disadvantaged. On the contrary, it is surely the litmus test of a civilised society that it bend s over backwards to protect such people rather than imposing on them the stigma of criminality. I
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should be rather disappointed if the Government were not to respond positively to the Bill. It has my wholehearted support.
Lord Boardman: My Lords, before the noble Lord sits down perhaps he can assist me on a point which has caused me some anxiety with regard to begging. Would the effect of the Bill be that any person or group of people could beg in any public place provided that they did so peacefully and honestly without causing an obstruction? I do not refer to begging to relieve their homeless plight but to obtain relief for themselves or for any cause. If so, that would cause concern. Can my noble friend help me on that?
Lord Alexander of Weedon; My Lords, as I understand it, primarily the begging on the streets exists for people who claim that it exists for subsistence. I am sure that my noble friend, with his humanity, would regard that as an understandable last resort to seek help. I have no doubt that theoretically, if begging were removed from the criminal law, it might be possible for people without committing a public nuisance to seek to raise money for other causes, whether charitable or personal, without licence. Having said that, they would commit an offence if they used any form of deception in seeking to obtain that money. Thus it is left to the judgment of the person who gives as to whether it is a good cause. I respectfully suggest that, provided that is so and provided that there is no intimidation or public nuisance, there is no reason to criminalise such conduct.
8.35 p.m.
Lord Henderson of Brompton: My Lords, it is late and for that reason I shall be brief. However, I should like the Cross-Benches to be represented, so far as I can represent them in my humble capacity, as supporting the noble Lord, Lord Stallard. I congratulate him on bringing in the Bill, and the noble Lord, Lord Alexander of Weedon, on supporting him from the Government Back Benches. There is therefore support for the noble Lord from all sides of the House. The two preceding speeches have been so persuasive and comprehensive that I shall be extremely brief.
My reasons for supporting the Bill are as follows. The mischief which gave rise to the Vagrancy Act 1824 no longer exists. It was clearly a combination of factors: fear of menacing beggars and fear of the economic instability which they might cause flooding in from Ireland or from the disbanded soldiery after the Napoleonic wars. It was possible that they could be a public nuisance. The familiar words which describe the condition that gave rise to that Act are,
"Hark, hark, the dogs do bark The beggars are coming to town".
They do not come in bands any more. They do not menace the public in such a way as to give rise to that doggerel utterance. They come in trickles, one by one. They are wretched people who for one reason or another cannot go home or who have left home and can find no social security. They have nowhere to go or for some reason or another—one cannot understand why; it is puzzling—they sometimes do

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not wish to go to refuges that are made available to them. The noble Lord, Lord Alexander, mentioned that very likely they may be mentally disturbed. It is a difficult, profound problem which is better left to those who have experience in psychology than to lay Lords such as myself.
However, nobody fears those beggars or homeless people in cardboard boxes. The predominant emotions that we feel on seeing them are of compassion and, as the noble Lord, Lord Alexander, said, of embarrassment. I believe that we feel a collective shame that those people are exposing our inadequacy to cope with them when we find them on the streets. The mischief has gone and we should not pretend otherwise.
A very good schedule of alternatives has been prepared by those who have sponsored the Bill. For the life of me I cannot understand the necessity to keep the two sections of the 1824 Act because it has been shown convincingly that the Act is superseded except in the small respect which is expressly saved in the Bill. I propose that when such part, suitably amended to apply to both sexes, is incorporated into more modern legislation the remainder of the Act can then be repealed as spent. I draw attention to the fact that a Criminal Justice Bill is before Parliament this Session. I can see no better way than to incorporate that saving in the Criminal Justice Bill and in the schedule. The remainder of the 1824 Act can then be repealed as spent. The provision would clearly have much better advantage in a Government Bill than in the tender vessel which is being put out to sea—a Private Member's Bill started in the House of Lords. If by any chance the Government oppose the Bill or ask the House to vote against it and are successful, we should take the opportunity to push hard with regard to incorporating that part in the Criminal Justice Bill.
Both previous speakers asked: if Scotland can do without the residual provisions, why cannot the remainder of Great Britain? The Government may find that very hard to explain. An excuse for retaining this out-of-date Act would need to be very convincing.
Like previous speakers, I have read all the utterances on which I could lay my hands by government spokesmen in the past year or so. I refer to Mr. Waddington (as he then was), Mr. John Patten and the noble Earl. I can find no compelling justification in those utterances for the retention of the Act beyond the saving in the Bill. As with other speakers, I believe that we should not make vagrancy as a way of life punishable by fine, or on non-payment of fine by imprisonment. I would find that intolerable. I very much dislike the thought that the police may be moving those people on by the threat of the Act.
I wholeheartedly support the purposes of the Bill. Any defects can be put right in Committee. I see no reason why it should not have a Second Reading. I favour the repeal of the Act and the retention of the part in respect of indecent exposure in the Criminal Justice Bill because it is more likely to succeed in that
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form than in the Private Member's Bill of the noble Lord, Lord Stallard. I very strongly support his Motion for a Second Reading.
8.40 p.m.
Lord Gisborough: My Lords, I too should like to support this Bill because the law is clearly outdated. It is 170 years old. But I rise to oppose the exclusion of Section 2 about exposure. For a lady to see what is now known as a flasher is offensive, upsetting and affronting and no one would suggest otherwise. But there is little damage done. In an age when a lady can go to a cricket match and be liable to see a streaker, to equate flashing with any other crime such as burglary, where one's house is probably ransacked and defiled, is now over the top. Times have changed since 1824. Magistrates are continually asked to keep people out of prison; so it comes as a surprise that this offence must carry a prison sentence with it.
Most of the people who flash suffer more from weakness of character than from criminal tendencies. There was a man in my town who made a little hole in the door of his father's garage. He sat behind it and when women passed by he opened the trap door and hammered on the garage door. Needless to say, he ended up in prison and that did him no good at all. I took pity on him and employed him for a time when he came out. He was quite harmless. But it was not long before he was in gaol again, and he probably picked up a few tips while he was there. It did him no good at all.
These people are sick, weak and unable to control themselves, and it is quite pointless trying to crowd the prisons with them. What they need is treatment. If there is a real problem, as opposed to the occasional case, under the existing Act, there should be psychiatric units set up to which these people should be sent. That would probably cost no more than sending such people to prison, but there would be a better chance of curing them and would avoid their having to attend the universities of crime and returning again and again. Therefore, there is every reason for modernising Section 2 as well as the whole Act.
8.42 p.m.
Baroness Macleod of Borve: My Lords, the noble Lord, Lord Stallard, has brought to our attention one small but very important part of the whole problem of homelessness. I welcome the discussion on this problem which we shall have on 19th December, when I understand that the noble Lord, Lord Stallard, will introduce the big debate on this very important matter and when we shall be able to discuss much wider issues than these tonight. I must apologise to the noble Lord and to my noble friend, because I do not think I shall be able to stay until the end. I am so sorry about that, but we are running late.
We are discussing tonight Sections 3 and 4 of the 1824 Vagrancy Act. It is suggested that Section 2 should be retained. It will be interesting to know what my noble friend the Minister says in reply to the ideas of my noble friend Lord Gisborough. As we all know, sleeping rough and begging all too frequently go

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together, the one leading to the other. The Vagrancy Act makes sleeping rough and begging criminal offences. I do not think that the repeal of this Act alone is the best way to help these people.
The problem, already acute, is increasing rapidly. In 1988, 573 people were prosecuted under the Vagrancy Act in England and Wales; but in 1989 the figure was 1,396 in the four central London magistrates' courts. Unfortunately—this has been referred to, but as a magistrate I feel that I ought to bring it forward again—it seems that where the defendant is found guilty, the punishment is a fine. As these people have been begging for money in the first place, that procedure does not seem to me to be reasonable. If I was on my magisterial bench I would put the defendant on probation, so that that excellent service could give him some guidance.
It seems that prosecution for the offence of homelessness or sleeping rough is not being implemented, presumably on the grounds that with the changing social pattern some people prefer to sleep out. But the majority, we have to admit, have nowhere else to go and are sleeping rough for that reason. We are therefore discussing whether or not begging should still be an offence.
I agree with the 1980–81 Home Affairs Committee in another place, which concluded that the offence of begging should not be regarded as a means of dealing with the problem of homelessness, but which declined to recommend its repeal because the police would then be powerless to act in response to a complaint or to mitigate a genuine public nuisance.
More recently on 21st March 1990, the noble and learned Lord, Lord Waddington, as Home Secretary, wrote to the Law Society saying:
"The basic purpose of the vagrancy laws is to preserve public order and decency and to protect individuals from offence or injury."
There seem to me to be three categories of beggars. The one causing most concern to the majority of people are the under 16-year olds who come to London having left their homes for a variety of reasons, all well known to us. They arrive here with no roof and usually no money. Under the 1980 Children Act, local authorities have to safeguard the welfare of the children. In other words, they are under an obligation to see that the child has a roof and adequate food and clothing. But unless the police have some authority, these young people will continue to eke out an existence by begging. This is no way for our children to live in what is increasingly a vulnerable society. I am delighted to see today that the Salvation Army are considering looking at the plight of the young homeless. The well-known organising abilities of this excellent band of people ought to be encouraged to give us all their advice.
The second category of beggars are the people who have been begging for most of their lives. I used to find that they managed to get picked up in time to spend Christmas inside. The third category of beggars are a well organised band of people who "do" the stations and streets on a rota basis. They are capable of work, probably draw unemployment pay and keep two lots
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of clothes in a dark alley, one for begging and the other as smart as anyone in your Lordships' Chamber tonight. I am told that they are careful not to use threatening or intimidating behaviour and they sail very close to the wind. If this part of the Act is repealed the vagrants will swarm into London with nothing, and with no one to stop them. I hope the Minister will be able to tell us that the Government are to give urgent thought to these widespread problems.
We need a deterrent. The police must be on hand to see that our city is not made a vagrants' paradise. Meanwhile, I look forward to the debate on 19th December which is to be initiated by the noble Lord, Lord Stallard.
8.49 p.m.
Viscount Brentford: My Lords, I should like to express at the outset what my goal is in this whole field of vagrancy, and why I am speaking in support of this Bill. Put simply, I do not believe that sleeping rough or begging should be a criminal offence. We have already heard, particularly from my noble friend Lord Alexander of Weedon, how the people who are sleeping out or begging or both are a very vulnerable sector of society; otherwise they would not be there. There are many well-known characters along the Strand who have been sleeping out, through their own choice, for 20 years. I am sure that there is nothing that the law can do about that situation.
I should like to mention a few points in relation to Sections 3 and 4 of the Vagrancy Act 1824. First, the wrong atmosphere is created if these two states are criminalised (using that rather unpleasant word). Today The Times has referred to the vulnerability of those people. If they run the risk of committing a criminal offence, that only adds to their feeling of vulnerability and increases the unlikelihood of their being able to get out of the rut in which they are.
Section 4 refers to sleeping rough; but there is no reference in the Act to the requirement of being moved on before a legal offence is committed. According to Section 4 that, coming in from other Acts, is a different matter, just as sleeping out is in itself an offence—and I do not believe that it should be.
Secondly, reference has been made to the problem of convicting a person under the two heads by a fine which they cannot pay. They will either revert to begging or they will go to prison; or, even worse, they will take up stealing in order to provide the money for the fine. That would be a very unsatisfactory state of affairs. Thirdly, if a person is convicted, they get a criminal record and that in turn makes it more difficult for them to gain employment, which is the long-term aim of rehabilitation.
It is often said that sleeping rough is a way of life rather than an act which should be penalised. I therefore question whether sleeping rough should be penalised as a way of life.
I do not believe that these laws achieve the intended aims. My noble friend the Leader of the House, in his previous incarnation in another place, expressed a goal with which we all agree 100 per cent: "The basic

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purpose of the vagrancy laws is to preserve public order and decency and to protect individuals from offence or injury."
The Acts do not do that. I discussed this matter with a lady today and she stated that in the evening she cannot walk from her office to the Tube station because it means going past a large crowd of homeless people. They gather because the Salvation Army will later come along with a truck containing food. When they are together, although they are doing nothing threatening or intimidating, by their presence they make her feel so uncomfortable that she will not walk that way. Therefore, it seems to me that these Acts are not achieving the laudable purpose that was expressed. Either they are not working or they are unnecessary or both; and they are largely redundant.
There are various reasons why these offences can now be repealed. Most of the offences in the Vagrancy Act have already been repealed. Nowadays we do not need to worry about peddlars and the other people referred to in the original Act. Begging under false pretences is covered by the Theft Act. Threatening behaviour or causing offence is covered by the Public Order Act.
Much reference has been made to the repeal of this offence in Scotland. Can the Minister say whether that repeal led to an increase in begging for its own sake? That is clearly an anxiety for all of us, as was so clearly expressed by the noble Baroness, Lady Macleod of Borve.
A question has been raised concerning begging on behalf of charities, or soliciting donations. That situation will continue to be covered by the local authorities' licensing provisions and it is very important that that situation should continue.
Turning to the Bill, I do not favour the sexist tone of Clause 4. It may or may not be necessary to keep that provision and I look forward to hearing my noble friend's reply to the question posed by my noble friend Lord Gisborough. Assuming that the clause is necessary, it should be revised so that it is less sexist.
Section 22, which according to my reading of the original Act is inaccurate in its quotation, is repealed. The only part of Section 22 which stands is the exclusion of Ireland and Scotland. Therefore, that can be dispensed with.
Reference has been made to the 1989 figures and the fact that 1,256 prosecutions for begging were brought in London. The total number of offences is nearly three times the number in 1988. That is something that worries me and I question whether it is a correct use of the courts' valuable time. There were only 24 prosecutions for sleeping out, 12 in London and 12 outside London. That is a very small number, but it leads to the question of whether this offence should be kept on the statute book.
I should like to see those two offences removed from the statute book. Ideally, I should like the Minister to look at the question and see what can be done in order to avoid causing additional hardship to that very vulnerable section of society.
9 p.m.
Baroness Faithfull: My Lords, everything that I was going to say has been said. Nevertheless, I propose to say it again because I feel so strongly about the matter.
I should like to thank the noble Lord, Lord Stallard, for bringing the Bill forward. I agree with the decriminalisation of vagrancy. I do not agree that Clause 2 should be left in the Bill, and therefore I agree with my noble friends Lord Gisborough and Lord Brentford.
The situation regarding vagrancy, begging and indecent behaviour should be looked at again, perhaps by a committee. First, as regards the question of vagrancy, I have looked up the word in the dictionary. A vagrant is one who has no settled dwelling, no settled home and wanders. As many noble Lords have said, in our country today the problem is connected with our housing policy, which causes homelessness.
With regard to the young, research has been carried out—I am not prepared to give a figure because I believe that a survey has been carried out since 1983 —which shows that a high proportion of young people who are homeless have either been in penal institutions or in care and have no home. Therefore, those who say that they should go home mean that they should return to the penal institution or children's home in which they were brought up, which is a legal impossibility.
If a child under the age of 17 is sleeping rough in London, it is possible for him or her to be dealt with under the Children and Young Persons Act or the Children Act. However, if they are 17, 18 or 19 there is no way in which the local authorities can deal with them other than through the housing department, which we know is often impossible.
What is needed in this country is low cost, affordable rented social accommodation. There is no way that such accommodation can be provided on the open market because no landlord will provide low cost rented affordable accommodation when he can obtain a higher income from his property. Therefore, it is quite impossible for it to be provided on the open market.
Who should provide it? I maintain that it should be provided by the local authority. It has been said that such accommodation should be provided by the housing associations but I have been in touch with them and they tell me that they were never set up for that purpose. They were an adjunct to local authorities in order to provide specialised accommodation. I have been told that the organisation to which the Government give money to distribute to the housing associations is in financial difficulties and there is a cash flow problem at present. That brings me to the point that only the local authorities can provide that accommodation. It is then said that if the local authorities provide low cost, affordable rented accommodation, they must build and build. I maintain that it would be possible to lease those properties to people until they can find accommodation for themselves.

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As I said, the homeless and those sleeping rough can be divided into two categories: the very young and older people. The very young resent being sent to hostels. If they go to a hostel, they can stay there for only a certain length of time. What happens to them then? They are back on the streets. Young people want a home of their own in the community, with the community helping them. Therefore, we are back to the situation where we need low cost, affordable rented social accommodation.
With regard to the older people, the other day I asked an old man why he continued to sleep rough. He said, "It is my habit". For many such men it is their habit. If they want to do that and are doing nothing wrong, why should that not be permitted? It is true that some older men do not wish to sleep rough. One Christmas an old man came to me and said that he had come to wish me a happy Christmas. I told him that that was very kind of him but that he was two days early. Fie said, "I know, but I have business to do today". When I opened the evening paper he had "clocked" a policeman and because he had done that rather badly—he was taken to prison and kept there throughout the Christmas period. Of course that is exactly what he wanted. The problem is that he said to the prison governor, "They have not got my usual cell ready for me".
As a result, we set up hostels which many of the older men prefer. However, there are those men who like to walk the country and do not want anywhere to go. They perhaps need a night shelter from time to time. I suggest that our country made a great mistake when we closed Part 3 accommodation which enabled men to walk from the North to the South of England, 25 miles per day, and have somewhere to sleep at night. Therefore, as regards the homeless, I support the noble Lord, Lord Stallard. I believe that he is right to abolish the offence because our social policies lead homeless people to do what they are doing.
As regards begging, surely it is wrong to link begging with homelessness. I know many people who beg who are not homeless. I know many people who are able to obtain money from their parents but they do not wish to do that and so they beg. However, it surely cannot be right to link begging with homelessness. It should be dealt with in a different way under different legislation.
With regard to indecency, I submit that many homeless people would never dream of committing an indecent act. Many people from good homes do commit indecent acts. Therefore, again I believe that it is wrong to link indecency with homelessness. It is a separate problem which should be dealt with separately.
I support this Bill. I agree with my noble friend Lord Gisborough. I do not believe that Clause 2 should remain on the statute book. The last point is most important. I should like to ask why at this stage we are bound to an Act which dates back to 1824. The noble Lord, Lord Seebohm, to whom I am deeply grateful, has given me a quotation which I should like to read:
"New occasions teach new duties
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Times make ancient good, uncouth".
9.8 p.m.
Earl Russell: My Lords, I am glad of that point; it leads into much of what I hope to say. I apologise to the House for intervening in the gap. I do so because I promised long ago to speak on this Bill if at all possible. I did not put my name down because I was not certain that I could be in the Chamber during the course of the debate.
This problem is even older than 1824. If one were to accept the view of some poets that vagrancy might be regarded as a profession it would be capable of competing for the title of the oldest profession. To my certain knowledge the use of the law to deter people from vagrancy and begging goes back at least four centuries, and I believe a great deal further.
I agree with the noble Viscount, Lord Brentford, that the laws certainly do not achieve their desired effect. That has been true at least since the reign of Elizabeth I and, I believe, a great deal longer. Over the centuries a vast administrative burden has been placed on many public officers, but it has achieved very little. The basic idea behind the laws was that by punishment one could deter people from vagrancy and begging; but one cannot deter people from their social condition. That was always the basic misapprehension behind the law.
There has been a cyclical pattern in the enforcement of vagrancy laws over the centuries. The rise in prosecutions that we have seen between 1988 and 1989 is the umpteenth of many. Historians as a profession do not agree about much, but looking at previous occasions in other centuries they seem to be agreed that those peaks in vagrancy prosecutions do not mark peaks in original sin, which is not that much of a variable. They mark periods of exceptionally poor social conditions. The variable relates to the degree of poverty and unemployment and the adequacy of relief.
In the Act of 1601 there was understood to be something of a bargain. On the one hand, there was provision of assured support from public funds and, on the other, an attempt to deter begging. One could see the sense in that bargain. However, every time it has broken down it seems to have been the availability of support from public funds which fell down and not an increased propensity to beg. Everything that has been said tonight, including what was said by the noble Baroness, Lady Faithfull, regarding 16 and 17 year-olds appears to fit into that well-established context.
I listened with a great deal of care to the noble Baroness, Lady Macleod of Borve, who argued a contrary case which deserves attention. It is my belief that it is correct, as the noble Lords, Lord Stallard and Lord Alexander of Weedon, argued, that the offences to which the noble Baroness referred can be dealt with by means other than through the law. Her third category of beggars—almost the same as the ones in velvet gown to whom the noble Lord, Lord Henderson of Brompton, referred—are undoubtedly guilty of fraud. They are undoubtedly guilty of

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obtaining money by false pretences. I believe there are sufficient resources under the law to prosecute them. We do not need this Act.
Every time vagrancy prosecution has been used it has been based on mistaking the symptom for the cause—a mistaken desire to sweep the problem under the carpet. As the noble Viscount, Lord Brentford, said, it makes people feel uncomfortable to see it. In fact, prosecution has always been an attempt to shut the safety valve. That is not a very wise thing to do.
9.13 p.m.
Lord Meston: My Lords, the arguments for the Bill have been put eloquently and powerfully and I shall try not to repeat them. The 1824 Act is a near redundant product of another age. It is written in archaic language which might be thought interesting or amusing in a historical document but which is not helpful or appropriate for a piece of operative legislation as the 21st century approaches.
It is worth reviewing the recent attempts to reconsider this legislation. For example, in 1968 the Law Society put forward proposals for modernisation of the Act. In 1974 the Home Office working party was set up with terms of reference which, unfortunately, did not extend to consideration of the social problems of vagrancy but which recommended modernisation and reform. The Labour Government of the time apparently found no opportunity for legislation.
Paragraph 25 of the 1981 report of the Home Affairs Committee of another place stated that in deciding that the time was not then ripe for repeal it hoped that the offence would be regarded as no more than a temporary means of dealing with an immediate social problem, and that within the then foreseeable future the wider availability of suitable accommodation for the homeless would render the offences unnecessary. That was 1981 and how misplaced that hope was! The reason why these Benches are not more populated this evening is that my noble friends are carol singing with characteristic harmony on Waterloo Station in aid of Crisis at Christmas.
Had we had this debate 10 years ago one of the arguments for reform would have been that the 1824 Act was little used and obsolescent. Now the argument is that, whereas the Act should have become obsolete as the Home Affairs Committee hoped, it is now over-used. In debating reform of the 1824 Act we should be asking ourselves what good it does. The answer is that it does precious little either for society or for the individual offender, who is neither deterred nor practically helped. The vast majority of people who sleep rough do not choose to do so: the vast majority of those who beg do so only because they have to.
If next one asks what harm the 1824 Act does, the answer is that it is probably counterproductive so far as the offender is concerned, and that point has been well made by several noble Lords. It is potentially open to abuse in so far as it effectively gives the power of arrest for essentially non-criminal activities, or indeed for non-criminal inactivities. If one asks what
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effect the Bill will have, the answers seem to be as follows. There would not be a sudden attraction either in sleeping rough or in begging to live. I was not impressed by the floodgates argument put forward by the noble Baroness, Lady Macleod. From what I have heard, it does not seem that there is evidence of the floodgates having been opened in Scotland.
To deal with the truly criminal and offensive misbehaviour of certain people there is an existing and adequate range of other criminal and public order legislation. I shall not now list the relevant Acts of Parliament but they would serve well enough. That point has also been made repeatedly. There is the problem of unduly aggressive begging. As the noble Lord, Lord Stallard, said, that can be dealt with under Section 5 of the Public Order Act 1986. There is also the problem of the bogus charitable collection. That can be dealt with under the Theft Act and other existing legislation which deals with street collections.
The mechanism to deal with the problem of indecent exposure is preserved by Clause 2 of the Bill. I shall not attempt to follow the noble Lord, Lord Gisborough, in an analysis of the difference between flashers and streakers, and neither will I go into the question of whether there is a need to cover the female flasher, so to speak. It is not a problem that I have come across. It may be that he has a point in suggesting that a legislative opportunity should be taken to consider whether punishment by imprisonment in relation to indecent exposure should have the legislative prominence that it presently does.
As several noble Lords have said, as far as we can understand it there no longer appears to be the offence of begging in Scotland. That has been the position since the Civic Government (Scotland) Act 1982 which I spent some time looking at this afternoon. It introduced a modern code to deal with,
"Offences of annoying, offensive, obstructive and dangerous behaviour".
That seems to set a good example for England and Wales where piecemeal reforms are no longer good enough. This is a whole area of the law which could do with rationalisation and modernisation.
Meanwhile, south of the Border and in London in particular there has been a startling increase in the number of prosecutions which cannot be explained except as a symptom of the Government's policy of releasing psychiatric patients into the community and their housing and social security policies. The 1824 Act comes from an age which had no social policy much beyond its penal code. Today's social problems of homelessness and deprivation should no longer be addressed by the criminal law but by political will and well-directed resources. The noble Baroness, Lady Macleod, was right when she said that the repeal of the Act of 1824 will not be enough. If the Government are sincere in their wish to help the homeless, support of this Bill will be a good indication of such sincerity.
9.20 p.m.
Baroness Ewart-Biggs: My Lords, I am grateful to my noble friend Lord Stallard for introducing this very important measure and for doing so with such

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clarity. It has the support of the Labour Party, which believes that the Vagrancy Acts are outdated and unhelpful and should therefore no longer remain on the statute book. My noble friend has had strong support from all sides of the House, led by a powerful speech from the noble Lord, Lord Alexander, which we shall not forget.
The whole question of homelessness is not central to our debate this evening but it has been referred to in many speeches. Noble Lords have referred to the problems which homeless people experience with their benefits and through having no fixed abode. Noble Lords have also referred to the importance of de-criminalising homelessness and begging. There was almost total agreement on that point. Many speakers pointed out that there is already legislation on the statute book to deal with public order offences. As the noble Earl, Lord Russell, and the noble Lord, Lord Meston, asked, how can we keep on the statute book a measure enacted as far back as 1824 considering all the changes that have taken place since that time? The Minister will have to find some powerful arguments to counter the points made in the debate.
The Bill seeks to repeal the Vagrancy Acts but to retain the provision relating to indecent exposure. That point was cleverly discussed by the noble Lords, Lord Henderson and Lord Gisborough, and the noble Baroness, Lady Faithfull. The idea of the noble Lord, Lord Henderson, to include in the Criminal Justice Bill a non-sexist provision relating to indecent exposure seems a very sensible proposition.
Until recently the Vagrancy Act 1824 appeared to have withered away through lack of use. However, my noble friend and the other sponsors of the Bill have been convinced of the urgent need to repeal the legislation by the fact that lately it has been revived to deal 'Kith the growing number of young people sleeping rough on our streets. It is feared by many that the increased use of the legislation is an attempt to tidy up certain areas of London. Many noble Lords have referred to the increase in prosecutions under the Act. It is a sobering thought that between 1988 and 1989 the number of prosecutions increased by 150 per cent.
Lord Boardman: My Lords, is the noble Baroness aware that the vast majority of the prosecutions were not for sleeping rough but for begging?
Baroness Ewart-Biggs: My Lords, I am fully aware of that fact. I intended to give the figures but they have already been given by previous speakers.
Apart from the total lack of humanity in penalising young people for something which is not their fault, what possible point can there be in criminalising them? There can be no justification for making begging or homelessness a crime. The rise in homelessness is due to a number of social and economic factors which surely must be dealt with through social and economic solutions. Criminalising the homeless can only worsen the problem, as the acquisition of a criminal record makes it even harder for those people to find employment or accommodation. It must be true to say that young people sleep
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rough because they have no home and not because they wish to do so, and that they beg only because they have nothing upon which to live.
I support my noble friend's Bill. I do so for the reasons I have given and also because I believe, first, that such Acts are outdated. That fact has been recognised in Scotland where, as I understand it—perhaps the Minister will be able to confirm this—in 1982 the legislation was changed in order to decriminalise begging. Secondly, the role of the criminal law should not be to punish those who have already been marginalised because of their problems, especially the most vulnerable groups; namely, young people and the mentally ill who have been reduced to spending their lives on the streets.
My third reason for supporting the Bill is the backing which it has received from so many organisations, as mentioned by my noble friend. It is also supported by the NCCL and other human rights organisations and by the probation service. I have with me a letter from a probation officer who works in inner London. He says that he is becoming increasingly concerned about the criminalisation of homeless people under the Vagrancy Act, especially the 17 year-olds who are trapped in a no-win situation.
I should like to conclude by giving your Lordships one example of the work carried out by an organisation that is very close to young homeless people. It is a West End day centre called the London Connection, which is situated behind St. Martin-in-the-Fields. The organisation works with the most vulnerable young people who come to London from many different parts of the country. I believe that 12 per cent. of them come from Ireland. They are aged between 16 and 20.
The organisation stresses the fact that when such people arrive in London they are almost always filled with hope and determination to find a job and somewhere to live. If they cannot find somewhere to live, that determination is dampened almost immediately. They then give up and take to the kind of life about which we have heard today. Very often they find a day centre to attend during the day. The staff at the centre try to find them accommodation or, alternatively, try to persuade those who have left home to return home. If both efforts fail, the young people sleep rough at night and spend the morning in a day centre recuperating, after which they go out in the evening either to beg or to busk. The noble Lord, Lord Alexander, gave us a graphic description of these young people when they are taken to the police station. He described how they felt cold and damp and already hopeless. That was a very strong point.
Many such cases have been described to me by the director of the London Connection. He has told me how these young people are charged under the Vagrancy Act and then either let off or fined between £20 and £50 at the magistrates' court; or, as an alternative, they have the choice of spending a day in custody. A point has been made about the cost of such procedures to the system. Not only are such procedures followed but there is sometimes a procedure whereby a social inquiry report is required.

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Of course, such a report must be compiled while the young person is remanded on bail. Therefore, there is not only the disastrous effect on young people and the injustice to be considered; there is also the added cost to the system of charging such young people for begging under the Vagrancy Act.
The noble Lord also mentioned the coverage in the tabloid newspapers. He said that that did not help the situation. There have been headlines in such newspapers stating that young people collect vast amounts of money through begging and pointing out how worthless is such an existence. That is not just misleading, it gives a bad impression of those young people who make only meagre pickings from begging.
I hope that the Minister will at least agree with the Bill's aim. He may find something wrong with the Bill, but he will have listened to some powerful and convincing speeches in which all have agreed that we should decriminalise begging and sleeping rough, and that those are social problems which cannot be solved through the penal code. No one believes that to repeal the Vagrancy Act provides the ultimate solution to the homelessness crisis, but it is at least one step in the right direction.
Homelessness must be taken out of the criminal justice system. The punishment of those vulnerable people merely for being unfortunate and under-privileged should cease. I look forward to hearing what the Minister says. As I said at the beginning, he will have to find some powerful arguments if he is to oppose not just the Bill but the principle that has been expressed all around the House, that we should not criminalise begging and homeless people.
9.31 p.m.
Earl Ferrers: My Lords, we have had an important and moving debate. People from all sides of your Lordships' House have been concerned about the effects of homelessness and begging, the sorrow it causes to those who are involved in it and the distress it causes those who witness it. I am glad that when he introduced the Bill, the noble Lord, Lord Stallard, said that he was not dealing with the appalling problems of homelessness, because that is correct. My noble friend Lady Faithfull amused me, as she so often does. She said that everything she had intended to say had already been said but, like a battleship, she said that that would not stop her from saying it again; and she did. It was good to hear her speak in such forthright terms.
I am in a different position. Nothing that I intend to say has already been said, and so I shall speak from a different point of view. I thought that it might be helpful if I were to explain the Government's position on the proposals put forward by the noble Lord, Lord Stallard. However, I should like first to take the opportunity of congratulating him on his stamina and persistence, but not just in forgoing his dinner. If that were the cause of his stamina and persistence, I would join with him other noble Lords who have also forgone their dinner, and congratulate them. I might
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with modesty also include myself in those congratulations. It was nearly 10 years ago when he first introduced a Bill in another place to abolish the vagrancy laws. He did not have too much luck then, and so he tries it again in the more salubrious surroundings of your Lordships' House. We shall see what success he has here and in another place when the Bill reaches there.
I could probably best help your Lordships if I were to provide an assessment of the legal and practical effects of the Bill if it were enacted and to clarify some of the issues that have been raised during the debate. The subject is one which touches most people's hearts and their natural concerns and sensitivities about homeless people, as has been evident from the speeches. I as well as other noble Lords have seen homeless people in cardboard boxes in the Bull Ring at Waterloo, in doorways along the Strand or in Lincoln's Inn Fields. My noble friend Lord Brentford referred to the Salvation Army truck. I have been with the Salvation Army and seen the astonishing work that it does. After witnessing all this, one would have to be steely-hearted not to feel a twinge, even a tug of conscience, to make one ask, "What have we or what has society done to bring this about?" Of course, there is a kaleidoscope of reasons, and it is neither necessary nor appropriate to bracket everyone as being poor or without jobs. I met one man whose home was in the north of England and who lived in a cardboard box in the Bull Ring. He told me that he went off at three o'clock in the morning to walk for an hour; he had a job in an abattoir where he worked, then he came back and lived in the cardboard box at night. He found that a satisfactory way to live, but it does not mean he was out of a job or necessarily penniless.
When one sees all this, one automatically—but perhaps wrongly—equates homelessness with begging, vagrancy or matters of ill-repute. However, people who are homeless are not necessarily beggars; and people who are beggars are not necessarily homeless. It is important to keep these two disagreeable aspects quite separate and distinct.
The noble Lord, Lord Stallard, my noble friend Lord Alexander in his powerful speech and my noble friend Lady Faithfull, as well as many others, referred to homelessness. We share the concern that many people expressed about it. But it is important not to confuse what we can and should do in order to eliminate homelessness with what is and should be on a separate occasion a legal offence. My noble friend Lord Alexander spoke of what we ought to do to help the homeless. My noble friend Lady Macleod of Borve was also concerned.
There is sometimes a contradiction which was brought out in the remarks of both my noble friend Lady Faithfull and the noble Lord, Lord Henderson of Brompton, that to some people it is a way of life. If so, why should they not continue it? The next moment we say, "These people are sleeping rough, it is a disgrace, an offence; and society should not allow it". There is a distinction to be drawn and the person of

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whom I spoke earlier was content to live that way. It may cause offence to others who witness it, but that is how some people wish to live.
We share the concern of noble Lords who have expressed anxiety about homelessness. The Government have done and are doing a great deal about it in a co-ordinated effort. We have given much in the way of resources to the problem, but it is right to get it into perspective since there has been much understandable criticism of homelessness. The sum of £300 million has been allocated to local authorities and housing associations over the next two years in order to help to house the homeless. Aid for voluntary bodies helping the homeless has been trebled in the past year alone to £2 million. There were government initiatives last June and in the Autumn Statement on 8th November concerned with the single homeless in London. For them over £50 million of additional money is allocated for this year; £38 million for next year; £43 million for 1992–93; and £6.5 million has been given in grant aid to the vital voluntary sector. That means that over the next three years over £100 million is committed to combat single homelessness in London. By any standards that is a great deal of money.
The noble Lord, Lord Stallard, referred to the loss of hostel beds. These should be replaced by the Government's single homeless initiative. The hostel beds will be available to all and not just to those who are referred to them. They will be available to those who turn up at the door. They will be established under a phased programme which will run from January to April next year. It is quite unacceptable that people should sleep on the streets. My noble friend Lady Faithfull said that low cost rented accommodation should be available. It is the basic tenet of housing policy that everyone should have a home which they can afford. The Housing Corporation is the main provider of social rented housing and the Government give it millions of pounds every year. Local authorities should be the enabling authority but not necessarily the provider.
Housing benefit is available for those who cannot meet 100 per cent. of their rent. Under the single homeless initiative we shall be providing more rented accommodation in the next few years. Some £38 million is to be provided next year and £43 million is to be provided in 1992–93 specifically for homeless people on the streets. The money will be provided to move those people to hostels.
The noble Baroness, Lady Ewart-Biggs, mentioned benefits. People who have no fixed abode can still claim benefits. They can claim income support and unemployment benefit. People without an address can also register as unemployed. The noble Lord, Lord Stallard, said that the social security rules caused homelessness. There are a wide range of benefits, including income support, which continue to be available to homeless people. Therefore there is no reason for anyone to be without an income. Housing benefit is available to pay for reasonable rent and accommodation charges.
The noble Lord, Lord Stallard, asked whether it
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would not be possible to manage without a Vagrancy Act. The legislation, he said, had been repealed in Scotland. However comparisons with Scotland are not very illuminating. The criminal law in Scotland is different to that in England. The Scottish breach of the peace powers at common law enable action to be taken where such action would not be possible in England and Wales. My noble friend Lord Brentford asked what the position was now that the situation had changed in Scotland. I cannot give my noble friend an answer. I doubt whether I could provide an illuminating answer as statistics do not show the size of the problem.
My noble friend Lord Alexander of Weedon, the noble Lord, Lord Meston, and my noble friend Lady Faithfull referred to the mentally ill. They said that such people should not be discharged into the community. I agree with those remarks entirely. By 1st April next year all district health authorities will be required to initiate, in collaboration with local social services departments, explicit, individually-tailored care programmes for such people. The care programme approach is reinforced by the new specific mental illness revenue grant and by the project for increased authorisation for capital expenditure on mental illness. Those measures should help to secure improvements in community services and ensure that mentally ill people are not discharged from hospital unless there are adequate health or social services available to meet their needs.
All these are important factors which the Government are addressing. The Bill introduced by the noble Lord, Lord Stallard, does not propose any new measure to ameliorate or alleviate the basic problems of poverty and vagrancy. It concerns itself solely with the reform of a part of the criminal law; namely, the Vagrancy Act 1824. The Bill states in effect that the Act is obsolete and that it does more harm than good in today's society. The Bill further suggests that the Act should be taken off the statute book.
The only substantive offence in the Vagrancy Act which the Bill proposes to retain is that in Section 4 which enables the police to proceed against those who indecently expose their person to women, the people whom my noble friend Lord Gisborough referred to as flashers. All the other offences in the Vagrancy Act would be dispensed with under the terms of the Bill.
The title Vagrancy Act is somewhat of a misnomer since the Act is concerned with a much broader range of mischiefs than most people have in mind when they think of vagrancy. We need to be clear about the offences which would cease to exist if the Bill were to pass into law.
It is certainly true that the Act criminalises begging in all its various manifestations. It is also true that it enables action to be taken against those who persist in sleeping rough provided—and this is a very important proviso which is all too often overlooked by the Act's critics—that that person has an alternative place to go to or that he or she is causing offensive consequences.

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The Act also provides for action to be taken against unlicensed pedlars, riotous or indecent behaviour by common prostitutes, dishonest fortune tellers and those who are found on enclosed premises for an unlawful purpose, as well as the offence of indecent exposure which the noble Lord would wish to be retained.
It is all too easy, as did the noble Lord, Lord Meston, to mock the quaint way in which the 1824 Act describes those mischief-makers. Also it is not difficult to dredge up various Acts and by-laws which on the face of it might be thought to cover some of the matters with which the 1824 Act was designed to deal. That was the approach of the noble Lord, Lord Stallard.
I cannot agree that the alternatives put forward by the critics of the Vagrancy Act are satisfactory. The offences proposed do not fit or have inappropriate penalties. There is no specific offence of begging outside the Vagrancy Act. Some of the offences in the Public Order Act might catch some bad cases of begging, as the noble Lord, Lord Stallard, suggested. However, they are not specific and because they require proof of different and wider mischiefs they could well mean, for example, that an old lady would be forced to go to court to testify in order to get action against an aggressive beggar. There is much to be said for the Vagrancy Act, with its straightforward remedy for a straightforward mischief, rather than resorting to the artificial use of charges that were never intended for that purpose.
There is another approach, however, which questions whether it would be advisable to alter, still less to do away with, provisions which the police evidently find valuable in dealing with particular types of undesirable activity and which in the instances which I have described are scarcely ever applied to the homeless. That certainly was the view in another place when the Home Affairs Select Committee considered the vagrancy offences in its 1980–81 session. The committee decided that the Act should stay.
The number of prosecutions for those other offences is considerable. They totalled 2,053 in 1989. Taken together they outnumber the prosecutions which were instituted for begging, 1,405, and sleeping rough, a mere 24 across the whole of the country. We have heard a certain amount about police action against the homeless. The fact of the matter is that prosecutions under the Vagrancy Act for sleeping rough are extremely rare. As I said, there were only 24 prosecutions in 1989 for the whole of England and Wales. Only 12 of those were in London. So far as we know, not a single person aged under 17 was prosecuted for sleeping rough in London. Therefore, although some people may say that the police are persecuting the homeless under the Vagrancy Act and because of the Vagrancy Act, that does not stand up to the facts.
The noble Lord, Lord Stallard, and my noble friends Lord Alexander and Lord Brentford argued that it is wrong to have on the statute book an offence which punishes those whose only crime is that they are
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obliged to sleep on the streets—in other words, homelessness. They are perfectly right, but no such offence exists. The Vagrancy Act was amended in 1935 in order specifically to provide that no one can be prosecuted for sleeping rough unless they are spurning free and accessible accommodation or unless their sleeping rough has offensive consequences. Therefore, it is simply not true to say that the Vagrancy Act makes it a criminal offence to be homeless. It does no such thing. What it does is provide the police with what many think is a useful power and indeed a reasonable one to point the homeless toward available accommodation.
If the Vagrancy Act were to go, so would the power to help those who would not otherwise accept help. That Act enables the police to direct the homeless to shelter which they can take up. If that shelter is refused the police can take action against them. If the Act is removed the police will have no power to move the offenders to better accommodation. They will have no power at all to move them. Some would remain on the streets inadequately housed, and that would be an offence to the people involved and to others.
I now turn to the different matter of begging which has been referred to by a number of noble Lords. It is important. It is true that there are more prosecutions for begging nowadays and it is also true that most of those are in London; but it is not true to infer from that that those who beg are necessarily genuinely needy or homeless. It is certainly not true that they are young. My noble friend Lady Macleod of Borve was concerned about the plight of the young who beg. Only two young persons were prosecuted for begging in London last year. No young persons at all were prosecuted for begging in the rest of England and Wales. So prosecutions for begging are in practice restricted to adults.
It is clear that the police receive many complaints about beggars. If people have a genuine need to beg that is a state of affairs which all of us deeply regret, but all the social security provisions which are available nowadays are designed to make begging unnecessary. My noble friend Lord Alexander said that my humanity should be such as not to make begging a criminal offence. Whatever one's views about the sociology of begging, I agree with my noble friend Lady Macleod that some beggars—not all—are no more than idle rogues who are prepared to use any racket in order to cadge money from the public.
Some of them are quite clearly on the look out for soft touches and can cause quite serious offence. For instance, one hears of begging near Notting Hill because Middle Eastern gentlemen are sometimes considered to be more generous than others who live there. Of course, if you take a dog with you, the pourboire is likely to be considerably enhanced because people feel sorry for the dog. The noble Baroness, Lady Ewart-Biggs, shakes her head. I simply say that not all beggars are genuine. She must accept that.
I do not deny that there are some offences in the Public Order Act 1986 which might catch the activity of some beggars, but there is no specific offence of

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begging in that Act. For a successful prosecution under the section of the 1986 Act mentioned by the noble Lord, Lord Stallard, certain additional matters have to be proved, such as that the behaviour complained of causes harassment, alarm or distress. As I explained earlier, that might require the victim to go to court for the matter to be proceeded with.
It is not impertinent to pose the question: why should a person be subjected to all that when the simple mischief is that he was the object of a beggar's attention? The virtue of the Vagrancy Act is that begging which amounts to a nuisance can be dealt with before it reaches that pitch and certainly before it amounts to blackmail, demanding money with menaces or any of the other so-called alternative offences which were mentioned by noble Lords. The question to be faced is whether we want to deprive the police of the power to act in response to genuine complaints from members of the public about begging and of the ability to mitigate what is and can be a genuine nuisance.
The noble Lord, Lord Stallard, and my noble friend Lord Alexander said that we should not send beggars to prison. My noble friend Lord Brentford said that people should not be sent to prison for sleeping rough. Imprisonment for begging and for sleeping rough was abolished in 1982. The noble Lord, Lord Stallard, then went on to say that it was pointless to prosecute the poor under the Vagrancy Act because the poor do not have any money to pay fines. My answer is that the courts are well able to take account of the means of people who come before them in deciding the appropriate sentence. They could quite easily, for example, give a conditional discharge. In some cases—and begging may well be one of them—the offender will have money. But prosecutions and convictions are not the object of the exercise where homelessness is involved. We are concerned that the police should be able to use an effective power which is provided by the Act to point the homeless to free, available shelter.
The noble Lord, Lord Henderson of Brompton, said that he would like to see the Criminal Justice Bill used to repeal the Vagrancy Act except for the indecent exposure offence. I wish to make two points. First, the Criminal Justice Bill deals with the administration of justice and not the creation of new criminal offences. Secondly, it makes no real sense to describe the Act's offences as spent, as I believe the noble Lord wished to do, when they are in fact still well used. It is of note that 3,482 prosecutions under the Vagrancy Act were made in 1989 and less than half of those were for indecent exposure.
Lord Henderson of Brompton: My Lords, will the noble Earl say how many of those prosecutions by the police were instigated by members of the public? It is one Of the noble Earl's great arguments for the retention of those provisions. Without such prosecution by the police there would be no way for members of the public to bring prosecutions except in person. It would be very interesting if he could tell us how many originated from requests by members of the public.
Earl Ferrers: My Lords, I do not have those figures. I do not know whether the statistics would show them. My guess is that they would not.
The noble Lord, Lord Stallard, is right to worry about vagrancy. It is a matter that concerns us all. It is one of those subjects where one's natural response is to look to social policies rather than to the criminal law for answers. I agree with him on that. That is our primary response too.
I have tried to explain what we are trying to do as a Government over homelessness. I believe that it is a substantial amount. However, there is too a role for the criminal law with regard to begging. We have seen a role also, albeit a rather limited and unusual one, as regards those who sleep rough. We have also hesitated—your Lordships might think wisely—about sweeping away all the offences in the Vagrancy Act. That is why the Government have a natural hesitation in giving a chorus of approval for the noble Lord's Bill. However, in the end it is a matter for your Lordships to decide. I shall watch its progress with interest.
9.58 p.m.
Lord Stallard: My Lords, I am grateful to all those who have participated in what has been an exceedingly interesting debate and for the constructive and helpful remarks made by noble Lords and noble Baronesses on both sides of the Chamber.
I have listened closely to the arguments. I can see much sense in some of them, in particular with regard to Clause 2. There may well be a case for amendment of that part. I have never professed that the Bill as it stands has no defect or is unable to be amended. I shall be only too pleased to consider amendments.
I thank the noble Earl for his long and in places understanding reply. I was more grateful to him when he left his brief. He spoke then in his own compassionate way —I know him to be a compassionate man. I felt a little sorry that he had to read a brief prepared by people who are not in touch with the real world. One had only to listen to the noble Lord, Lord Alexander, to find out what happens in the real world. What happens to these people when they appear in court? Where do they go from there? How are they put into custody? Concrete examples were given. They were not dreamt up to answer a debate in a sedate Chamber, as the noble Lord said, but demonstrated a real understanding of the law.
I was a little sad to hear the noble Earl having to read that brief. Much of his brief was more relevant to next week's debate on homelessness. I certainly welcome the initiatives that he mentioned, and I dare say that they will be repeated. But they are not really an argument for retaining the Vagrancy Act, which deals with a completely different set of circumstances.
Earl Ferrers: My Lords, perhaps I may interrupt the noble Lord. He is being very fair. The argument might have been more suitable for next week's debate. The only reason that I mentioned it tonight was because much of the debate turned around homelessness.
Lord Stallard: My Lords, I am glad the noble Earl accepts that these initiatives will be better discussed in

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a broader debate on the whole question of homelessness. But in this narrower field I did not feel that the noble Earl justified the retention of the Act because he did not reply to the points that I made about the schedule of alternatives. I do not know whether he has seen it, but I shall be happy to send him a copy of that schedule. Nor did the noble Earl reply to my point about the 1986 Act, which gave the police specific powers to deal with the nuisance that he mentioned. The 1986 Act used the same words that the 1981 Act used to oppose a repeal. So that point was adequately clear, and the noble Earl did not reply to it.
There are various sections of the Theft Acts which he did not mention and which deal with demanding money and obtaining property by deception. This would encompass feigning poverty in order to obtain money. These are already offences under different Acts. The noble Earl mentioned them as if they did not exist, and implied that if we took away the Vagrancy Act, none of these offences would exist. But they exist in 18 different statutes which can be used. So there is no justification for cluttering up the courts, or for sending people to gaol when we are trying to get people out, so as to make room for the real villains. The noble Earl did not in my view justify the retention of the Act on any of those grounds at all.
He mentioned the question of equating begging with vagrancy. It has been equated ever since the first Act was introduced. They are always lumped together, and the 1824 Act is the same. It is that that we are trying to get rid of. In some parts, the noble Earl was really arguing for the repeal of this ancient law and for replacing it with something else, though he did not say with what else.
So I feel that the arguments have been posed. Constructive proposals have been made and suggested amendments are acceptable to me. In view of all that and what has been said, I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

London Underground (Victoria) Bill
Brought from the Commons, read a first time, read a second time pro forma, and committed to an Unopposed Bill Committee.
Clyde Port Authority Bill
Brought from the Commons, read a first time, read a second time pro forma, and committed to a Select Committee.
Tees and Hartlepool Port Authority Bill
Brought from the Commons, read a first time, and referred to the Examiners.
Shard Bridge Bill
Brought from the Commons, read a first time, and referred to the Examiners.
Greater Manchester (Light Rapid Transit System) (No. 5) Bill [H.L.]
Reported from the Unopposed Bill Committee with amendments.

King's Cross Railways Bill
A Message was brought from the Commons, That they have made the following orders to which they desire the concurrence of this House.
That the promoters of the King's Cross Railways Bill may, notwithstanding anything in the Standing Orders or practice of this House, proceed with the bill in the present Session; and the petition for the bill shall be deemed to have been deposited and all Standing Orders applicable thereto shall be deemed to have been complied with;
That the bill shall be presented to the House not later than the seventh day after this day;
That there shall be deposited with the bill a declaration signed by the agents for the bill, stating that the bill is the same, in every respect, as the bill at the last stage of its proceedings in this House in the last Session;
That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the bill has been presented and, when so laid, shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);
That all petitions relating to the bill presented in the Session 1988–89 which stand referred to the Committee on the bill, together with any minutes of evidence taken before the Committee on the bill, shall stand referred to the Committee on the bill in the present Session;
That no petitioners shall be heard before the Committee on the Bill, unless their petition has been presented within the time limited within Session 1988–89 or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
That in relation to the bill, Standing Order 127 relating to Private Business shall have effect as if the words 'under Standing Order 126 (Reference to committee of petitions against bill)' were omitted;
That no further fees shall be charged in respect of any proceedings on the bill in respect of which fees have already been incurred during the last Session.
House adjourned at three minutes past ten o'clock.