Lords Sitting of 15 February 1990

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Liverpool.): The LORD CHANCELLOR on the Woolsack.

Company Cars: Imports
Lord Jay Lord Jay asked Her Majesty's Government:
What percentage of cars imported into the United Kingdom in 1989 were classed as company cars.
Viscount Ullswater: My Lords, 45 per cent. of the cars imported into Great Britain in 1989 were classed as company cars. I regret figures relating to the United Kingdom are not available.
Lord Jay: My Lords, in that case, and as I understand that at least 50 per cent. of the new cars sold are company cars, would not a tougher tax treatment of company cars be beneficial to the Budget revenue, the balance of payments, and probably to traffic chaos in London?
Viscount Ullswater: My Lords, I agree with the noble Lord that 51 per cent. of new cars registered are company cars. However, it would certainly be wrong to accept the noble Lord's proposals because companies have a greater propensity than private individuals to buy UK-produced cars. If the company car market is eroded then UK-based companies will have the most to lose as overall sales fall, while the level of import penetration is likely to rise.
Lord Renton: My Lords, is it not wise for more company cars and private cars to be British, bearing in mind that British cars today are of excellent quality and are sold at competitive prices?
Viscount Ullswater: My Lords, I entirely agree with the remarks of my noble friend, but the Government's policy is that buying British without regard to value for money would insulate suppliers from competitive forces. It would be against the car industry's long-term interests, and it would almost certainly conflict with our international obligations.
Lord Stoddart of Swindon: My Lords, is the noble Viscount able to tell the House what constitutes a British car? What proportion of the composition of a car makes it a British car? Is it 60 per cent., 70 per cent., 80 per cent. or 100 per cent.?
Viscount Ullswater: My Lords, the answer to that, so far as these figures are concerned, is a car made in this country.
Lord Elton: My Lords, is it not the case, if my noble friend wishes to base his policy on the Question by the noble Lord, Lord Jay, that the Question
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should not be what percentage of cars imported into the UK were company cars, but what percentage of company cars were imported into the UK?
Viscount Ullswater: My Lords, the figure is almost the same; it is about 48 per cent.
Lord Stoddart of Swindon: My Lords, I am sorry to come back to the noble Viscount, but he evaded my question. He said that what constitutes a British car is one made in this country. One understands that, but does it constitute a car produced in this country from British components made in this country, or does it also constitute a car put together in this country by a screwdriver, using parts imported from abroad?
Viscount Ullswater: My Lords, yes, it would. What has happened over the past 15 years is that car production has dropped from a level of 1·5 million in 1974 to 1 million in 1979. That is a drop of one-third. It has now risen to 1·3 million and we hope, with continued investment, especially from abroad, it will rise to 2 million by the mid-1990s.
Lord Hatch of Lusby: My Lords, is the noble Viscount aware that according to one estimate the taxpayer is subsidising company cars to the tune of £2·8 billion a year? Is he further aware that these company cars are emitting 14 million tonnes of carbon dioxide per year?
Viscount Ullswater: My Lords, the whole business of company cars is rather complicated because company car registrations do not include registrations by self-employed persons for business use.
Lord Rodney: My Lords, can my noble friend tell the House whether a company car emits more carbon dioxide than a private car?
Viscount Ullswater: My Lords, I do not think it would do so.
Lord Williams of Elvel: My Lords, since the Government are in fact subsidising company cars—I am sure the noble Viscount recognises that there are considerable benefits to an individual who has a company car —would it not be appropriate for the Government to take up the point made by his noble friend Lord Renton, that such cars should only be subsidised if they have a large UK component in them?
Viscount Ullswater: My Lords, I do not think I can go any further than my earlier answer. Buying British without regard to value for money would insulate the suppliers. As for the tax regime, that is a matter for the Chancellor.
Lord Jay: My Lords, can the Minister also tell the House whether, when the Government say that a higher proportion of our manufactured imports consists of capital equipment, they are classing company cars as capital equipment?
Viscount Ullwater: My Lords, I did not catch the noble Lord's question.
Lord Jay: My Lords, when the Government tell us, as they often do, that a high proportion of our imported manufactured goods are capital goods rather than consumption goods, for that purpose do they count these company cars as capital equipment?
Viscount Ullswater: My Lords, I shall have to find out and write to the noble Lord.
Lord Hatch of Lusby: My Lords, will the noble Viscount answer my question? Is he aware of the estimate —and is it the same estimate as the Government's?—of the subsidy by taxpayers to company cars which has been placed at £2·8 billion a year? As he said, more than half of the new cars purchased each year are company cars. Their use is also estimated to be three-quarters for private use.
Noble Lords: Question!
Lord Hatch of Lusby: My Lords, that is subsidising the emission of carbon dioxide into the atmosphere, whether they are company cars or private cars, but more than half of the new cars are company cars.
Viscount Ullswater: My Lords, the noble Lord's question —if there was one —does not take into account the benefit charged to the person using the car, the taxpayer.
Lord John-Mackie: My Lords, are not the people who own company cars taxed on them as a perk, or am I the only person who is charged by the Revenue for that?
Viscount Ullswater: My Lords, the people who use company cars for their own benefit are taxed on them.

Defence Budget
3.9 p.m.
Lord Mayhew Lord Mayhew asked Her Majesty's Government:
Whether they will review the size and balance of the defence budget.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, the Government will continue to provide the resources necessary to assure the defence of the United Kingdom and to meet our wider obligations. The future structure of our forces will need to take account of international developments and progress in arms control negotiations; and we shall continue to examine options for change, subject always to assuring our security.
Lord Mayhew: My Lords, does that mean that until agreement has been reached in the CFE talks in at least a year's time, we shall be continuing with the same structure and balance of our forces as we did before any of the revolutions in Russia and
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Eastern Europe? Does it mean that we propose to spend more on defence in real terms this year, next year and the year after? Is that not a lunatic policy?
The Earl of Arran: My Lords, most certainly it is not a lunatic policy. The noble Lord, Lord Mayhew, knows very well that the situation in Europe is uncertain and potentially unstable. We must always move with caution: as long as a capability exists for aggression we must maintain a defence which is able to deter it.
Lord Boyd-Carpenter: My Lords, despite the reference to lunatic policies by the noble Lord, Lord Mayhew—and he speaks on that subject with authority—can the Minister confirm that the Government will continue to bear in mind that twice in the lifetime of many of us we went into wars from which we suffered and which we very nearly lost, largely because in time of peace we had failed to provide for adequate national defence?
The Earl of Arran: My Lords, those words are almost precisely the same as those used by my noble friend about a week ago concerning this question. The points that my noble friend makes today still hold good.
Lord Mellish: My Lords, I speak as one who absolutely agrees with the Minister that Britain should be armed to the teeth against any possible aggression, full stop. Nevertheless, does he not agree that international reactions right across the world have led to a lowering of tension? I am sure that all noble Lords are pleased to hear that. Does the noble Earl further agree that it is time for the Government to say "If armaments are lowered we will be among the first to do so and thereby reduce our defence budget"? Is that not logical?
The Earl of Arran: My Lords, I say to the noble Lord that we shall continue to examine our options.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that the noble Lord, Lord Mayhew, must be defended on the charge of belonging to the loonie Left? No such membership is possible in his case. Does the Minister agree that the Government themselves are vulnerable to such a charge, particularly as regards Trident? Can the Minister say what possible use there can be for continuing with this absurd project?
The Earl of Arran: My Lords, I say to the noble Lord, Lord Jenkins of Putney, that the position of the United Kingdom on Trident is well known in that superpower arsenals would have to be reduced substantially below 50 per cent., with no significant change to the Soviet defence capability, before we could consider how best to contribute towards arms control in the light of a reduced threat.
Lord Graham of Edmonton: My Lords, in view of the — —
Lord Nugent of Guildford: My Lords, is my noble friend aware that though there may be many weaker

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European countries at this time, the same amount of armaments is still there? Does he not agree that in some respects that makes the position even more dangerous and even more necessary for us to make sure that our own armaments are sufficient?
The Earl of Arran: My Lords, my noble friend is quite correct. At all times we must be fully aware of the capabilities of the Warsaw Pact.
Lord Graham of Edmonton: My Lords, in view of the current major changes in Eastern Europe in particular, is the Minister prepared to say a little more about the changed priorities of the Government? Can the noble Earl say when the Government expect to announce any change at all in the existing defence policy?
The Earl of Arran: My Lords, I should have thought that the answer to that is very obvious; namely, that we should continue to watch very carefully the developments between East and West and to take decisions, if and when necessary, according to circumstances.
The Earl of Lauderdale: My Lords, does my noble friend agree that the Russians have a gigantic navy and particularly in respect of submarines? Does he further agree that it is by no means certain, given the instability within Russia, that the present regime there will stay in power?
The Earl of Arran: My Lords, I can inform my noble friend that as regards the Soviet Navy, the Soviet Government are currently engaged in major combatant and submarine construction programmes in all major categories of naval vessels. The only sectors showing any sign of long-term reduction are those concerning missile patrol boats, minor combatant and auxiliary vessels.
Lord Molloy: My Lords, does the Minister agree that while it would be a crass absurdity to make any dramatic reduction in our defence budget, at the same time changes are occurring in central Europe? Does the Minister further agree that there may be grave changes both in NATO and the Warsaw Pact so that not only do we need to spend money on defence, but we need to see that our defences are strategically placed in the right places, combined with the right ideals, in order to meet any strategic difference that occurs? It is vital that the defence budget is used strategically for the defence of these islands.
The Earl of Arran: My Lords, the defence budget and expenditure is always used with strategy and care particularly in the long-term costing operations. I point out to the noble Lord that it is the strength and cohesion of the alliance, together with a willingness for dialogue, which has helped to bring about the present much improved international situation.
Lord Jenkins of Hillhead: My Lords, will the noble Earl accept that many of us will agree with him that there are great dangers and instability in the present
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and future state of Europe and that it is as well not to be euphoric about what is happening? Will he further agree that if Her Majesty's Government were to be almost the only Government in the West which did not look forward in any sense to a peace dividend, that could well inhibit us from playing the part that we ought to play, through economic aid and other means, towards achieving a new balance and stability in Europe?
The Earl of Arran: My Lords, I have to make the same remarks to the noble Lord, Lord Jenkins. We must not undermine the prospects for a CFE accord by making unilateral reductions in our force levels. The British Government will not be stampeded into hasty reductions which we would later regret. We must always ensure that our security is never jeopardised.
Lord Bonham-Carter: My Lords, would the noble Earl therefore agree that, in the view of the British Government, the behaviour of President Bush and President Gorbachev is unwise, foolish and dangerous?
The Earl of Arran: My Lords, the decisions, thoughts and procedures taking place between those two superpowers are well known to your Lordships' House. Allies were consulted and they have agreed.
Lord Taylor of Hadfield: My Lords, does the Minister agree that this is a time when we should remember that in 1932, had we listened to Winston Churchill, the horrors of World War II would have been avoided and we would not have had the murder and slaughter which resulted? Surely, this is the time when that should be taken into account and considered and we should keep ourselves reasonably well armed.
The Earl of Arran: My Lords, I believe that your Lordships would do well to pay heed to the remarks of my noble friend.

Interest Rates and the Economy
3.17 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What are the effects on the economy of the present levels of interest rates.
The Paymaster General (The Earl of Caithness): My Lords, the Government's tight monetary policy is working. Demand is slowing and lower inflation will follow.
Lord Dormand of Easington: My Lords, does the noble Earl agree that it is now crystal clear that the 11 consecutive increases in interest rates over the past 18 months represent a blunt instrument which is wholly inappropriate to the economic problems caused by this Government? Can he say how much consideration is being given to the effect of interest rates on investment, the exchange rate and the trade

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deficit? Perhaps I can be so insensitive and cruel as to mention today's announcement concerning the mortgage rate which is now at a disgraceful level. Not least, I refer to the business failures. Is the Minister aware that in 1989 the number of business failures rose to 18,163, an increase of 10 per cent. on 1988? Does the noble Earl agree that the time is now ripe —in fact it is long overdue —for a complete change of policy?
The Earl of Caithness: My Lords, the noble Lord asked me many questions which I believe run into almost double figures. I shall pick on the one on which he majored at the end; namely, the question of bankruptcies. The noble Lord mentioned the figure. Your Lordships will be aware that in 1989 over 80,000 more businesses opened rather than closed. In December alone there were over 7,600 net new registrations announced by Customs and Excise. It is the Government's job to create the right climate for businesses and that is why, under this Government, new businesses have been set up and it is also why, during the last year of the Labour Government, 6,000 net businesses closed.
Lord Tordoff: My Lords, can the noble Earl tell the House what the Government expect to be the likely effect on the rate of inflation of the increase in the mortgage rate?
The Earl of Caithness: My Lords, I am certainly not alone in the Government or indeed in the House in having a young family and a mortgage. We know full well the difficulties that ensue with the latter. I am sure that all of your Lordships will agree that it is much better to keep a tight monetary and fiscal policy to defeat inflation which did so much damage to pensioners and to all those who had savings when we had rife inflation in the 1970s.
Lord Tordoff: My Lords, will the noble Earl answer the question that I asked him?
Lord Barnett: My Lords, can we take it from the noble Earl's first Answer that high interest rates are good for business and that therefore the Government have no intention of reducing them or seeking to reduce them? He seemed to imply in that Answer that 1989 was a good year for business despite the high rates of interest. I accept that high interest rates can have an impact on inflation and demand, but does he not think that it might be helpful to the Government and make them slightly less unpopular if they thought of other methods, such as taxation, which might be less unfair and less damaging to the economy?
The Earl of Caithness: My Lords, I appreciate that when in government the noble Lord was keen to know whether he was popular or unpopular. We are concerned to do the right thing.
Lord Bruce of Donington: My Lords, is the noble Earl aware that figures published today show that manufacturing investment in the last quarter of 1989 was 12 per cent. below that of the previous quarter
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and that employment in manufacturing industry went down by 6,000 last month and by some 49,000 over the year as a whole? Does he still claim that that is an economic miracle, or is the so-called miracle what it always was, a miserable mirage?
The Earl of Caithness: My Lords, I accept that in the last quarter of 1989 business investment went down. But the noble Lord will, I am sure, wish to be the first to congratulate the Government on the fact that the figure was still over 9 per cent. and that in the three years up to 1989 it was over 40 per cent.
Lord Campbell of Croy: My Lords, in considering whether high interest rates are having the intended effect on consumer spending, has the Treasury a heart which would overlook the £70 million estimated to have been spent on honouring St. Valentine yesterday?
The Earl of Caithness: The Treasury certainly has a heart, my Lords, but it also has a head. In financial matters it is necessary that the head should rule the heart as otherwise inflation would get worse.
Lord Stoddart of Swindon: My Lords, we are all interested to know that the Government wish to do the right thing. But is it really the right thing to have such high interest rates that businesses are forced into bankruptcy? Is the policy of high interest rates right when it pushes people into homelessness? Are there not other instruments with which the Government could control the economy, particularly in credit expansion? Why, for example, do they not try special bank deposits? That is one alternative which I give to the noble Earl and which I wish he would use.
The Earl of Caithness: My Lords, I am grateful for the noble Lord's suggestion. We do look at the various alternatives. We have looked at credit control, as the Opposition have suggested to us, but found it to be totally wanting. No other country uses it. It is not effective in modern financing. However, I am grateful for the noble Lord's suggestion. I am sure he will agree with me that the key is to reduce inflation. We do not want to retain interest rates at a level any higher than is necessary but at the same time one must not ease up from a tight financial or monetary policy.
Lord Stoddart of Swindon: My Lords, does the noble Earl not realise that high interest rates are pushing inflation up?
Lord Beaverbrook: My Lords, can my noble friend tell the House what level of interest rates would be necessary to fund the spending proposals of the party opposite?
The Earl of Caithness: My Lords, the proposals of the party opposite vary considerably. One of its most recent documents has 170 ways of increasing public expenditure. What that would do for inflation it has not yet told us.
Lord Diamond: My Lords, while we all recognise that high interest rates have their effect on reducing

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consumer expenditure, is it not also the case that they have very damaging side effects on industry, house purchase and a number of other things? Will the noble Earl convey to his colleague the Chancellor of the Exchequer that Budget time is a convenient opportunity for considering what has been totally omitted by the Government? I refer to the encouragement of personal savings which would achieve much of what is desired by high interest rates without the evil side effects.
The Earl of Caithness: My Lords, the noble Lord makes a Budget representation. The answer to his question is therefore, yes; I shall convey it to my right honourable friend.
Lord Stallard: My Lords, does the Minister agree that a high inflation rate spawns higher wage claims and that higher wage claims and higher wages increase inflation? How does he explain that?
The Earl of Caithness: My Lords, the noble Lord refers to one aspect. There is no doubt that higher wage claims lead to a greater loss of jobs, which is to the detriment of those who put in the higher wage claims.
Lord Annan: My Lords, the noble Earl was less than his usual magnanimous self in scouting the suggestion of the noble Lord, Lord Barnett, that there are other ways of reducing inflation than by simply increasing interest rates. Is this not something that he and his right honourable friend should look into?
The Earl of Caithness: My Lords, I have said not only today but on previous occasions that we look at the whole range of options. That is why the Government are using both a tight monetary and tight fiscal policy.
Lord Elton: My Lords, is my noble friend aware that many of us hope that he will soon be enabling us to consider another Question?
Lord Strabolgi: My Lords, is the noble Earl aware that on average over the country only one family in five can afford to buy its own home and that only one in 10 in the South-East can afford to do so? How does this square with the Government's boast about a property owning democracy?
The Earl of Caithness: My Lords, the noble Lord tempts me to answer a question which is very different from that on the Order Paper. I reassure him that under this Government those on average earnings have certainly had a great increase in their take-home pay.

School Assemblies: Christian Worship
3.27 p.m.
Baroness David Baroness David asked Her Majesty's Government:
What information they have on the implementation of the requirement under the Education Reform Act 1988 for assemblies to be wholly or mainly of a Christian character.
Baroness Blatch: My Lords, the responsibility for implementing this requirement rests with the head teacher of each county school in consultation with the governors. In doing so the head is required to take into account the family backgrounds, ages and aptitudes of the pupils concerned. Schools are not required to submit information to the Government on the nature of the worship they provide. However, my right honourable friend the Secretary of State receives information on the quality of school provision generally through the reports of Her Majesty's Inspectors of Schools.
Baroness David: My Lords, I thank the Minister for that Answer. Do the Government propose to monitor the introduction of the provisions in the Education Reform Act relating to religious education and collective worship? Do they also propose to monitor the decisions of the standing advisory councils on religious education? They have the right under Section 7(6) of the Act to exempt county schools from observing those provisions if they think it appropriate to do so. Have there been any exemptions, and will that part be monitored?
Baroness Blatch: My Lords, I give an unequivocal yes to the monitoring of the quality of religious education in schools. Her Majesty's inspectors will do so in their routine full inspections. Early indications are that schools are making an effort to implement the Act, and the reports coming back are favourable. The reports of full inspections will be made public and religious education will form part of that process. Any breach of the law on the part of the LEA, the school or the standing advisory council will be followed up by the Department of Education and Science. There is also a mechanism for parents themselves to complain, in the first instance to governors, then to the LEA and in the final analysis to the DES itself.
Baroness Seear: My Lords, can the Minister explain how the department proposes to monitor the quality of prayer?
Baroness Blatch: My Lords, I think that I detect a note of facetiousness in that question. Clearly it would be difficult to monitor the quality of prayer. However, I think it is true to say that Parliament decreed that there should be a spiritual dimension to the education of our children; that it was important; that it should be wholly or mainly Christian; and that there should be flexible arrangements for those children, either in groups or whole schools, who are of another faith.
The Lord Bishop of Liverpool: My Lords, I think the Minister will agree that the factor which is perhaps the most decisive in determining whether acts of worship take place which engage and enliven pupils is whether teachers have the confidence, the skill and the conviction to plan them and ensure that they are carried through. However, can she tell us whether the DES is allotting extra funds—and, if so, how much —to support teachers' in-service training in this area?
Baroness Blatch: My Lords, I can confirm that the DES is awarding over £53 million in the current year for training. I entirely agree with the right reverend Prelate that the quality and liveliness of teaching in the subject will be paramount. I think that good and lively teaching will lead to a better quality of prayer; and perhaps that answers more fully the previous question.
Baroness Cox: My Lords, is my noble friend aware that there have been many exciting developments following the introduction of the Education Reform Act 1988; for example, the emergence of voluntary groups of teachers and parents, such as Christians and Tyneside Schools or Christians and Derbyshire Schools? Those groups help with the provision of school assemblies and some of them have actually raised money in order to fund full-time workers for the purpose. Does my noble friend agree that those developments, which foster greater links between the schools and the community in this way, are very greatly to be welcomed?
Baroness Blatch: My Lords, I do not hesitate to say how much those efforts are welcomed. Indeed, there are some exciting initiatives in this respect. The strength of the 1988 Act is that it involves parents and allows teachers who feel unhappy with this subject to bring in outside people who can enhance the quality of religious education in our schools.
Lord Taylor of Blackburn: My Lords, in view of the long and procrastinating discussions which took place when the legislation was passing through the House —noble Lords will remember that we spent many days on the matter; indeed, we extended the number of days originally set aside for the purpose —can the Minister give us an assurance that, instead of waiting for replies from HMIs, the department will monitor the situation very closely and will report back from time to time? I thought we had received such an assurance during the Committee stage of the Bill. It is now some 18 months since the implementation of the Act and we are still as far away as ever from a solution.
Baroness Blatch: My Lords, I hope that I can encourage the noble Lord. I understand that the first returns are expected in September. Therefore there will be some reporting back about the religious education situation and about the numbers of schools which have submitted a bid to have the requirements of the Act lifted. In that case there will be some feedback in the matter. However, of all the subjects which are to be taught in our schools I think that the involvement of parents and the Standing Advisory Council in this one will go a long way to ensure that monitoring is very much a lively and continuing process.
Lord Dormand of Easington: My Lords, does the Minister recall that in implementing the part of the Act to which my noble friend referred due and full regard had to be paid not only to those people who are not Christians but also to those who have no religious faith of any kind? In view of the fact that
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most people in this country are not now Christians will she ensure that HMIs monitor the position, because it can be most difficult for children who have to withdraw from such classes? Moreover, will she also ensure that at some point a report is made on how the implementation of this part of the Act is developing?
Baroness Blatch: My Lords, I must stress as strongly as I can that I do not accept the premise that the majority of people in this country are not Christians. Having said that, I think that the facility of opting out is very well known in our schools. Moreover, the incidence of taking up that option will rebut the statement made by the noble Lord.
Lord Peston: My Lords, the noble Baroness will no doubt remember how much work we put into this part of the 1988 Act. I assume that such work was put in in order that the provisions under the legislation would be obeyed. I wish to ask a question which has arisen in respect of other matters. It is about assemblies, not about religious education. I understood the Minister to say that a parent can complain if he believes that the Act is not being implemented properly in the case of a specific school. However, am I also correct in thinking that it now transpires that in such a case the parent has no redress in law?
Baroness Blatch: My Lords, I think I am right in saying that the noble Lord is wrong in his assumption. It is true that a parent can complain in the first instance to governors. They can make reference to the Standing Advisory Council, to the LEA itself and, in the last analysis, to the Department of Education and Science. Moreover, because this falls within a framework of law, if there is found to be a breach of that law then action can be taken.
Lord Peston: My Lords, I do not wish to pursue this too strongly, but it is an important matter. The noble Baroness says that action can be taken, but the question I asked was: who can take such action? In other words, is a parent in a position to take legal action directly, or does the parent have to rely upon the department doing this for him or her many years in the future when a particular case may no longer apply because the children concerned will have left the school? It is a most serious matter.
Baroness Blatch: My Lords, it is indeed a serious matter. I humbly attempt to answer the question in the presence of my noble and learned friend on the Woolsack. If a parent, having complained to the governors in the first instance, the school, the local education authority and the DES, receives no help whatever, I believe that in the last analysis he or she can go to law. I say that because religious education, the way in which it is taught and the conditions under which it is taught are actually embodied within a framework of law.
The Earl of Lauderdale: My Lords, is it not the case that in an event of this sort an ordinary constituent would be wise to go to his or her Member of Parliament, who could raise the matter on the Floor

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of the House? There is ample opportunity for airing the matter, and for making it well known, whether or not that person wishes to sue the Government.
Baroness Blatch: My Lords, I am grateful to my noble friend. Of course there are many mechanisms for making such a complaint. However, if all those efforts fail and there is still an aggrieved parent who feels that there has been a breach in the law, I believe that he or she can resort to the courts.
Baroness David: My Lords, I should like to ask the Minister a slightly different question. It concerns a situation which has arisen in connection with a school where I am a governor. What is the position of governors in a school where there cannot be collective worship because no teacher can be found to conduct it? As governors are legally bound to provide such tuition, what is the position? Can someone take them to court?
Baroness Blatch: My Lords, I understand that that situation is rare. However, where it exists the head teacher is under an obligation to seek outside help to ensure that the requirements of the Act are met. If a head teacher cannot secure either outside help or help within the school —I understand this to be extremely rare —then he or she would have to consult the Department of Education and Science and seek help and guidance from Her Majesty's inspectors.
The Earl of Lauderdale: My Lords, is it not a fact that where a school cannot find a teacher of religious education there is always a parson in the area who would be very glad, and indeed delighted, to undertake the task?
Baroness Blatch: My Lords, my noble friend is right. It is almost inconceivable that there would not be someone within the vicinity of a school who could come in and assist in the matter.
Baroness David: My Lords, is it not right that it would be impossible to use a parson in this respect because the religious education is supposed not to concern any one denomination?
Baroness Blatch: No, my Lords; I do not think that it is impossible. I think that if there is a genuine will to find someone to do this work a way can be found to meet the requirements of the Act.

Killingholme Generating Stations (Ancillary Powers) Bill [H.L.]
Read a second time, and committed to a Select Committee.

Criminal Justice (International Co-operation) Bill [H.L.]
3.38 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, I beg to move that the Bill be now read a third time. Throughout our proceedings on the
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Bill, all of your Lordships who have spoken have expressed support for the broad principles of the Bill, and I am indeed grateful for that. Moreover, all of your Lordships have always been unwavering in your determination to support measures which are intended to strengthen the fight against international crime —and drug trafficking in particular. These are areas where party affiliation does not matter; but they are areas where we must present a united front in tackling the serious problems which confront us.
I am especially grateful to the noble Lords, Lord Mishcon and Lord Harris, both for the constructive support which they have given from their respective Benches for this measure, and for the customary courtesy which they have exhibited during the passage of the Bill through your Lordships' House. All the questions which they have put and the points which have been made during the course of our debates have been aimed at improving the effectiveness of the Bill. I am grateful to them for that fact.
There is one further specific matter upon which I must express my gratitude to your Lordships. This concerns the patience and the forbearance with which the growth of the Bill has been witnessed during its present passage through your Lordships' House and the way in which it has been received. When the Bill was first introduced it had 14 clauses. It is with some embarrassment that I have to report that it has now nearly doubled in size and stands at 26 clauses.
Perhaps I may again apologise to your Lordships for any apparent discourtesy of which I may have been guilty, through having introduced an incomplete Bill. I explained the reason why the Government acted in this way during our debate on Second Reading. Our view was that the most important consideration of all was that the United Kingdom should ratify the Vienna Convention as soon as possible. We were sure that your Lordships would support this objective and of course you have done so at least this far, and for that I am grateful.
The Bill will enable the United Kingdom to ratify two important international conventions: one on mutual assistance in criminal matters drawn up as long ago as 1957; the other, the Vienna Drugs Convention, drawn up little more than a year ago. In one case the Bill enables us to catch up with our European partners from a position in which we are a long way behind the field. In the other we are one of the leaders of the field not only in Europe but throughout the world. Each will provide us with important tools to help us to co-operate with other countries in the fight against crime.
This measure will not solve the problem of international crime —it would be foolish to claim that —but it is and will prove to be, I venture to think, a very useful weapon in our armoury. As such I commend it to your Lordships.
Lord Mishcon: My Lords, the Minister Is absolutely right. There are no divisions between us, I imagine, in any part of the House. Our endeavour will be to co-operate and to see that international crime, which is now of a grievous order whether in regard to drugs, terrorism or similar matters, will be

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subject to a common fight by the Government, by the Opposition and by those who sit on the independent Benches. It was my happy task to try to help the Bill through its stages. I merely wish to add a word of thanks for the courtesy of the Minister.
Lord Diamond: My Lords, I wish to underline that courtesy. I draw attention to what the Minister said, as I understood it, that where, as in this case, a Bill was introduced which was not complete, as is shown by its history, that was the responsibility of the Minister himself. It was not that of the civil servants, who have been criticised in this House quite improperly on an occasion like this. They were criticised improperly and at length only yesterday.
Earl Ferrers: My Lords, I am grateful to both noble Lords for their remarks. I am grateful to the noble Lord, Lord Mishcon, for saying that this is a common fight in which we are all participants. That is so. We shall continue, I know, on all sides to carry on this fight against drug trafficking and crime.
The noble Lord, Lord Diamond, is wholly correct. In so far as a Minister introduces an incomplete Bill, it is the Minister's responsibility. I accept responsibility for the fact that the Bill was incomplete and I apologise to your Lordships for that. I am grateful to noble Lords for the understanding that they have shown which will enable us to ratify the convention. That would not otherwise have been the case.
Moved, That the Bill be now read a third time. —(Earl Ferrers.)
On Question, Bill read a third time.
An amendment (privilege) made.
On Question, Bill passed, and sent to the Commons.

Contracts (Applicable Law) Bill [H.L.]
3.44 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee. —(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause I agreed to.
Clause 2 [Conventions to have force of law]:
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran had given notice of his intention to move Amendment No. 1:
Page 1, line 22, after ("Articles") insert ("1(1) in so far as it applies to contractual obligations relating to intellectual property rights,").
Lord Tordoff: Unfortunately my noble friend Lord Lloyd of Kilgerran had a fall last night. Although he
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was not seriously injured he is incapacitated for a few days and he sends his apologies to the Committee. I am sure that your Lordships will understand that, although he gives his tacit support to this and later amendments to which he has put his name, since he knows more about the subject than anybody else in this Committee, indeed perhaps in Europe, there is no one on our Benches capable of substituting for him. Therefore the amendment is not moved.
[Amendment No. I not moved.]
Lord Wilberforce Lord Wilberforce moved Amendment No. 2:
Page 1, line 26, at end insert —
("( ) This Act shall apply as between any pasties to a contract who, at the time of conclusion of the contract have their habitual residence, or in the case of bodies corporate or unincorporate, their central administration in a Contracting State.").
The noble and learned Lord said: This amendment arises out of a question which I asked on the Second Reading of the Bill. It concerned the scope or intended scope of the Bill and the convention. The question was broadly, as I put it, whether the Bill was intended to apply to all contracts, whoever made them, all over the world, or whether it was intended to relate to European contracts; EC contracts, as it is broadly phrased.
The noble and learned Lord charged with responsibility for the Bill at that time, the Lord Advocate, was not able to answer the question then but he said that he would write to me. He kindly did so a few days later and said that the intention was that the Bill and the convention should have universal effect, universal scope; that is, it was not intended to apply to what one might call European contracts but to all contracts, with the exceptions mentioned in the convention, Article 1(2); that is any convention which comes before the courts of England, Scotland or Northern Ireland. In that case the court would be obliged to apply the rules of the convention. In view of that I thought that I ought to put down an amendment so that the Committee could consider the scope of the Bill which may have quite serious consequences if it goes one way.
My purpose in moving Amendment No. 2 is to make it clear in the event of ambiguity on the face of the Bill and the convention that the Bill is intended only to apply to EC contracts. That is an expression which I shall explain with greater precision later. Because the matter was not discussed at Second Reading it will be necessary for me to expand upon it a little. I cannot promise the Committee the delight of another extended legal argument between lawyers. For that Members must await the pleasure of the Report stage of the Courts and Legal Services Bill next week. I am merely trying to raise an important point of principle which I suggest is fit to be considered by the Committee.
Where do we start? We are dealing with the Rome Convention of 1980 on the law applicable to contractual obligations. It is important to be clear about the exact scope and purpose of that convention. The Committee can see that very well in the first instance from the preamble. For the convenience of Members I have had printed as my Amendment No. 5 the preamble to the convention

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which, for some reason that I do not understand —perhaps economy —has been omitted from the schedule to the Bill. The preamble states:
"The High Contracting Parties to the Treaty establishing the European Economic Community" —
that is, the original Rome convention—
"Anxious to continue in the field of private international law the work of unification of law which has already been done within the Community, in particular in the field of jurisdiction and enforcement of judgments,
Wishing to establish uniform rules concerning the law applicable to contractual obligations",
and so on. The Committee will note the reference to the,
"field of jurisdiction and enforcement of judgments".
That is a reference to the convention of 1968, again another EC convention which was made part of our law by an Act of 1982. It was clearly, explicitly and definitely restricted to judgments given within a Community state. The preamble to the amendment shows this to be an EC convention. The text of it shows that it is permeated throughout with EC matters. It is not open to accession by any other state. It is a closed convention.
The Committee will see both in the Bill and in the conventions themselves references to the European Court at Luxembourg as being the court which will have jurisdiction as regards interpretation. I suggest that it is absolutely clear that we are dealing here with a closed family contract between the 12 member states which aims at harmonisation of the law relating to contracts as between those member states. In that respect it is like other European conventions which are gradually building up a body of European law. I mentioned the judgments convention of 1968. In that respect I am not concerned to attack or criticise the Bill or the convention in any way, although the Committee may recall that the convention has been strongly attacked by a number of learned writers who say that it is misconceived and unnecessary. However, I am not concerned with that here.
I am perfectly willing to accept the wisdom of bringing the convention as a European document into our law. I wish to pay a tribute to our representatives who negotiated it, particularly to Dr. North of Oxford University who is one of our leading experts in private international law and who has performed a splendid job in obtaining agreement with the representatives of the other EC states.
The Committee will note the expression with which Clause 2 of the Bill is introduced into our law. I pause to note that the Bill refers to conventions in the plural but I do not think the Committee need trouble itself with that. There are three conventions but it is convenient to speak of the convention in the singular. Clause 2(1) states that the conventions shall,
"have the force of law in the United Kingdom".
That is the formula that is commonly used to bring conventions into our law. The suggestion I make to the Committee is that it was never intended by that formula or by the convention itself that either the Bill or the convention should apply to contracts that have no EC connection at all and where no party
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has anything to do with the EC or any member state and where none of the contracts involved have any reference to the EC or to any member state. The purpose of my amendment is to make that clear.
There is nothing unusual in having one section of the law applying within the Community and general law applying outside. That is common form and it occurs in the case of judgments. There are any number of international conventions which apply in one area but which leave the rest of the law to be governed by the common law or perhaps by other conventions. The contrary view —that is, the universal view —would mean applying the rules in Title II of the convention to contracts between persons or between companies from non-member states; for example, to contracts between a United States company and a Swedish company or between a Japanese company and a Norwegian company. The consequences of that are, in my view, extremely serious and not at all academic.
One has to bear in mind the situation of the jurisdiction of our Commercial Court. That court is a remarkable institution. It is difficult to guess statistics but it is absolutely safe to say that the majority of cases which are brought before that court concern foreign entities. My noble and learned friend Lord Goff of Chieveley, who I hope will be with us shortly, will confirm that a figure of between 30 and 40 per cent. of the cases in the Commercial Court concern two parties, neither of whom have anything to do with this country. They are foreigners who bring their cases here. They do that because the Commercial Court is an attractive body and has a high international reputation. It is staffed by judges with great experience and learning who are permanently present and who are thought to provide a good service.
The same is true of arbitration. Arbitrations between foreign parties are brought to this country because the London Court of International Arbitration and the arbitrators it appoints have a high international reputation. It is not an exaggeration to say that the United Kingdom is, I believe, the international centre for commercial dispute. In that respect it is a thoroughly good thing for our law, our lawyers and our balance of payments.
If faced with a choice of law, our Commercial Court or UK arbitrators apply the UK rules of conflicts of law. That is an excellent body of law built up by judges over the years. It is not criticised in any way. As far as I know there is no demand for reform of it. I hope no one will mention the name of Mr. Vogelaar of Brussels. I can confidently say that there is no demand for reform of that body of law. It has been formulated in an accessible and convenient form in our textbooks, which are known all over the world. My noble and learned friends will be familiar with Dicey's The Conflict of Laws. That book contains a comprehensive code which deals with all the subjects which come under the heading of conflicts of laws.
The book contains a whole section on laws applicable to contracts. Rule 180 states:
"The term 'proper law of a contract' means the system of law by which the parties intended the contract to be governed, or,

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where their intention is neither expressed nor to be inferred from the circumstances, the system of law with which the transaction has its closest and most real connection".
That rule is followed by a whole series of other rules and sub-rules which carry the matter further across the whole area that is also covered by the rules in this convention. It is safe to say that as the matter stands at present we have the best of both worlds. We have the convenience and certainty of formulation in a code but we also have the great advantage of flexibility. The rules can be changed at any time as new judicial decisions emerge. They are changed from time to time and a new edition is produced, whereas if a statutory code is established, as is now threatened by the Bill, one would have to pass another Bill in order to change it. As regards the convention, that cannot be changed by another Act of Parliament. It is safe to say that the mini code in Dicey's Conflict of Laws is known and respected, certainly throughout the English-speaking world.
I have with me an effusion by an American professor who concludes it by stating in relation to Dicey's Conflict of Laws:
"The elegance style and analytic powers of the British legal community have survived the decline of the British Empire intact".
That is the kind of reputation that Dicey's Conflict of Laws has.
The wider interpretation of this Bill means that all that would go. The common law would be superseded by the rules stated in Title II of the convention. Any case brought before an English, Scottish, Northern Irish or Welsh court would have to be judged not by the common law and not by Dicey's rules but by the new rules set out in Title II. The Committee will note from a cursory examination of Title II that the rules are framed in new and unfamiliar language. They are not framed in the precision language used by parliamentary draftsmen but in language which has been called the disorganised composition which one normally finds in international instruments which have to be used in order to obtain agreement between professors. Therefore Title II contains totally different language.
There is no precedent of interpretation, whereas Dicey cites all the cases which have preceded in our courts, the American courts, the Australian courts and the Canadian courts. That has never been interpreted up until now. It is liable to be interpreted in the light of the report of the professors —Professor Giuliano of Italy and Professor Paul Lagarde of Paris (referred to in Clause 3(3) of the Bill). It is also liable to be referred ultimately to the European Court of Justice. That is a formidable proposition which faces English law.
One can give hypothetical examples, which sometimes convince and sometimes do not. Perhaps I may give an actual example, which may be a little more convincing, of a case with which I was recently concerned. It was a case between an Indian company and an American company centered in New York. It concerned a large contract involving many millions of dollars. The contract did not include any choice of law clause. Therefore the Indian party and the American party chose to have the case decided
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in England by English arbitrators. The English arbitrators heard the case on the basis of Dicey's rules. It was argued on both sides on the basis of Dicey's rules and it was decided in one day. The parties went away having obtained a solution quickly and cheaply.
Can one believe that those companies would have been willing to have their contract judged by the rules in Title II and that strange language by reference to the professors' report? The professors' report —if one can find it at all because not everyone has the Official Journal of the European Communities on their shelves —runs to 47 pages of two columns each. Can one really expect such people to refer to that report? Can one expect them to have a case judged by reference to the jurisprudence of the Court of Luxembourg, on which neither of those countries has a judge? There is no Indian and no American judge.
Putting the question provides the answer. Such a conclusion is bound to involve a massive transfer of litigation to non-convention states instead of their being brought here. They will either be taken to Ireland or the Netherlands, if those countries are sensible enough not to ratify the convention, or to Switzerland or some other forum. They will not come here. All that business will be lost for no compensating gain. I suggest to the Committee with some confidence that the practical objections to applying the convention universally outside the EC area are overwhelming.
The matter does not rest there. There is what I suggest is a serious constitutional objection so to applying the convention. I do not use the word "constitutional" lightly. It is a word of which I usually have some suspicion as being used by people who do not have a better argument. However, I believe that the matter is of constitutional importance. It may be perfectly acceptable to bring an international convention into English law by the method of stating that it is to have the force of law. There are objections to that, but it is done. It is probably acceptable so long as it is not carried too far. It involves a transfer of language from the convention into an Act of Parliament, which involves difficulties.
In this case one is going very much further. If universal application is intended it involves a substitution of an entire general code or mini-code in the area of conflict of laws for the common law of England and Scotland. If that is to be done surely it should be done in the form of a code, properly drafted by parliamentary counsel in language of precision rather than in convention language, submitted to Parliament for discussion and, if necessary amendment. It should not be introduced by the back door, brought in holus-bolus by schedule which is not capable of discussion and not capable of amendment.
There is therefore a serious practical objection and a not negligible constitutional objection to giving the convention universal force. Then one asks the crunch question. Are we obliged to give it that force because we ratified the convention? I know that there is a body of opinion which believes that we are. That is an argument that has to be met. Having given the

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best thought that I can to the wording of the convention, I suggest that there is nothing either in law or in bona fides which obliges us to apply the convention rules outside the ambit of the European Economic Community.
The supposed universal effect is said to be derived from Article 1(1) and the beginning of Article 2 of the convention. I suggest that they do not have that effect. Article 1(1), it is true, has general words but they are not universal words. Nor are they limiting words. It could have said that it applied to "all contracts concerning the EC" or it could have said "all contracts". It says neither. It reads:
"The rules of this Convention apply to contractual obligations".
Those are general words.
One has to interpret a convention in the same way as one does an Act of Parliament. The Vienna Convention on the Interpretation of Treaties says so. One interprets it in ordinary meaning having regard to the object and purpose of the enactment. Having regard to the object and purpose of the enactment, it is perfectly legitimate and compulsory that one should read those words as being limited to the context in which they are used. The convention deals with European matters and European Contracts and the words should be interpreted accordingly.
Then one comes to Article 2, which states that:
"Any law specified by this Convention shall be applied whether or not it is the law of a Contracting State".
That says only, for example, that a contract between a French company and a German company for the erection of a plant in Nigeria or the Cameroons may be governed, either by choice or implication, by the law of Nigeria or the Cameroons. It does not say any more than that. It certainly does not extend the nature of the contracts to which it applies.
That limitation of the convention to EC contracts is not my thought only. It is confirmed, I believe, by the Notes on Clauses which the noble and learned Lord's department kindly gave me. It agrees with a statement by Dr. North that the object is to facilitate the flow of goods and services within the European Communities. In particular, and I suggest that this is decisive, it is confirmed by the report of the professors which is referred to in the Bill—the report of Professor Giuliano and Professor Lagarde.
Referring to the universal application of the uniform rules the report reads:
"The provisions of Article 2 specify the universal application of the convention".
The commentary on Article 2 reads:
"It is of universal application in the sense that the choice of law which it lays down may result in the law of a state not party to the Convention being applied … By way of example, under Article 3 parties to a contract may opt for the law of a third state, and, in the absence of any choice, that same law may be applied to the contract under Articles 4 and 5 if it is with that state that the contract has the closest links".
I return to the case of the French and German companies contracting for the erection of a plant in Nigeria. They therefore confirm my submission that, if the contract is universal, it is universal in a special and limited sense in that it enables the law of other countries to be brought in, not that it requires the convention to be applied to all contracts, whoever
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they are made by and however little they have to do with the EC.
I strongly suggest to the Committee, and I hope that the noble and learned Lord will agree, that we are free to make it clear that the convention is not to apply generally outside the European Community. One may ask, what interest could there conceivably be in our European partners requiring us to give it a wider interpretation? If one asked any French or German lawyer, surely he would say, "Oh no, of course it is only to apply within the EC to European contracts".
I am glad that my noble and learned friend Lord Goff of Chieveley is now here because I believe that he will confirm that point. I should have great doubts whether the foreign professors who negotiated the convention had any idea of the universal, international jurisidiction of our Commercial Court. One may be fairly certain that if they were told about it they would say, "Oh, we didn't realise that. We don't wish to interfere with the jurisdiction of the Commercial Court. It must apply whatever rules it sees fit. The convention is not meant to constrain it". They have no interest in interfering. What Community interest is there in laying down the law which our Commercial Court or arbitrators are to apply to a contract between an Indian company and a New York company?
I do not ask anything radical in my amendment. It seeks to resolve what is obviously an ambiguity in the convention and the Bill and to specify that the convention and the Bill are concerned with EC contracts. If the noble and learned Lord is unable to accept my argument as to our obligations under the treaty, I most earnestly request him to take further advice, to consult the Law Officers or the Treaty Department at the Foreign Office to see what the extent of our obligation is. Only if we are compelled to do this by our international obligations should we override what I suggest are substantial practical and constitutional objections to the wider application.
Perhaps I may say a few words about the terms of my amendment. They must be refined. I put them down so as to raise the point and I did not wish to trouble the Committee at this stage with details as to the formulation. I have spoken generally about European contracts. The amendment refers to "habitual residence" and to,
"central administration in a Contracting State".
Those words are taken from Article 4(2) of the convention. I do not vouch for them in any way. They may be capable of improvement or expansion, particularly to deal with a case in which there is more than one place of business. That is the kind of principle involved and there is no difficulty, with good will, in making them more precise. There will probably have to be a definition of the words "Contracting State" and it may be that the Long Title to the Bill will have to be amended in due course. I am perfectly content to leave all that to the noble and learned Lord's department, offering my co-operation if it is desired.
I apologise for having taken rather a long time, but I hope that on those grounds the Committee will give my amendment favourable consideration. I beg to move.
4.15 p.m.
Lord Goff of Chieveley: Perhaps I may add a few words to support what my noble and learned friend Lord Wilberforce has said. I understand from Professor Peter North, whom I consulted about the issue, that he understands the scope of the convention to be very wide; in other words, that we should have to apply it in the courts of this country in disputes as between parties both of which had their domicile or habitual residence in countries outside the European Community.
That proposal would raise considerable difficulties in this country. We have in London the Commercial Court which is truly international in character and to which litigants from overseas frequently have resort. I had the honour to preside over that court between 1979 and 1981. In one of those two years, in every case that was heard by the court, either one or both parties came from overseas. That is a most remarkable fact, but the same must be substantially, if not exactly, true of every year in the Commercial Court, certainly in the past 15 years or so.
In a sense, we should not be surprised by that. It is a symptom of the enormous importance of the City of London in world commerce. All the commodity trades are centred in London, world shipping is dominated by London and the Baltic Exchange, the P & I Clubs, Lloyd's Underwriters, Lloyd's Register of Shipping and many other organisations are based here. Most insurance throughout the world ends up in London. More commercial arbitrations are held in London every year than in the rest of Europe put together. Likewise, and for much the same reasons, the Commercial Court has an international clientele quite unlike any other court in Europe.
It therefore follows that, if the convention is given the broad scope for which Professor North has contended, it will have a far greater impact in this country than in any other European country. From what I have been able to gather, it may well be that our European friends and lawyer colleagues do not fully appreciate the impact which it would have on commercial litigation in this country. Perhaps I may add that, if it will have a significant impact on the courts, its impact will be far greater on advisory work which solicitors and barristers in London have to undertake on behalf of their foreign clients. I refer particularly to the large commercial firms in the City which advise clients from all over the world on the governing law applicable to their contracts. The matter may therefore affect the jurisdiction of the court in some cases because there are cases in which the court's jurisdiction depends upon the relevant contract being governed by English law.
It is right to say that the convention has basically adopted the common law test for ascertaining the system of law which governs a contract, but the simple fact is that in certain significant respects it is not the same as our law. It therefore follows that any competent lawyer approaching any particular case must if the convention applies turn away from our law to the new law under the convention and in due course will have to have regard to the decisions of the European Court of Justice as and when they occur.
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I have little doubt that our customers in the Commercial Court from the world outside Europe, especially those in the United States of America and the developed Commonwealth countries, will be startled if that is the scope of the convention. They will ask why England of all countries should apply a European test to contracts between parties, both of whom come from outside Europe.
I must confess that I was startled when I discovered that that was said to be the scope of the convention. As far as I am aware, there has been no real criticism of that part of the common law which lays down a test for the choice of the governing law of a contract. So far as I know, it is accepted throughout the whole common law world under which between a quarter and a third of the world's population live. All that is set out in the work of Dicey and Morris, The Conflict of Laws, which is the prince of legal textbooks and is used throughout the common law world.
Had it been left to me, I could never have proposed or recommended that change if it had been placed before me as a matter for consideration. As I understand the position, I imagine that the trouble is that this country has ratified the convention. It may well be that that has been done for good policy reasons, but it may be that we are now imprisoned within the terms of the convention. I do not know; that is something beyond my ken. However, I respectfully support and agree with all that my noble and learned friend Lord Wilberforce has said. I support his amendment and if it is possible to clarify the convention in the way that he recommends, I support that proposal.
The Lord Chancellor: I am grateful to my noble and learned friends Lord Wilberforce and Lord Goff of Chieveley for having taken part in the debate on this amendment. I do so in the knowledge that they speak with great expertise on this subject. The first time that I had the honour to appear as a Scottish counsel in an English appeal was in the field of international private law and my noble and learned friend Lord Wilberforce was sitting. I therefore learned something about this subject at his feet and a very important subject it is.
There are two questions to be asked. First, what is the meaning of the convention? Secondly, if the convention has the general meaning applying to all international private law questions which may arise in this country, ought we to give effect to it? The position is that the convention was signed a considerable time ago but it has not yet been ratified. The purpose of the Bill is to enable us to ratify it.
Lord Wilberforce: I hope that the noble and learned Lord will forgive me for interrupting him. I know that that statement was made on the previous occasion. In front of me I have the Command Paper which brings the convention before us. On the face of it, it states that the convention has been ratified by Her Majesty's Government. That is a Command Paper dated 1982. I do not know whether there is some confusion but that Command Paper says that the convention has been ratified.
The Lord Chancellor: I did not have responsibility in relation to this matter in 1982, but my understanding is that if it was ratified in 1982 we have left it for a very long time before bringing it into effect. I understand that the convention was signed but has not yet been ratified. The purpose of the Bill is to enable that ratification to take place. The Command Paper says that:
"The convention has now been ratified by the United Kingdom".
If it has been ratified by the United Kingdom, in a sense the position is more difficult. My understanding was that this Bill was brought forward to enable us to ratify the convention and bring it into law in the United Kingdom.
Lord Mishcon: I hesitate to intervene but I wonder whether it is possible sensibly to continue this debate on the amendment until we know whether or not it has been ratified.
The Lord Chancellor: My information is that the printing to which my noble and learned friend Lord Wilberforce has drawn attention is a misprint. It should have said that it:
"has not been ratified by the United Kingdom".
So that is the 1982 situation. I think I must be right about that. As I understand it, it is quite impossible in good faith to ratify a convention and give it the force of law in the United Kingdom unless one is in a position to make it the law. My noble and learned friend pointed out with a good deal of clarity that this is not in accordance with the present law of the United Kingdom and therefore it would not be possible for the United Kingdom properly to ratify the convention.
Lord Wilberforce: I did not want to interrupt the noble and learned Lord. I wanted but to be succinct.
The Lord Chancellor: The purpose of the Bill is to enable us properly to bring the law of the United Kingdom into line with the convention —to give the convention the force of law in the United Kingdom.
As I said, the first question is to ask whether the convention has the meaning that my noble and learned friend Lord Wilberforce attaches to it. As my noble and learned friend Lord Goff of Chieveley said, the chief negotiator on the convention for the United Kingdom was Dr. Peter North. His understanding is that this convention is intended to provide a rule of law in the field of international private law which will apply whether or not the contract in question has connection with the European Community in any sense.
I shall deal with this matter briefly. My first point is that Article 1(1), which concerns the scope of the convention, states:
"The rules of this Convention shall apply to contractual obligations in any situation involving a choice between the laws of different countries".
On the face of it that clause gives the rules of the convention a universal application where a choice is required between the laws of different countries. As my noble and learned friend Lord Wilberforce pointed out Article 2 states:
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"Any law specified by this Convention shall be applied whether or not it is the law of a contracting state".
The comment of the Official Report is that it is universal in the sense that it refers to all law. As regards scope, Article 1 makes clear that, subject to disapplications (to which I need not refer), the rules of the convention apply to contractual obligations in any situation involving a choice between the laws of different countries.
Perhaps the most significant point is that in the convention there is no clause on the lines of what my noble and learned friend proposes in Amendment No. 2, which would be necessary if the convention were to have a limited scope because the scope of the proposals would require to be defined.
The Official Report states on page 7:
"From the very beginning of its work the Group has professed itself to be in favour of uniform rules which would apply not only to the national or member states and to persons domiciled or resident within the Community but also to the nationals of third states and to persons domiciled or resident therein".
Perhaps I may refer to the textbook writers. The standard textbook of Dicey and Morris states on page 1251 that:
"the Convention requires the application of its rules even as regards contracts with a non-EEC element, and its rules will therefore apply to all contracts with a foreign element coming before the English courts".
My understanding is that the member states of the Community which drew up their own convention —I take that as the leading one—intended it to be a convention setting out the rules of international private law in this context of contractual obligations which would apply generally. If that is right, the only question is whether or not we should put this convention into force in our law. The option to do what my noble and learned friend suggests is in fact not open.
So far as concerns foreign litigants coming to the commercial court and so on, the situation is dealt with as follows. As both my noble and learned friends said, and particularly my noble and learned friend Lord Goff of Chieveley remarked on it, what the negotiators were able to do —and for this we are extremely grateful to Dr. Peter North and those associated with him —was to bring colleagues in Europe to accept the principles of our international private law rules.
My noble and learned friend Lord Wilberforce read out Rule 180 from Dicey. I think I am right in saying that the two parts of that rule are given effect in the freedom of choice clauses of Article 3 and Part 1 of Article 4, dealing with the applicable law in the absence of choice. I accept that to some extent in the convention there has been a detailed working out of these principles which would not be entirely in accordance with some decisions in this country. On the other hand, the fact that the principles of the law applied in this very difficult area have been our principles is a matter of considerable importance. I therefore believe that if the convention is accepted —as I believe that in the interest of comity in Europe it ought to be —the result in the end will be very like the result that we have at present.
My noble and learned friend did not deal particularly with the later conventions on the

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protocol. I therefore shall not trouble the Committee with that.
On the constitutional point, if the convention regulates this area of the law, the right way to give effect to it must be to give the convention the force of law in the United Kingdom. If we were doing something over and above what the convention required, it would be open to us to use our own language to do that. But it would cause tremendous confusion to legislate the convention, insofar as it was to apply here, in language that was different from the convention itself if we wished the convention to have the force of law in this country.
The second point arises only if I am wrong in the proper construction of the convention, with which I have dealt. It is obviously a very important question. However, hitherto I had the impression that the general result of consultation either favoured the convention or saw no objections to it. The convention was sent out for consultation in 1979. The result of the consultation was summarised in 1981 in this way: that with the exception of Dr. Francis Mann —and that is a quite considerable exception in my judgment because Dr. Francis Mann is a very experienced and distingushed lawyer in this area —all those that have been consulted now either favour the convention or at any rate see no objections. It was in consequence of that that the convention was signed in December 1981.
Since then I have not heard any suggestions that the Commercial Court opposed the ratification of the convention. It was concerned about the possibility of delays in cases as a result of reference to the European Court of Justice. We have sought to deal with that in the protocol. But we certainly did not understand that the committee was opposed to the convention being applied.
I entirely accept that the situation is one of importance. I am certainly willing to consider the matter further, and in particular to invite further advice fron the Foreign Office, as my noble and learned friend has suggested. However, the Bill has been put forward on the basis that it would be appropriate now to ratify the convention and to bring the law in the convention into force in the United Kingdom.
4.30 p.m.
Lord Wilberforce: Perhaps I may briefly reply to the noble and learned Lord, with thanks for the way in which he dealt with the matter. I shall not comment on most of the points except to say this. I have read a great many papers and files, although not so many as the noble and learned Lord has in his department. Although there has certainly been consultation, it has not focused on the question of whether the convention has what I call the universal effect or the limited effect; it has focused on the question of reference to the European Court. Finally, the protocol was evolved in the way that it was—with objections not entirely met, and the British point of view not entirely satisfied —that being the main purpose of the consultation.
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I agree, and my noble and learned friend made it clear, that it is the opinion of Dr. Peter North that the convention should have universal effect. One would expect that. He has done a great deal of work. He is an enthusiast. He wants the convention to have the widest possible effect. With respect, I take a different view. I suggest that there is nothing in the convention —having given it the best consideration that I can —which compels us to give it universal effect. That is the whole point.
We are now faced with the difficulty that we do not know whether or not it has been ratified. My argument was put on the basis that we had ratified, and having ratified, we come under a good faith obligation to pass legislation to bring the convention into our law. But we are still not obliged to go further than the convention does. Therefore, if I am right in my construction of the convention, there is nothing that obliges us to give it universal effect, and we should not do so.
However, since there seems to be some doubt on that point, and on the question of whether or not it has been ratified, I very much welcome the noble and learned Lord's offer to take advice on the question of what we are bound to, what is the extent of our international obligation, in the hope that we would not go further than our international obligations compel us to do without very careful thought and perhaps further reference to this Chamber. On that basis, I am willing not to proceed with the amendment at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 [Interpretation of Conventions]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 3:
Page 2, line 10, at beginning insert—
["Any relevant published comment on the provisions of the Conventions which appears to be by an expert may be considered in ascertaining the meaning or effect of any provision of the Conventions; and, without prejudice to the generality of the foregoing").
The noble and learned Lord said: My Lords, Clause 3(3) has already been referred to by my noble and learned friend Lord Wilberforce and by my noble and learned friend the Lord Chancellor. It provides that in ascertaining the meaning and effect of the convention the court may have regard to a report made by the two named professors, one Italian and one French. At Second Reading, I used that somewhat as a peg to argue and urge that our courts should have regard to comments by the Law Commission on Law Commission Bills that it prepared. The amendment is directed to a slightly different point.
The report of the two professors was referred to by the noble and learned Lord the Lord Advocate at Second Reading as if it were what is known in the international law as preparatory work. I am not sure that that is altogether an accurate description in this case. The professors' report was certainly amended and discussed by the signatories of the convention.
I desire to say only this. Insofar as English courts decline, generally speaking, to look at preparatory work—that which lies behind an Act of Parliament —they do so in the interests of economy of material.
I venture to agree with what was said recently by my noble and learned friend the Lord Chancellor, that it is unacceptable and undesirable that English courts in particular should look at Hansard. In theory and principle it is unjustified, and the American experience suggests that it is an extremely wasteful and inconclusive exercise.
The amendment does something slightly different. The clause provides that the court may look at the professors' report; but there is a principle of English law of interpretation, and, I believe of Scottish law, which is generally expressed in Latin. I imagine that in Scotland it is invariably expressed in Latin. It means that if one expressly includes one thing one will be taken as excluding everything else. If that principle is applicable, it means that the courts may look only at the professors' report and may not look at other comments, for example, by Dicey and Morris, however valuable they might be.
With my noble and learned friend Lord Wilberforce, I tabled an amendment to make it clear that other comments may be looked at if they seem to be by experts whose comments would be of value. It is only permissive. I am by no means wedded to the drafting, and if my noble and learned friend would like the draftsmen to have a go at improving it, I should be only too willing. In the meantime, I beg to move.
Lord Mishcon: Perhaps I may briefly speak on the amendment, which I support. On Second Reading I asked, in all innocence, whether it was by way of a precedent that we were inserting into an Act of Parliament a report which might be considered on interpretation with its named authors, to whom one wished length of days but who indeed might disappear from the human scene, even though their report, upon which one was unable to question them, remained in the archives. I was suitably taught that when legislation ratifies conventions it is common for such a provision to be inserted. I learnt from that lesson and I shall not repeat the point on the amendment.
Where I respectfully agree with the noble and learned Lord, Lord Simon, is in regard to the wording of Clause 3 which is so specific as to the matters of interpretation which can be and should be taken into account. Clause 3(1) deals strictly with the point that,
"Any question as to the meaning or effect of any provision of the Conventions shall, if not referred to the European Court in accordance with the Brussels Protocol, be determined" —
there it is set out, excluding, one would think, the interpretation rule to which the noble and learned Lord gave expression—
"in accordance with the principles laid down by, and any relevant decision of, the European Court".
In other words, any other court ruling on interpretation is presumably excluded by Clause 3(1).
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Clause 3(2) provides:
"Judicial notice shall be taken" —
and it is mandatory—
"of any decision of, or expression of opinion by, the European Court on any such question".
Again, it seems to exclude other matters, jurisdictions and courts.
When we look at Clause 3(3) the report to which we have previously referred
"may be considered"—
this is permissive—
"in ascertaining the meaning or effect of any provision of that Convention".
If one therefore takes Clause 3 on the setting down of the rules of interpretation of the conventions, and to whom one should look for judgments on that interpretation, it seems at first sight to be exclusive; and therefore something similar to the amendment moved by the noble and learned Lord, so that one can introduce other expert opinions as matters which might be considered, would seem to be a right amendment.
Lord Wilberforce: I support the amendment, for the reasons that have been given. As the noble Lord, Lord Mishcon, has pointed out, Clause 3(1) is in extremely strong terms, and appears to preclude reference to decisions of this place. One can refer only to relevant decisions of the European Court. That is a strong argument in favour of my main submission on the effect of the convention. I support the principle of the amendment basically for the reason which it is probably improper to voice, but which I voice nevertheless, that in any case most courts would refer to any relevant material, and so it is much better to legitimise it in the form of a clause in the Bill.
4.45 p.m.
The Lord Chancellor: I entirely support the last observation of my noble and learned friend Lord Wilberforce about the desirability of courts being prepared, within reason, to look at any relevant material. I welcome the opportunity to look at the academic writers' views on topics with which we are concerned when sitting judicially. However, I doubt whether it is wise to seek, as it were, to legitimise that practice in the Bill because to do so would suggest that it was in relation only to the subject matter of the Bill that that was proper.
I must disagree with the construction that has been put on Clause 3. The clause directs attention to matters which might not ordinarily be taken into account by a court. It is not the intention and, with great respect, I do not believe that it is a consequence that requires to be drawn from Clause 3, that the Court of Appeal would not have regard to a decision of this place relevant to the matter. This place deciding the matter would, if it had to do so under the Bill, require to take account of the principles laid down by, and any relevant decision of, the European Court. The idea of course is to maintain coherence between the different legal systems. It is no good bringing legal systems together and then allowing

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them to part because the courts are then apart on the central principles.
The doctrine contained in Clause 3 is special to that convention and is designed not to restrict but to enlarge the matters that must be taken into account, with particular effect of course with regard to the decisions of the European Court on the question. Subsection (2) enables that to be done without any proof of the European Court's decision. Subsection (3) is designed to enable account to be taken of that report and, as has been said, that is in accordance with the usual provision which is exemplified in Section 3(3) of the Civil Jurisdiction and Judgements Act 1982 where the Official Journal referable to the Brussels Convention, is taken into account.
Lord Mishcon: Perhaps the noble and learned Lord will bear with me. As I said, I was taught on Second Reading and I am more than happy to be taught in Committee. However, he referred to Clause 3(1) as not excluding a judgment of the Court of Appeal or the House of Lords but said that when the Court of Appeal or the House of Lords adjudicates upon a matter, that court should have and, indeed, must have the relevant decisions of the European Court and the principles laid down by it as its guide.
I was trying to ask —and possibly asking it badly —whether that means (and this really goes back to the first amendment of the noble and learned Lord, Lord Wilberforce) that the court could not and should not take into account any of the decisions to be found in Dicey or of the House of Lords or the Court of Appeal with the comments of Dicey upon them. Does it not mean that the courts would have to exclude all those from their deliberations and merely look at the decisions of the European Court and the principles laid down by that court?
The Lord Chancellor: The precise guidance which could be taken out of pre-Act decisions would be a matter of close consideration. For example, when the Sale of Goods Act codified the law on the sale of goods, it did not completely nullify the effect of previous decisions as decisions of utility in ascertaining how the words of the Sale of Goods Act should be applied, because generally speaking that Act proceeded on the basis of the principles laid down in those authorities.
The point about this convention is that due to the negotiating skills of Dr. Peter North and those associated with him, the principles of the English conflict rules in relation to contract have been adopted. Therefore, illumination of those principles in previous decisions might well be useful in the application of those principles, following the convention, to a particular case. In my submission, there is nothing in the provisions of Clause 3 which would in any way prevent a court in this country from using properly any material which it had available to it. The only purpose of Clause 3 is to make sure that the material which the European Court would use is before the court in this country and also that where the European Court has given a judgment upon the clause, the principles which it has enunciated should be followed.
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As I said, I entirely agree with the proposition that the court should be prepared, within reason, to look at helpful opinions from those expert in the field, and I think particularly in this context at the views of academic writers in the field. However, I believe that to be the general law in this country and I do not believe that Clause 3 in any way detracts from that. Therefore, even without the amendment of my noble and learned friend Lord Simon of Glaisdale, I believe that the result will be the same and that there is damage to be done by putting this provision into this very special Bill. The Bill has a fairly narrow subject matter, although it is important as my noble friends have said. These are general matters and are best left in generality. I hope that in the light of my explanation my noble and learned friend Lord Simon of Glaisdale will feel able to withdraw the amendment.
Lord Simon of Glaisdale: My noble and learned friend really only advanced one argument against this amendment; namely, that if we put this provision into the Bill it may cast doubt on its absence from other Bills. So far as I know, there is only one other Bill which invokes a report in this way and that was the one referred to by my noble and learned friend just now.
There is no question of casting doubt on another Act of Parliament. It is a general provision of English and Scottish interpretation that if you identify one matter, you will be taken as excluding others. I believe that is reinforced by what my noble and learned friend has just said because there is nothing, as he says, to prevent the English courts looking beyond what is laid down by the Luxembourg court. A court will be particularly likely to do that on a matter of interpretation because matters of interpretation in private international law fall to be decided by the law of the forum. That will reinforce the inclination to apply the universal rule applied to every Act of Parliament that if we identify one thing, we will be taken as excluding the other.
Of course, it would be ridiculous to press this to a Division. All I can do is to ask my noble and learned friend if he will reconsider the matter and weigh, for what they are worth, the arguments put forward by other Members of the Committee. Perhaps we can return to the matter on Report. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 [Revision of Conventions etc.]:
[Amendment No. 4 not moved.]
Clause 4 agreed to.
Clauses 5 to 9 agreed to.
Schedule 1 [The Rome Convention]:
Lord Wilberforce Lord Wilberforce moved Amendment No. 5:
Page 4, line 5, at beginning insert —
("The High Contracting Parties to the Treaty establishing the European Economic Community,
Anxious to continue in the field of private international law the work of unification of law which has already been done

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within the Community, in particular in the field of jurisdiction and enforcement of judgments,
Wishing to establish uniform rules concerning the law applicable to contractual obligations,
Have agreed as follows:").
The noble and learned Lord said: I do not propose to press this amendment. I only tabled it as a convenient means of bringing the text to the attention of the Committee. I am quite willing to leave it to the noble and learned Lord as to whether he wishes to refer in full to the convention and also to the other conventions or whether he is willing to economise by leaving it out. I am willing to leave that to the good sense of the noble and learned Lord.
The Lord Chancellor: When this Bill was drafted the advice which I received was that the matters which were to become a force of law should be printed and not the preamble. However, having considered the matter in the light of my noble and learned friend's amendment, I believe that there is something to be said for putting in the preamble. If we do that for the Rome Convention, we should want to do it for the others. Therefore, if my noble and learned friend will leave the matter with me, I shall consider bringing forward an amendment upon Report to put in the preambles in respect of all the documents.
I have now had a chance to study the paper of 1982. I believe that on studying that paper it is fairly plain that there is no suggestion within it that the convention has been ratified. It is all about signatories. I believe that that justifies my initial suggestion that the word on the outside was a misprint and should have been "not" rather than "now". I understand that is the position.
Lord Wilberforce: I am much obliged to the noble and learned Lord. He may care to note also that in 1982 the precedent was observed of putting in the preamble. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
Schedule 2 agreed to.
Schedule 3 [The Brussels Protocol]:
On Question, Whether Schedule 3 shall be the third schedule to the Bill?
Lord Wilberforce: I have a small point on Schedule 3 which I think is non-controversial. On page 13, at line 47, I believe the Greek to be incorrect. I do not wish to give what I think is the correct Greek because it would embarrass the writers of Hansard, but I believe those words to be incorrect. I am willing to leave it to the classicists in the noble and learned Lord's department to correct them. I say very quickly that it should be ta avwtata Aikaampta.
The Lord Chancellor: I am extremely grateful to my noble and learned friend.
Schedule 3 agreed to.
Remaining schedule agreed to.
House resumed: Bill reported without amendment.

Pensions (Miscellaneous Provisions) Bill
5 p.m.
The Earl of Caithness: My Lords, I beg to move that the Bill be now read a second time.
This Bill is the first Bill since 1975 to make changes to the existing statutory framework for public service superannuation provided by the Pensions (Increase) Act 1971 and the Superannuation Act 1972. The present system of public service superannuation has worked well since then and major changes are not needed. Nevertheless, we need to keep the system up to date and to make minor adaptations and alterations to meet new requirements and changed circumstances. We have to make such changes now to meet our EC obligations regarding equal treatment in occupational pension schemes and this Bill provides an opportunity for us to make other essentially detailed and technical changes to the statutory framework.
Until the 1970s the rules of public service superannuation schemes were generally contained in primary legislation and public service pensions were increased to compensate for inflation on an ad hoc basis by various Pensions (Increase) Acts passed between 1920 and 1969. The system was changed in 1971. In that year, the Pensions (Increase) Act provided for regular increases in public service pensions by statutory instrument. The Act was amended in 1972 and 1974 to lower the minimum qualifying age for pensions increase from 60 to 55 and to provide for all pensions paid to widows of scheme members to be increased. In 1975 the system was adapted by the Social Security Pensions Act to integrate public service and state pensions increase arrangements and allow for contracting-out by public service pension schemes.
In 1972 the Superannuation Act provided for the local government, teachers' and NHS schemes to be contained in regulations and gave the Minister for the Civil Service (now the Treasury) power to make, maintain and administer Civil Service pension schemes. No major changes to this Act have been made since then but similar provisions were made for the police pension scheme by the Police Pensions Act 1976.
The Bill is essential in order to meet the requirements of an EC directive on equal treatment in occupational pension schemes. Most schemes have traditionally operated on the now outdated assumption that women are dependants, and that men are breadwinners. The Bill provides for men and women pensioners to be treated the same so far as concerns the increase of their pensions under the Pensions (Increase) Act. The Bill also makes some other minor changes to the legislative framework for public service pensions. It does not make major amendments to the existing law and the Government see no reason to make any such changes at this time. That is because there is no longer any need to use primary legislation to amend the rules of most public service pension schemes. Regulations made under the relevant statutes can make most of the changes to scheme rules which we may want or need.

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We also consider the existing statutory arrangements for public service superannuation to be generally satisfactory. That does not mean that there will not be individual grievances about pension schemes, the benefits they provide and how they are administered. That is inevitable; everyone would always like higher benefits; and we should all like to pay less for them. But we cannot settle these matters by changing the system. And public service pensioners also have the greater opportunities, which this Government have made available to occupational pensioners generally, to make personal pension provision or to pay additional voluntary contributions. There is less need, therefore, to make general improvements to public service pension schemes.
The days of large and technically detailed superannuation Acts are therefore long past. But this does not mean there will never be a need to legislate. From time to time there will be a need to update the statutory framework. This Bill fulfils that more modest ambition in three ways. First, it will rectify a few anomalies and minor unintended consequences of the law which have emerged since the early 'seventies. Secondly, it will make some small but nonetheless desirable amendments to the statutory framework, including some minor changes occasioned by the wider scope for making additional voluntary contributions introduced by public service schemes following the Social Security Act 1986. Thirdly, it will extend the powers of the Secretary of State in relation to the determination of employers' contributions in the teachers' and NHS schemes and the payment of injury benefits to teachers.
As I am sure the House will appreciate, many of the clauses are complex and technical. There will be an opportunity for detailed discussions in Committee. Today I shall briefly sketch the effect of each clause and the reasons behind the Bill. But I should begin with a general comment. The Bill does not alter the provisions of any pension scheme or whether a pension is paid. The provisions of the schemes concerned are given in the rules made under the Superannuation Act and those rules, not the Pensions (Increase) Act or the Social Security Pensions Act, determine whether a pension is paid.
Clause 1 is the main clause in the Bill. Public service pensions are increased to compensate for inflation provided certain qualifying conditions are satisfied and this clause amends those conditions. There are three separate changes. First, the clause provides for the phasing out from 1st January 1993 of a condition under which retired female scheme members with dependent children qualify for pensions increase even if they are below the normal qualifying age of 55. This concession does not apply to male pensioners and the proposed change is needed to comply with EC Directive 86/378 which requires member states to introduce equal treatment for men and women into occupational pension schemes. This provision is very rarely used. We know of only eight women who benefit in the centrally administered pension schemes for which data is available.
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However, if the provision were applied to men, the picture would be very different. It is thought that approximately 7,000 police pensions would have to be increased, and the cost in the long run would be about £14 million per annum at today's pension levels. In the armed forces if analogous arrangements were made for those schemes it is thought possible that some 50,000 pensions would have to be increased at a long-run cost of about £100 million per annum at today's pension levels. The Government do not consider that it would be appropriate to make a major extension of this kind to the conditions for pensions increase. We must therefore repeal the relevant provision to introduce equal treatment into the Pensions (Increase) Act. The Bill does this but ensures that the accrued rights relating to service rendered before 1st January 1993 of the very few current and future female pensioners who benefit from this provision are fully protected.
Secondly, the clause provides for all pensions paid to survivors of scheme members to be increased in line with prices. At present, widows' and children's pensions are increased but pensions paid to widowers and other adult dependants are only increased if the survivor is over 55 or physically or mentally incapacitated or, if a woman, has a dependent child. Most public service schemes have now aligned their rules on widowers' pensions with their rules on widows' pensions and it is appropriate therefore that widowers' pensions should now be increased under the same conditions that apply to widows' pensions. The clause also provides for the very few adult dependants' pensions not currently increased to be increased irrespective of the pensioner's age or state of health.
I should stress that these provisions will affect very few women and men receiving or expecting to receive public service pensions. No one will lose any accrued rights. There is little extension of existing provisions. This is a practical, cost-effective and reasonable solution to the problem of equal treatment and the requirements of the EC directive.
Thirdly, two minor extensions have been made to the conditions under which injury benefits paid by pension schemes are increased to ensure that pensions increase in these cases is covered by the Pensions (Increase) Act.
Clauses 2, 3 and 10 make changes to the Acts to rectify some problems which have emerged since the early 1970s. Clause 2 amends the Pensions (Increase) Act 1971 to make the law on two small technical aspects of pensions increase what it was always thought to have been since 1965. Clause 3 amends the Pensions (Increase) Act to end a provision which gives rise to extremely small payments to pensioners but with a disproportionate administrative burden for scheme arrangements. Clause 10 amends part of the Superannuation Act 1972 to clarify the protection given to re-employed scheme members if changes which are potentially detrimental to them are made to regulations for the local government, teachers and NHS schemes.
Clause 4 enables the Secretary of State to make regulations for the teachers' and NHS schemes under which the costs of pensions increase may be

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recovered from employers through the contributions which they already pay towards the cost of basic benefits. Employees' contributions will not be affected.
Clause 5 amends a provision in the Social Security Pensions Act 1975 under which some widows have had part of their pensions unintentionally indexed by both the public service pension scheme and by SERPS.
Clauses 7, 8 and 9 make some minor technical amendments connected with the wider scope for making additional voluntary contributions introduced following the Social Security Act 1986. Clause 7 makes sure money purchase benefits arising from additional voluntary contributions paid by scheme members are not indexed by public service pension schemes. Clause 8 relieves certain schemes of a responsibility to pay annuities purchased by scheme members where the scheme member himself has chosen the company which will provide the annuity. Clause 9 brings money purchase pension schemes for civil servants within the scope of the existing arrangements for agreeing amendments to civil service pension schemes which may adversely affect the accrued rights of scheme members or nensioners.
Clause 11 allows the Secretary of State to make regulations under which injury benefits can be paid to teachers by their employers. This clause also allows existing arrangements made by some local education authorities to continue until such time as any regulations are made.
That concludes the majority of what is in the Bill. I should just add that in Committee the House will also have to consider a small number of technical drafting amendments which the Government will table shortly. It is almost inevitable that legislation on superannuation, even enabling legislation such as the existing law, is detailed and highly technical. The House will be performing a useful role by helping to dot the "i"s and cross the "t"s during its passage.
The Bill is almost wholly concerned with making minor, largely technical, adjustments to the existing legislative framework governing public service pension schemes. That framework has stood the test of time very well but we need now to make sure that it can continue to do so in the future. This short Bill will do that and I commend it to the House.
Moved, That the Bill be now read a second time. —(The Earl of Caithness.)
5.14 p.m.
Baroness Turner of Camden: My Lords, I thank the Minister for the way in which he introduced the Bill. At first sight it looks very uncontroversial. It is about public service pensions and such schemes have a record of leading the way in pension provision for employees. Public sector pensions, for example, are index-linked in payment, as the Minister indicated. The private occupational pension sector is still far from achieving that desirable objective. I believe that in 50 years' time, perhaps even sooner, our successors will not understand how we could tolerate a situation in which the worth of a pension steadily declined from the day it started payment. We shall
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have an opportunity of debating that issue when the Social Security Bill is before your Lordships in the near future. I will therefore say no more about it at this stage.
The present Bill is said to be necessary because of the demands of the equality provisions which are being made in the EC. No one objects to that and, indeed, I very much welcome any steps in that direction because I believe completely in equality in pension provision. I welcome the proposals in that regard which are contained in the Bill.
One of the problems, as I see it, in looking at the government propositions is that in one specific area there seems to have been a tendency to level down rather than up. If one sex has an advantage, however minor, over the other the situation is remedied by doing away with that small advantage. That is what we appear to have in the Bill when we look at the abolition of the pension increases hitherto available for retired women under the age of 55 with dependent children. As was explained, this is not currently available to men and therefore the intention, in the name of equality, is that this should go altogether.
We heard this afternoon that there are very few women in that position, and I welcome the assurance that those who are are apparently to have full protection. I was very surprised to hear from the Minister that extending this arrangement to men would be too costly an exercise and cover very many men. I had intended to ask precisely what the situation was in that regard because ideally when there is an advantage with one sex I should like to see it extended to the other as a way of achieving equality. However, I note what the Minister said about the very large number of men affected if we extend that provision to men as well as to women. Perhaps we can explore that a little further in Committee.
I am informed by the local government pensions advisers that they expressed particular concern about Clause 10 of the Bill. As I understand it, it restricts the cases in which re-employed members of the local government superannuation scheme and the national health superannuation scheme may claim that regulations which are detrimental to them should not apply. I am informed that this change effectively nullifies most of the advantages previously conferred on such persons under the Superannuation Act 1972. The effect of the clause is to apply such advantages only to previous service. I am informed that there was no consultation at all about that although the mechanism for such consultation exists.
In this House we have repeatedly referred to demographic changes which will result in a declining labour force, particularly affecting those with skills and experience. The current need is for greater involvement of older people. It seems illogical to impede the re-employment of skilled persons who can best be employed in jobs in which their previous skills and experience could be useful.
The treatment of employees under Clause 10 is contrasted with that of civil servants under Clause 9. Under that clause any alterations to a money purchase pension scheme can only be made with the

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consent of the representatives of those civil servants affected. In Clause 10, however, an existing right is removed without the consent of the representatives concerned, the employees or, as I understand it, even the employers. I should be grateful if the Minister could explain the reasons for that. On the surface it appears rather unsatisfactory.
I should like to make a brief reference to Clause 7 of the Bill which amends Section 8 of the Pensions (Increase) Act 1971 to exclude any money purchase benefits from the definition of "pensions" which may be increased under the Act. I understand the reasons for this clause. The point I should like to make is that the Government appear to be encouraging the growth of money purchase schemes, which are calculated not by reference to salary and years of service but simply by reference to the performance of the investments made on the member's behalf. The member thus has no real way of knowing what the ultimate pension will be, unlike salary related benefits.
I do not think that money purchase schemes should be encouraged in the way that the Government have done. Neither do I think —I have said so before in other contexts in this House —that they should encourage personal pension schemes. I hope that there will be very few people in public sector schemes who opt for personal pensions since the occupational schemes that they are currently covered by are very much better than anything they are likely to get by way of a personal pensions route.
I am glad to say that during the 1970s there was a switch away from money purchase schemes largely, I believe, as a result of union pressure and that pressure was to some extent led by the public sector unions. There was a switch over to final salary schemes. I still think that the final salary scheme, based on years worked and related to salary at the point of retirement, is really the best way of making pension provision for employees.
As regards teachers' pensions, I am advised by both the NUT and the Assistant Masters and Mistresses Association, that there has been no consultation by the appropriate procedures on the provisions of this Bill. I should like to ask the Minister about that and why that is so, if that is actually the case. The AMMA makes the point that Clause 4(1) contains provisions for charging the cost of pension increases to employers' contributions which they maintain must only be activated as part of a set of changes agreed with the teachers' trade unions. The NUT says that both teachers and local authorities have long been dissatisfied with the present notional funding arrangements of the teachers' superannuation scheme. That dissatisfaction centres principally on the inadequate rate of investment return provided under the present arrangements.
As I understand it, in the past two years there have been discussions within the teachers' superannuation working party on a reform of those issues. The deliberations of the working party have centred around two particular ponts: first, identifying a means of ensuring realistic returns on
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future excesses of income over expenditure and, secondly, arriving at a method of determining the initial fund which takes account of the views of the three parties concerned. The third element of the proposed packet of changes from the working party is that the cost of pension increases, which is currently a direct charge on the Exchequer, should be charged to the teachers' superannuation scheme. I am advised that this extra financial burden could be carried by a larger notional fund enjoying better returns. I would like to have the Minister's comments on that.
I believe that all these matters are currently under consultation and discussion. The teachers' unions are anxious that decisions on this Bill should not pre-empt the outcome of these consultations and discussions. I ask the Minister: what is the current position and how is it intended further to proceed? Having said that, there are many aspects of this Bill which are to be welcomed. I hope that public sector schemes will continue to lead the way in the pensions field by setting standards to which the rest of the pensions industry should look for guidance in the future.
5.23 p.m.
Lord Rochester: My Lords, from these Benches I join in thanking the noble Earl, Lord Caithness, for the clear way in which he has introduced this Bill. The matters with which it deals are in some respects complicated and I am certainly not expert in them. However, it is plain that the main provisions are in Clause 1 and that many of the other clauses are concerned merely with matters of a technical nature or designed to tidy up existing legislation.
Therefore, it is on Clause 1 that I propose to concentrate most of my few remarks. As has been said, the clause provides for the phasing out from 1st January 1993 of the present arrangement under which retired women members of public service pension schemes who have dependent children, qualify for a pension increase if they are below the age of 55. It also ensures that accrued rights relating to service before 1st January 1993 are protected. Because the present provisions do not apply to men, we are told that the proposed change is needed to comply with the relevant EC directive requiring member states to introduce equal treatment for men and women into occupational pension schemes.
It is further claimed that very few women qualify for a pension increase under present conditions in this country —I believe the noble Earl mentioned that there were only eight to his knowledge —but if those conditions were applied to men, that would mean that the pensions of thousands of people in the police and armed forces' schemes would have to be increased. The Government do not consider that it would be appropriate to make such a major change because it would involve giving pension increases to men retiring at a comparatively young age who are then able to enjoy second careers.
The Minister said that it would also result in unacceptably high expenditure amounting, I think he said —and perhaps he will confirm this —to £100 million a year after 20 years. In this case I am

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prepared to accept that argument and, largely for the same reason, along with my noble friends, to express my agreement that the Bill should be given a Second Reading. Nevertheless, we must recognise that the elimination of discrimination, removing the benefits now enjoyed by women, amounts (the noble Baroness, Lady Turner, has said as much) to a levelling down rather than a levelling up.
Therefore, in accepting the proposal in this case it should not be thought that the Government will have our agreement if they seek to use this Bill in any way as a precedent for further legislation stemming from EC directives and covering other aspects of social policy. In that connection I would like to take this opportunity to remind the House of one of the conclusions in the report of your Lordships' European Communities' Committee on Equal Treatment for Men and Women in Pensions and Other Benefits. In initiating a debate on that report on 27th July last, the noble Lord, Lord Allen of Abbeydale, whom I am glad to see in his place, said in the Official Report at col. 1579,
"there should be a decade of retirement where both men and women can choose their retirement age between 60 and 70. A pivotal age of 63 should be chosen. Those retiring at 63 would receive the equivalent of the current rate of full pension. Those retiring earlier would receive a smaller pension and those retiring later a larger one".
At that time my noble friend Lady Seear supported the principle of flexibility in retirement but recognised that the pivotal age was a matter for discussion; and that there was a need for careful consideration before a decision was finally taken having regard to the expenditure that the country could afford. Part of the Government's response to that debate was that equalising at the age of 63 would add substantial extra cost to the large sums already spent on state pensions and that a decade of retirement might also add significant complication to pension arrangements.
I take this opportunity to urge that, in the matter of equality of pension benefit, any inclination on the part of the Government to level down by fixing the pivotal age in that case as high as 65 should at least be balanced by an increase in the level of the basic state pension. I say that for the simple reason that in my view pensioners deserve to receive a fair share of this country's wealth.
The only other clause of the Bill on which I wish to speak is Clause 4. It enables the Secretary of State to make regulations providing for employers to meet the cost of pensions' increases in the teachers' and NHS superannuation schemes. At present this cost is met by the Treasury. I am concerned about two aspects of this matter. First, there have been numerous recent examples of the Government introducing enabling legislation under which they are empowered to make far reaching changes subsequently by regulation. Local authorities are already wondering how on earth they are to meet their existing financial commitments without being capped for levying excessive amounts of poll tax. If such fundamental changes as the clause envisages are now to be made to the financing of public service pensions through the transfer of ultimate responsibility for funding to local authorities, I
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should like to know why those changes, once their content is known, should not be incorporated in primary legislation which can be adequately debated, and if necessary amended, rather than being subject only to the negative resolution procedure.
Secondly, I understand that although the working party on the funding of the teachers' superannuation scheme has reached agreement on how the scheme can be credited with sufficient funds to meet its future commitments, no agreement has yet been reached on the means by which the scheme could be compensated for past deficiencies in funding. The noble Baroness also had something to say on this point. I understand that on that account the working party sought a year ago to have an urgent meeting with the Secretary of State to discuss the problem; but as yet no such meeting has been held. Will the Minister give an assurance that before the relevant regulations are introduced there will be adequate consultation with all the interests concerned?
5.32 p.m.
The Earl of Caithness: My Lords, I am grateful for the reception given by both the noble Baroness, Lady Turner of Camden, and the noble Lord, Lord Rochester, to this modest, but I am sure the House would agree, complex Bill. I look forward to discussing the details in Committee.
Perhaps I may take up some of the points that were raised. Both the noble Baroness and the noble Lord paid particular attention to Clause 1. This was not surprising as I said that it was the main clause of the Bill. They were concerned about levelling up as against levelling down. It is on the one hand the case that we have identified so far a maximum of eight women against a potential of the male side of a further 57,000 who might have to come into consideration if we levelled up. That would involve public expenditure of more than £110 million when fully costed up. I was therefore grateful for the acceptance of our argument by the noble Lord that we should in this instance level down. I can confirm to the noble Baroness what I said earlier about the existing benefits for women.
The noble Lord, Lord Rochester, also asked about equalising pension ages. As he said, we have been over this course before. I can confirm that the Government recognise the arguments for equalisation of pension ages. As he indicated, there are a great many complex issues to consider. The demographic factors and the long-term economic and financial implications of any change for individuals, employees and the state are but a few of the difficult considerations.
When I looked into the matter, I was interested in the question of pivotal age. The noble Lord mentioned a pivotal age of 63. It is interesting to see what happens in the rest of Europe. There seems to be a common pension age in some countries. In Denmark, it is 67; in France, it is 60. A few countries have a common pension age of 65. A few have different pension ages. In Italy, the pension age for men is 60 and for women it is 65, so there is quite a diversity in Europe.
Lord Allen of Abberdale: My Lords, did the noble Earl give the pension ages for Italy the right way round? I had understood the pension age for men to be 65 and for women 60. I think he said it the other way.
The Earl of Caithness: My Lords, in Italy the pension age for men is 60 and for women it is 55.
Lord Allen of Abbeydale: My Lords, I think the noble Earl said 65.
The Earl of Caithness: My Lords, I apologise if I said 65. I am therefore even more grateful to the noble Lord, Lord Allen of Abbeydale, for intervening and allowing me to correct the impression I gave to the House.
The noble Baroness put next in her batting order of concern Clause 10. Perhaps I may elucidate. Clause 10 amends Section 12 to put the re-employed scheme member in the same position as a scheme member who has left but not rejoined only in respect of the pension entitlement he has accrued at the end of periods of service completed before re-employment. The re-employed scheme member is placed in the same position by this amendment as another employee who is serving for the first time in respect of his pension entitlement currently being accrued or which may be accrued by future service. The noble Baroness read into Clause 10 a little more than we are doing. I shall read in the Official Report what she said and write to her if I did not cover that point fully. The noble Baroness then contrasted Clauses 9 and 10. Clause 9 does not confer a new right on civil servants. It extends the right which already exists in relation to salary related pension benefits.
On Clause 7, the noble Baroness was concerned about the Government not planning to index money purchased benefits. It would not be appropriate for the pension scheme to index money purchased benefits. The annuity purchased by the scheme member with the proceeds of additional voluntary contributions depends on the terms which the annuity provider is prepared to offer the scheme member. Annuity providers can offer partially or fully indexed annuities and scheme members can purchase such annuities if they wish to do so. The noble Baroness will be pleased to hear that added years will continue to be indexed.
Both the noble Baroness and the noble Lord were concerned about consultations regarding Clause 4. I can reassure the House that there will be full consultations with staff and employers before the power is used. As the noble Lord will know, we are required to do that by Section 9 of the Superannuation Act, and we shall fulfil our obligation under that Act.
I am grateful to the noble Baroness and to the noble Lord for their contributions. If I have missed any points I shall take them up between now and Committee stage. The Bill adapts and improves a good system, which has worked well for nearly 20 years, to meet the needs of the 1990s. It is fair to pensioners and current employees. It is fair to the taxpayer. I am convinced it is a reasonable and
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realistic response to the problems of equal treatment. On that basis, I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Gaming (Amendment) Bill [H.L.]
5.40 p.m.
Lord Allen of Abbeydale: My Lords, I beg to move that this Bill be now read a second time.
I should begin my speech by saying that I am still a director of a leisure company but that there is no question of any financial interest arising. Indeed, the main purpose of the Bill is to tighten up the control of the Gaming Board over the operation of casinos. In the main it deals with issues which were under consideration when I was chairman of that board and which have now, at last, come to fruition.
When Parliament legalised casino gaming in this country in 1960 it unfortunately provided no effective machinery of control. Although it is difficult to remember it now, there were at that time over 1,000 casinos in this country, with some very strange procedures for relieving the customer of his money. I refer to such practices as treble zeros on the roulette tables. There were also alarming indications of criminal undesirables moving into the area.
The Gaming Act 1968 provided drastic remedies. In particular it set up the Gaming Board and armed it with appropriate powers and under my predecessor, Sir Stanley Raymond, the first chairman of the board, the number of casinos was drastically reduced to about 120 and strict standards were applied. During my eight years as chairman we were constantly in the courts, with some success, and can claim, I think, to have secured an industry with a high reputation for fair dealing.
I was somewhat involved in the preparation of the 1968 Act. Therefore, I am only too conscious that to a large extent we were venturing into the unknown. On the whole it worked surprisingly well but, as might be expected, although the main framework remains intact, it has shown some signs of fraying at the edges. Account has also been taken of the findings of the Royal Commission on Gambling under the chairmanship of the noble Lord, Lord Rothschild.
A few amendments to the 1968 Act have already been made. The Bill before us is aimed at meeting one or two of the additional problems which experience has brought to light. I think that the legislation will commend itself to the noble Lord, Lord Renton, in that its first clause—and, indeed, the only clause of substance —is by way of being a purpose provision. The detailed provisions are all set out in the schedule.
There are four main proposals. The most important of these—and I shall come straight to this point —is the third one which is summarised in Clause 1(c). Under the 1968 Act the grant of a casino licence is a matter for the justices, but no one can apply for a licence unless he first holds a certificate of consent from the Gaming Board. That particular

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requirement, which provides the board with an opportunity of vetting those who want to run casinos, has been crucial to what has been achieved in keeping criminal elements out of casino gaming in this country.
In deciding whether to issue a certificate of consent, the board must have regard to many matters. It seems to me that I should spell out the principal ones.
First, there is the question of whether the applicant is likely to be capable of, and diligent in, securing that the provisions of the Act, and of any regulations made under it, will be complied with; secondly, that gaming on the premises will be fairly and properly conducted; and, thirdly, that the premises will be conducted without disorder or disturbance. To that end the board is then directed, in particular, to take into consideration the character, reputation and financial standing of the applicant and also of any other person who may benefit from the licence. Those requirements are all set out in the second schedule to the 1968 Act, and between them they add up to a pretty formidable list.
Under the Act the Board has power to revoke its certificate of consent if the conduct of the premises is being effectively controlled by a person other than the holder of the certificate. But this is where we run into a difficulty. If the holder of the certificate is a company and control of that company passes into other hands, the board has no power to intervene since there has been no change, technically, in the whole of the certificate. The holder's legal identity is still the same. The board may have doubts about the new individuals who control the company and consider that at the very least there ought to be some inquiry into them, but it has no authority to do anything of the kind.
The same problem arises if the balance of power in the parent company of a corporate licence holder changes hands. The board will have looked at the parent company when considering the original application as a person for whose benefit the club will be carried on; but there is no power for the board to intervene if the legal identity of the parent company remains unchanged, whatever it may think about the individuals then in charge.
The problem is not just hypothetical. It has, I fear, happened that in this way effective control of a casino on more than one occasion has passed into the hands of persons who, in the board's view, ought to have been scrutinised. The Royal Commission accepted that there was a problem in this respect which ought to be remedied. However, there are some difficulties about the solution it suggested. It involved the board taking the initiative and therefore picking and choosing among the companies concerned. After much thought and consultation, the best course seems to be that set out in the Bill. It provides for an automatic procedure.
The Bill proposes that where a person becomes a controller of a body corporate which holds a certificate of consent, that body corporate must apply to the board for continuance of the certificate; and a person becomes a controller if he, either alone or with associates, controls 15 per cent. of the voting
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power —a definition lifted from banking legislation. When an application is made, the board will then consider whether the certificate of consent should remain in force and will apply the criteria to which I referred earlier.
Coupled with that main provision in the Bill, filling as it does a gap in the present control of casino gaming, is the fourth objective set out in the first clause. There is already provision in the 1968 Act requiring a licence-holding body to notify the board of changes in the directors. This Bill would add a provision requiring the notification of changes in shareholding so as to assist the board in identifying possible new controllers of casino companies. The effect of paragraph 6 of the schedule is that the board will receive a copy of any notification made under the Companies Act of a shareholding of 5 per cent. or more; and, as I understand it, that percentage is soon to be reduced to 3 per cent.
Those are the main provisions of the Bill. However, the opportunity is being taken to bring up to date provisions contained in the 1968 Act about gaming club records, especially cheque transactions. Althought the existing regulations about keeping records have, in general, been observed, it is not all that much use to a Gaming Board inspector visiting a casino in the North-West if he finds when he arrives there that the records are kept at the company's headquarters in London. It is of even less use if those records are kept on a computer with no print-out available at the casino. The Bill provides that records or copies must be kept on the premises or be accessible from those premises and that they can be made available to be taken away in a legible form by an inspector or by the police.
Lastly, there are proposals to deal with fees and remove an anomaly which has always niggled me. At present there is no fee payable to the Gaming Board for the issue of a certificate of consent. But it may well be that the applicant who is turned down is rejected only after painstaking and expensive inquiries. It seems wrong that he should pay nothing and the Royal Commission agreed. The proposal in the Bill is the simple one of providing for a standard fee to be payable on application for a certificate of consent. This part of the Bill, unlike those parts on changes of ownership, would apply to applications relating to bingo clubs, but it is not calculated to cause any concern to those responsible for that industry.
If the Bill is given a Second Reading, I propose at a later stage to put down two highly technical amendments designed to take account of some minor differences in the statute law relating to Scotland. I hope by that stage to have understood the technical difficulties. The proposals in the Bill represent modest but, I think, highly desirable changes. If we are to have a casino industry at all, it is right to do what we can to ensure that it is as honest and efficient as possible. The powers sought in the Bill would help to that end and I commend it to your Lordships. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read a second time. —(Lord Allen of Abbeydale.)
5.52 p.m.
Baroness Ewart-Biggs: My Lords, perhaps I may first say how much I appreciate the occasions on which it is for me to respond from this Front Bench to propositions put forward by the noble Lord, Lord Allen. I always welcome these opportunities for two reasons. The first is that the noble Lord, Lord Allen, always presents his propositions with such clarity that I am able to comprehend what they are. Secondly, I have every anticipation of being in agreement with his objectives. In the case of the Gaming (Amendment) Bill, I certainly agree with the objectives that he has in mind. I am most grateful for his clear presentation.
I agree that the primary purpose of the Bill is welcome. It is to extend the powers of the Gaming Board to vet a company which holds a licence permitting casino gambling. As I understand it, as the law stands at present under the 1968 Act, a gaming company could be taken over by undesirable elements without the board being empowered to intervene. As the noble Lord, Lord Allen, pointed out, a hazardous situation could possibly arise here.
The Bill aims to prevent such a situation arising and it therefore serves to plug a loophole which has existed ever since the 1968 Act came onto the statute book. I understand that this was pointed out at the time, and frequently since then. As I understand it, the new procedure will only apply to casinos. However, one of the other amendments which relates to the keeping and production of records in connection with gaming club premises licensed under the 1968 Act will also apply to bingo clubs. That is the only change for them.
I am also happy to know that the provisions of the Bill have been discussed fully with the British Casino Association, which has made it clear that it is in agreement with and, I understand welcomes, the provisions. I also believe that the Bingo Association of Great Britain has made no objection to the parts which affect its clients.
I did not hear him say this, so perhaps I may ask the noble Lord whether the changes put forward in the Bill are in line with the recommendations made by the Royal Commission chaired by the noble Lord, Lord Rothschild, or whether they are slightly at variance. With the advent of the 1990s, in particular the changes that will come about as from 1992, casinos may well come under new pressures. There will be new arrivals from the Continent and elsewhere and therefore this preventive measure will be timely in order to safeguard such a vulnerable and delicate area of our national life. Therefore it seems desirable to take this course at this time. The noble Lord, Lord Allen, has made clear the role of the management of a casino. It would be highly desirable to make sure that the person running the casino at that time should be the person deserving to have the licence.
Finally, perhaps I may make one more point. Even during my relatively brief period of speaking on home affairs from these Benches, I know that this is the third gaming amendment Bill to come before the House. In January 1986 we had the first Bill with regard to the use of cheques, as the noble Lord,
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Lord Allen, said. There was another Bill in January 1987 —it always seems to happen at the beginning of the year —about the extension of hours during which casinos could open. Now, in February 1990, we move on to the third Bill on licences.
I wish to ask the Minister how long he feels this piecemeal reform of our gaming laws will continue. Does he not believe that the time has come to review the 1968 Act? That Act was passed a long time ago and there have been a number of changes in our social life in regard to gaming. It worries me that changes in such a sensitive area should be treated by a series of Private Members' Bills rather than the Government developing a comprehensive policy to counter the adverse consequences of gaming. Having worked out what has changed in the intervening period, the Government should be able to fashion new legislation accordingly. I can see that that will not happen at present. In the meantime I am happy to support the Bill so ably put forward by the noble Lord, Lord Allen, this evening.
6 p.m.
Earl Ferrers: My Lords, I agree with the noble Baroness, Lady Ewart-Biggs, that the House will be grateful to the noble Lord, Lord Allen of Abbeydale, for the clarity with which he introduced the Bill and for explaining exactly what it intends. I noted that the noble Baroness was happy to be in agreement with him; I share that contentment.
I thought that it might be helpful if I were to indicate the Government's attitude to the Bill. I am glad to be able to confirm to your Lordships that the Government wholeheartedly support the Bill. The noble Baroness, Lady Ewart-Biggs, asked how long we would stick with this piecemeal legislation. I know that she will be aware of the great effect that the 1968 Act had on gambling and gaming. It has been found appropriate to patch up one or two of the loopholes. I do not think that means that there should be a root and branch alteration of the gaming laws. This is yet another small but useful Bill which seeks to close a loophole. The noble Lord, Lord Allen of Abbeydale, said that the principal provision of the Bill, which is defined in paragraph 5 of the schedule, is to close a worrying loophole in the Gaming Act 1968. By that loophole a person may acquire a significant interest in a company which holds a licence for a casino without that person ever having to go through the usual vetting procedures in order to determine his trustworthiness.
As the noble Lord, Lord Allen, will know only too well, as he was Permanent Under-Secretary of State in the Home Office at the time that the 1968 Act was introduced, it proceeds on the principle that no one can claim a right to provide commercial gaming. It is a privilege which is to be conceded subject to the most searching scrutiny.
The task of vetting applicants for gaming licences is assigned to the Gaming Board. Only if the board is satisfied that the applicant is likely to be both capable and diligent in securing compliance with the Act will it issue a certificate consenting to the application for a licence.

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The transfer of a casino licence involves the same vetting procedure. If a person other than the holder of the certificate of consent is in control of the casino or of the gaming, the Gaming Board may revoke the certificate of consent. This has the effect of shutting down the casino in question, and the licence automatically falls. The successful operation of this system of certificates of consent and licences is the foundation of the probity of gaming in this country.
As the noble Lord, Lord Allen of Abbeydale, has explained, there is nevertheless a loophole in the system which makes it possible for new controllers of a company to hide behind the corporate veil of the company and to escape the scrutiny of the Gaming Board. This loophole could be exploited by undesirable elements in order to acquire control of a casino through the back door. The noble Lord, Lord Allen, will know better than any of us not only from his experience as Permanent Under-Secretary of State at the Home Office but also from his many distinguished years as chairman of the Gaming Board, that we cannot afford to underestimate the ingenuity of criminal elements who cover the rich rewards which may be made from hard gaming in this country.
The noble Lord has described the position which existed before the controls, which are contained in the 1968 Act, were in place. This Bill seeks to remove this loophole in the Act and thereby to uphold the principle that only those persons of suitable character and reputation should be in a position to provide commercial gaming in this country.
The procedure by which this objective is achieved, as was clearly set out before us by the noble Lord, Lord Allen of Abbeydale, strikes me as being a very tidy one, and I must congratulate the noble Lord on the situation which he has put forward.
In effect, by these provisions, the Gaming Board will be enabled to look beneath the corporate veil of the company to see whether there have been any real changes of control, and who is now in fact running the company. It is eminently reasonable for a company, which has come under new control, to submit to such examination, and it should cast no slur on its reputation. All such changes, whether for good or ill, will fall to be examined in this way. I know that the Gaming Board welcomes the proposals wholeheartedly and that these proposals have the backing of the industry which is properly concerned to prevent the entry of criminal elements into gaming.
The noble Lord has also clearly and fully set out the other principal provisions in this Bill, and I do not propose to go over that ground again. I shall confine myself to saying that they all represent useful developments in the law on gaming. Some, such as the provisions of fees, affect bingo clubs as well as casinos. None are in any way detrimental to either industry.
The Bill provides for a necessary extension of the Gaming Board's powers. It has been welcomed by both the industry and the Gaming Board; and to this I can add the endorsement and full support of the Government. I wish the noble Lord, Lord Allen every success with it.
6.5 p.m.
Lord Allen of Abbeydale: My Lords, I am much obliged for the reception which the Bill has received both from the Government and from the Opposition. I should add however a few words of personal explanation. As the noble Earl said, I was the Permanent Under-Secretary of State at the Home Office at the time the 1968 Act was going through Parliament. I cannot claim to have taken a detailed part in every piece of legislation that the Home Office promoted at that time. However, I was upset by what was happening in this area in the 1960s and therefore I became quite closely involved personally in the matter and I visited several casinos. I believe I can claim to be the only Permanent Under-Secretary of State to have been served with orange juice by a Bunny girl at two o'clock in the morning.
As regards the legislation in general, I go along with the noble Earl when he said that there is no occasion for a root and branch revision of the 1968 Act. The main framework of that Act has stood up very well. However, I believe there is a case for considering at an appropriate time a consolidation measure which might bring together the results of the various bits of tinkering which have been made to that Act as the years have gone by.
I believe the only question that the noble Baroness asked concerned the relevance of what the Bill suggests to the recommendations of the Royal Commission. There were two proposals. One concerned the application for a certificate of consent. The Royal Commission went along in principle with the desirability of doing something but it favoured a procedure whereby the board would pick out the cases where it thought further inquiry was necessary. That was a rather invidious procedure. It seems much better to have a purely automatic procedure in which all concerned come before the board without a procedure having been started off which, as it were, raises an air of suspicion about the company which is subject to investigation and questioning.
The other proposal concerned the payment of fees for a certificate of consent. There again the Royal Commission went along with that in principle but it proposed a rather complicated procedure. I believe it considered that the costs of the investigation should be paid up to a maximum of £200, if the inquiries were limited to this country, and that inquiries abroad would have to be separately costed and the applicants would have to be asked whether they would pay the extra costs of such inquiries. That appears to be somewhat complicated. I believe that in the interests of simplicity and straightforward operation the proposal in the Bill is preferable. I beg to move.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Ambulance Service Dispute
6.8 p.m.
Lord Stallard Lord Stallard rose to ask Her Majesty's Government what steps they propose to take to resolve the current dispute in the ambulance service.
The noble Lord said: My Lords, my Unstarred Question asks what proposals the Government have to resolve this dispute which is now in its 23rd week. The dispute is now approaching six months' duration. Clearly there is widespread sympathy and support for the ambulance staff's claim. A recent poll found that 85 per cent. of the general public support the ambulance men and women and that only 6 per cent. support the Government stance. Some 4.6 million supporters signed a petition. That was a record number of signatures for such a petition and I understand that that statistic is soon to be included in the Guinness Book of Records.
Most informed and professional staff in the National Health Service also support the ambulance men and women's claim for more money, yet the Government who are effectively running this dispute in everyone's eyes refuse to intervene to bring it to an end. What is the current situation? There are two elements of the current claim still outstanding. The first is the claim for a pay mechanism that would maintain the value of ambulance staff earnings. The staff's preferred option is for a mechanism like the fire and police pay formula. Union negotiators have repeatedly said on that point that they are prepared to negotiate almost any other pay mechanism that would lift the ambulance service out of the annual scramble and disruption. The second outstanding element of the claim is for an increase of 11·4 per cent. in the hourly rate.
The pay of ambulance staff has been deteriorating in relation to earnings throughout the economy, and more particularly in relation to the other emergency services, since 1975. At that time the ambulance staff's earnings were about 7 per cent. above the average for all male workers. By 1978 they were 3 per cent. below the average, a decrease of 10 per cent. The Clegg award restored the position and earnings rose to approximately 3 per cent. above the average. Since then the position has deteriorated dramatically. By 1988 ambulance staff's earnings were 16 per cent. below the average male worker's pay. In that context, therefore, the initial claim for 11·4 per cent. is not unjustified or excessive.
Nevertheless the unions have indicated that they are prepared to negotiate on that 11·14 per cent. and if necessary to lower their sights. However, clearly —and in the view of millions of people throughout the country —in the light of all the circumstances, 6·5 per cent. is unacceptable. The offer of 9 per cent. over 18 months is much the same as 6·5 per cent. over 12 months. It only sounds better, and probably satisfied some government supporters. It fooled nobody else.
The unions have always been prepared to discuss enhanced pay rates for those with extra training. However, the fact that overtime is paid at standard rates remains a major grievance. Extra training needs additional resources. Those resources have never been forthcoming from the Government. There is a dire lack of training in some areas of the ambulance service.
In addition, last November, in order to facilitate negotiations, the unions dropped several other key
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points from their April 1989 claim. Those points included an increase in the stand-by allowance, an increase in annual leave, a reduction in the working week and the introduction of long service pay. Those were all elements of the original claim and legitimate elements of any pay claim. The unions dropped those points in the hope of facilitating negotiations. I believe that that is a perfectly reasonable thing to do, having had a great deal of experience of trade union negotiations. I see nothing unreasonable in it. On the contrary, I believe that throughout the period to which I have referred the trade union side has been very responsible and amenable.
What is the Government's position? Speaking in the Opposition debate on the ambulance dispute in another place on 11th January the Secretary of State for Health said that he had three points to make. The first was that the claim was excessive and not justified by comparison with other health service staff who had not taken industrial action.
Perhaps I may mention a few more figures in relation to that point. I apologise for quoting so many figures but they are important when talking about wages. At the moment ambulance staff receive £7,340 on entry, rising to £10,093 on qualification. The management's offer, with government approval, would raise the pay of a recruit to £8,000 and that of a qualified worker to £11,000. However, across the health service as a whole there have been many different settlements. The public sector pay awards announced on 1st February last will give doctors, nurses, midwives and others a 7 per cent. increase in April 1990. That is to be staggered so that in January next year increases will average 9 per cent. for nurses and midwives, 9·5 per cent. for hospital doctors and 11·5 per cent. for family doctors. I also understand that the chief executive himself is to receive an annual increase at that time of £4,750, which represents more than half the total annual pay of an ambulance recruit if the claim is settled.
With inflation running at above 7 per cent., is a claim above 6·5 per cent. excessive? There are millions of people in the country who think not. That was before the dramatic increase in mortgages and in other prices. Many people would agree with me that it is not, as the Secretary of State said, excessive.
A Daily Telegraph opinion poll on 7th February found that 71 per cent. of National Health Service staff thought that the offer made to ambulance staff should be increased. A mere 16 per cent. did not. How did the Secretary of State reach the conclusion that other National Health Service staff are opposed to the ambulance claim? That is just not true. All of the polls and petitions have proved that.
The Government have also argued that the ambulance service is not an emergency service. The Secretary of State's remarks about the vast majority of crews being no more than professional drivers is so contemptible that it does not merit serious consideration. The fact is that 70 per cent. of ambulance staff are on emergency duties. In my view an emergency service is one which answers emergency calls. The ambulance service answers more emergency calls than the police and fire service

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together. That is not to denigrate either of those two great services in any way.
If I needed any further support for that point I could quote a letter, which has been quoted before, dated August 1978 from the office of the right honourable Mrs. Margaret Thatcher, MP. The letter is in reply to one received from a trade union. It reads:
"In all the comments she made during the Fireman's strike, Mrs. Thatcher linked her remarks not just to the firemen but to what she, and you, call 'the Emergency services'. All three deserve to have their pay negotiation put outside the arena of industrial dispute by being given firm and automatic linkage to national price or wage rises. Mrs. Thatcher agrees with you about this".
The letter is signed:
"Matthew Parris, Private Office of the Leader of the Opposition".
That is quite hefty support. I do not know what has changed or whether the Prime Minister is still of the same view. However, we have not heard her speak on the issue for a long time.
The Secretary of State's second point was that the management's offer is fair and generous and should be accepted. I think that I have done enough to show why I believe that it is unfair and far from generous. Even so, a further small comparison with the other emergency services underlines the point. At present an ambulance recruit receives £8,000, rising to £11,000. A fireman receives £11,505 on entry rising to £13,180 and eventually to £13,763. On entry a policeman receives £10,587, rising to £12,756 and ultimately to £16,521. I do not believe that anyone can deny on the basis of those figures and the work of the emergency services —I shall not go into the tremendous work that they do daily, and more particularly in national incidents —that the ambulance service is not underpaid.
The Secretary of State has said that it is not his place to intervene. It was he who decided and announced that no more money was available. That is intervention. He said that quite clearly and has repeated it and made other statements which may be construed in any negotiations as being interfering. He said that the £6 million to be spent on ambulance men's pay is fair and reasonable, but in the view of millions of people the Government's offer is clearly unfair and is certainly not generous.
We are bound to ask for how long the Government intend to ignore public opinion, if nothing else. What other government would ignore the opinion of millions of people? One could have expected the support to have dwindled, but public support is now as strong as it was in the first week and in some areas even stronger. The ambulance men could not have been sustained otherwise. Does that count for nothing in the eyes of the people who are supposed to be running the dispute for the Government?
The Secretary of State said that there was no more money available, but he has made available millions of pounds to prolong the dispute. Parliamentary Questions in another place have elicited the information that the basic rate charged by the police for ambulance duties is £16.60 per hour in the West Midlands and £16.20 in London. Overtime rates range between £25 and £35 an hour. That does not include vehicle, administration or pension costs.
Those are the basic charges for the service. A qualified ambulance man or woman earns £4.96 per hour and no overtime premium. How can one say that that is generous, excessive and unjustifiable? The facts do not bear that out.
Up to two weeks ago the Government had spent an estimated £20 million —that is an underestimate —on police and army costs in the dispute. That is £10 million more than would have been needed to meet the union claim in full. Surely that is madness, not management. No one can justify that course of action.
We understand that, in addition, £241,000 of public money has been spent on an advertising campaign to inform the staff of the management's offer. That is a gross misuse of public funds. A total of 22,000 staff have had to be informed at a cost of £241,000. That works out at £10·90 per head. That money could have purchased, for example, 12,000 defibrillators which are not currently supplied by the NHS, although I understood that they were part of the ambulance equipment and were supplied by the NHS, funded by the Government. However, they are currently obtained through charity work undertaken by ambulance staff in their own time. That is how they obtain their defibrillators. The advertising campaign cost £10·90 per head. On a per capita basis, that must surely be the most expensive campaign on any issue. I suggest that it is one more for the Guinness Book of Records.
The Secretary of State's third point in the debate was that industrial action organised and taken by the unions concerned is against the interests of patients and patient services. There is an element of truth in that argument. It would be impossible to take any kind of action that did not affect patients and patient services. However, we must look deeper into the matter because the truth is that the unions and their members would prefer not to be in that position. They have offered many alternatives. That is why they have kept their legitimate protest action to a minimum and have continued to answer emergency calls, despite wildcat management and government action to prevent them from doing so. The Secretary of State called in the police and the army and continues to pursue that course of action even though those services are quite inadequate for the task, although the people concerned are doing their best in the circumstances.
The chairman of the metropolitan branch of the Police Federation said:
"At the end of the day apart from being totally unqualified to run an efficient service, we are using vehicles which really any self-respecting prisoner would complain about, let alone a patient".
He said that they have a standing instruction not to convey people with head injuries in police vehicles, yet that is what they are doing. The vehicles are not designed for that purpose; they are designed to carry goods, not people. If the money is there, he asked, why cannot it be used to solve the dispute? That is a perfectly reasonable question from a perfectly reasonable man. I echo his statement.
It is clearly not in the patient's interests to have a protracted dispute when the Government have it in their power to take constructive steps to end it. The

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Secretary of State should be prepared to meet the union negotiators face to face. There is no point in television or radio broadcasts and press comment. He should meet the negotiators face to face. If there is a disagreement, they should proceed to arbitration. Before someone tells me that there is no room for arbitration, I should point out that it has been said to me before in this Chamber that there is no arbitration procedure under the Whitley Council. That is not true; I checked it. There must be some discussion about the arbitration procedure. Section 21 of Appendix 1 of the revised main constitution of January 1984 sets out the procedure that could be followed to permit arbitration even under the Whitley Council.
No case has therefore been made out as to why the Government have refused the unions' repeated demands and requests for arbitration and to accept the results of arbitration. Neither I nor anyone in the trade union movement can understand that. So far as I know, there is no other example of a case in which an employer has refused in those circumstances, after 23 weeks, to accept unbinding arbitration. That must be another record.
The case is justifiable. It is not excessive. Given that the unions are prepared to negotiate and to go to binding arbitration if necessary, I suggest that that is what the Government should do.
6.27 p.m.
The Earl of Longford: My Lords, my noble friend Lord Stallard has made a powerful speech full of knowledge, experience and warmth. Mine is a small voice compared with his. I have few working rules in this House, but one is to support any Motion brought forward by my noble friend. That has not got me into trouble yet. No doubt it will do so one day, but not this evening. Now I come to think of it, another of my rules is never to refer to the noble Lord, Lord Boyd-Carpenter, without preparing myself to meet a formidable intervention. I do not know whether that rule will be proved right immediately. I see that it will be discarded in future.
The popularity of the ambulance men is beyond dispute. Everyone is aware of that. My noble friend Lord Stallard brought that point home to us. It is strange for me to be associated with a popular cause. I have not quite got the feel of it. People sometimes decline to support me in an enterprise because they believe that my side is likely to lose, but that is not so here.
Lord Stallard: My noble friend has backed a winner this time.
The Earl of Longford: That is right. The arguments have been set out so clearly and decisively by my noble friend Lord Stallard that I need not go over the facts again. There has been a decline in the relative position of the ambulance men. The Government have offered them a pay increase which does not keep up with inflation and therefore represents a decrease in real terms. Those facts are beyond dispute. I do not think that any fair-minded person could possibly believe that the Government were being worthy of what one expects from a British
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Government if they make no move towards the ambulance men.
In the few minutes at my disposal I should like to touch on a rather wider aspect of this Question which is perhaps controversial but nevertheless relevant. It seems that the Government call on the ambulance men —indeed, expect and demand them —to show more concern for the public interest. The Minister concerned said that industrial action in an essential industry is in any case wrong, but it seems that, speaking broadly, the Government expect the ambulance men to be more public spirited and more unselfish than others. That is the Govenment speaking with one of their voices.
But what is their attitude to the pursuit of wealth in other areas? To pursue wealth is regarded by our present rulers as a great virtue. I have not heard the Government criticise the doubling of the salary of the chairman of British Rail. A booking clerk who has to work seven days a week in order to keep going will criticise it but, so far as I know, the Government have not said that there is anything wrong about it. But what can be right about doubling the salary of the chairman of British Rail? Is it suggested that the last chairman was not quite up to the job, or that this one is so superlative that he should be paid twice the salary that anyone else would normally be paid? The argument for the pursuit of wealth which seems to appeal to the Government is the one which says: if you can get the money, then go for it and good luck to you.
I should like to deal for a moment with an article by the former Chancellor of the Exchequer which appeared last Tuesday in The Times. He is a man of brilliant gifts. I have the greatest admiration for him. When I was his tutor for a short time at Oxford he was thought to be the best philosophy student of his year. I did not teach him philosophy or economics. I taught him politics and whether he is seen as successful in that area only time and history will decide. At any rate he is a brilliant man.
Now that he is no longer the Chancellor he earns fabulous money. It led even a royal chaplain to criticise him for greed. It must be quite unusual for a former Chancellor to be criticised by a royal chaplain for greed. He has been attacked for being about to receive what most people would regard as enormous sums of money for relatively little work. I gather that he will be doing as much as some of the less active Members of this House. However, he will be paid an enormous sum.
In his article in The Times he said:
"The idea of noblesse oblige in government" —
and noble Lords may think that in this House noblesse oblige would be well regarded, but it is not highly regarded by Mr. Lawson —
"automatically creates a civil service ethos which is hostile to wealth".
So there is the idea that if any noble Lords in considering the poor and disadvantaged feel that they are greatly privileged —and that is what is usually meant by noblesse oblige—then there is about them a smell of the Civil Service and their whole attitude is inimical to wealth.

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The article goes on to say:
"If you say nobility is associated with low pay"—
and some of us in this House would think that it was —
"then it is a very easy transition to say that those who are on large salaries, those who do what they are doing for the money, are ignoble".
I would not say that they are ignoble, but the pursuit of money for money's sake can be overdone, and they are doing it for money.
To return to the ambulance workers, the Government say that they have to think of the public. Of course Mr. Lawson is not the Government, and to be fair —and possibly I anticipate something which might have occurred to the noble Baroness who is to reply to this Question —I understand that Mrs. Thatcher has renounced part of her salary. I think that she might give a few instructions in public spiritedness to the former Chancellor. However, I do not think that that was the reason why he left the Government.
At any rate, those are the two voices of the Government. On the one hand they call on the ambulance men, who are receiving less than the average wage at this present time, to restrain themselves and not to take advantage of their position. On the other hand they encourage the pursuit of wealth without restraint and the collection of whatever rewards, however vast, that come one's way. Those are the two voices that we hear. I am afraid that the second voice expresses a terrible message at this time.
We are all human. Even the Tories are human. Anyway, one cannot prove the opposite. The heading today in the Evening Standard is: "Tories Beg for Budget Boost". That is what our Tory friends are begging for; they want a Budget boost. They are thinking of their pockets. Up to a point we all think of our pockets. No one can pretend that one goes through life ignoring the need to earn one's living and the necessity to look after one's family. However, it is a question of degree and emphasis. The emphasis of the present Government is on making money by every possible means and picking up whatever rewards come one's way, however vast they may be. It is quite contradictory to any message that could possibly be of any use to settle this dispute.
6.36 p.m.
Lord Monkswell: My Lords, first I must apologise to the House for coming without any warning into the middle of this debate. I was a little late getting to the House.
The reason that I rise to take part in the debate is that I should like to say a few words about what I see as the wider implications of this dispute. I thank the noble Lord, Lord Stallard, for a very good exposition of the ambulance workers' side of the dispute and their very good case for being given what they are asking for, as well as putting the case for arbitration and some mechanism to prevent such a dispute happening again in the future. No doubt we shall hear the Government's side and their reasons why they feel that they have to stick to their position.
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I look at the dispute almost impartially, dare I say, as someone who has seen both sides of industrial dispute negotiations as an ordinary worker and a shop steward but also as a manager in industry. I have had the experience of seeing both sides. That experience tells me that usually the cause of an industrial dispute is effectively mismanagement of the situation.
I readily admit that mismanagement of the situation comes from both sides, but usually and more often it is, unfortunately, the result of bad management by the management side. In that context, when faced with a long running dispute in industry, one seeks to resolve it not by giving in to every demand that the workers or unions may make, but by seeking an agreement that is fair to both sides. I believe that one of the essentials of the British psyche, if I may put it like that, is the concept of fairness. British people do not like unfairness. That is one of the problems with which we are faced in this dispute: it appears that the Government are being unfair and that the ambulance workers are being unfairly treated.
The way out is for management effectively to take some action. That action may be in terms of changing their negotiating stance. In some situations I have known a change in personnel make a significant difference. I am trying to find some opening for the Government to use to save face, because obviously that is one of the big stumbling blocks at the moment. I agree with the noble Lord, Lord Stallard, that a change of government would probably resolve the dispute very quickly, but unfortunately it does not look as though we shall have a change of government as rapidly as the East Europeans are obtaining a change in their governments these days.
It strikes me that the Secretary of State in some respects is the managing director of the health service. The chairman of the company is obviously the Prime Minister. I am not sure that it is necessary to involve the chairman of the company. It is very rare that chairmen of companies become involved in industrial disputes. They usually leave it to the managing director to respond. However, I would hope that the Secretary of State would take a personal interest in this by meeting the other side personally. That is very important. Personal contact, personal discussions, can make an immense amount of difference in industrial disputes in understanding the thinking of the other side, to come to agreements and to change the situation.
One of the problems that unfortunately we have with the Government is their apparent lack of understanding of the industrial relations scene. We saw an immensely long and damaging dispute with the teaching profession which, curiously enough, ended up with the teachers being paid more at the end of two years than they would have settled for within a couple of months at the beginning of the dispute. The longer the dispute goes on, not only does the cost mount in terms of providing and maintaining the service, but it escalates with regard to the final solution. I implore the Government, not only for the sake of the dedicated ambulance workers but for all the people of this country, to resolve the dispute. It is in their hands to resolve it and they should take steps to do so as soon as possible.
Lord McColl of Dulwich: My Lords, before the noble Lord sits down perhaps I may ask this question. Does he not realise that there have been some benefits from this industrial dispute? What has come to light is that only 10 per cent. of the so-called emergency service is in fact emergency. What is happening is very interesting. Instead of little old ladies in Lewisham going by ambulance to Roehampton for the fitting of their artificial limb, a journey of four hours on average, they are being taken in great comfort by limousine at a fraction of the price and in half an hour. There are therefore some benefits from the dispute.
Another benefit is this. When one has any industrial action of health care workers one finds that mortality tends to fall, not rise. The attempted suicide rate also falls. Perhaps I should not tell your Lordships this, but when doctors strike, mortality falls.
Lord Monkswell: My Lords, I am grateful for the intervention. It does not surprise me that mortality falls when doctors go on strike. I have felt that they are a rather over-blown profession at the best of times; but I leave that to one side.
The point that the noble Lord mentions about the way that the ambulance service is being provided now, indicating interesting new ways of delivery, is very important. It is a hidden agenda behind the front of this dispute. But surely we do not need a long drawn out, horrendous dispute of this nature to show us ways in which services can be changed and the delivery of services improved. That should surely be a task of management anyhow.
If the Government believe that changes which may or may not be beneficial —that will depend on the negotiation and proper development of new aspects of the service —will be introduced more easily as a result of their supposedly winning the dispute, I have to advise them that that will not be the case. Effectively, if change which may be beneficial is imposed in the direction that the noble Lord suggested, that change will be beneficial only if it is done by agreement and negotiation. If it is imposed, we shall end up with more problems.
Viscount Slim: My Lords, perhaps I may intervene. I am sorry to harass the noble Lord. Many noble Lords have been on both sides of the negotiating table. It strikes me that the weakness from the ambulancemen's side stems from the fact that they are offering little or nothing. Surely we should see some approach with regard to better response time and better productivity, and higher levels of skill and training demanded by the ambulancemen. Is it not a fact that the management on the ambulance side may be good on television but not necessarily very good at negotiating.
Lord Monkswell: My Lords, I am rapidly becoming a jack-in-the-box. When I finish this time, I shall sit down and take no more interventions.
The point that the noble Lord was trying to make is that the ambulance men are not responsive to the possibility of change. My understanding is that the ambulance workers are a dedicated group of men
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and women who want to do the best they can for their patients —for the people who call on their services. I am sure that they will co-operate with management to the utmost to introduce the necessary changes that have to be made in the light of new technology and new methods of working. That is the point that I was making earlier about negotiation: agreement, enthusiastic support and encouragement by the ambulance workers will come only if the changes are introduced through a framework of negotiation. They will not come if the changes are imposed in ways that reduce the ability of ambulance workers to provide the service.
6.48 p.m.
Lord Rea: My Lords, I also apologise for not putting my name down to speak. I had thought that this Unstarred Question would be discussed at a later time when I would be unable to take part in the debate.
Perhaps I may first make a remark in response to the noble Lord, Lord McColl. I should like him to produce the figures which show that the mortality rate has gone down since the dispute. I should like him to be able to prove that that is because of the ambulance dispute.
Lord McColl of Dulwich: My Lords, I did not say that in this dispute mortality had gone down. I said that when health care workers go on strike, the tendency is for mortality to go down. I do not think that the noble Lord should be fooled by newspaper and television reports stating that because of the delay in the arrival of the ambulance of one hour Mr. So-and-So died as a result. I have gone into some of these cases and that it not so. One has a man of, say 83, there is an alleged delay of one hour, but in fact he died of pneumonia, not a heart attack as alleged. One therefore has to examine all these shroud-waving reports.
Lord Rea: My Lords, I quite agree. I would not wish to go down that line.
I wish very briefly to give noble Lords an anecdote to show that one reason why the mortality rate has not gone up is that emergency services are still being carried out by ambulance drivers, some of whom are not receiving any pay. They have been suspended. I wish to report an incident at which I was present about a month ago. I was called to see an old lady of about 80 who had fallen at home during the previous night and fractured her femur. She was in a lot of pain. An ambulance team came extremely quickly. It dealt with her very skilfully. It administered gas and air analgesia, splinted her leg, and moved her with extreme care onto the stretcher, at the same time carrying on a stream of cheerful and humorous conversation with the old lady to keep up her courage. She responded to words which were chosen exactly to suit her social background. She responded saying, "Oh thanks, that's better. You can squeeze me a bit more there, darling".
I choose that example to show that ambulance people are a dedicated group and some of them are providing services even though they are not being paid. I was able to witness professionalism in the

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entire trio. It was not just the leader of the team with the paramedical qualifications; the other two were co-operating in a skilful and sympathetic way to put the elderly lady comfortably into the ambulance. It is that type of sensitivity and skill that the ambulance service shows, and for which it has a deserved reputation, which explains why the British public are prepared to see a slightly larger slice of taxpayers' money going to equalise the pay of ambulance workers with other public service workers who are doing worthwhile and vital jobs.
6.51 p.m.
Lord Rochester: My Lords, in this short debate I am anxious to say nothing that might make it harder for a settlement of this unhappy dispute to be reached. I would go further and say respectfully that in my experience it is rarely, if ever, helpful for people without close knowledge of all the factors involved to intervene in industrial disputes. That goes for politicians such as ourselves as much as anyone else, and the course the discussion has taken tonight supports my view.
However, since the debate is taking place —I am sure that in initiating it the noble Lord, Lord Stallard, sincerely wishes the dispute to be brought to an end as soon as possible —I shall confine what little I have to say to a few observations designed to facilitate rather than hinder a settlement.
On 23rd Janaury last I asked the noble Baroness, Lady Hooper, to confirm that the Chief Executive of the NHS has proposed that the management and staff sides should undertake a joint review of the ambulance service salary structure under which no preconditions would be set. I went on to ask whether that meant, for example, that if arbitration or a review body were ruled out, at least some flexible system such as that now being introduced in parts of the Civil Service might be used in future to determine the pay of ambulance workers.
The noble Baroness said that part of the final offer which was made on 5th December included a complete review of the 1986 arrangements which aimed at maximum flexibility. On this occasion I should like to develop that theme a little. As the dispute has dragged on, attitudes on both sides have hardened. The unions are seeking a pay increase in excess of the latest offer and the promise for the future of some form of pay formula. The Government are unwilling to accept either of those claims and that refusal has been underlined by their recent decision to withdraw the automatic pay mechanism enjoyed by firefighters employed by the Ministry of Defence.
The Government are of course able to stand absolutely firm on their present position, but in my opinion they would be unwise to do so. If they do, it will be at the cost of ambulance crews eventually returning to work in bitter mood at considerable cost to the service. There is need, as I see it, for some movement on both sides. The recent suggestion made by chief ambulance officers that there should be a 16 per cent. pay increase to cover a period of two years from April 1989 to April 1991 and that the question of a pay mechanism should be left for
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future talks seems to me to provide a possible basis for further negotiation.
That the question of a pay mechanism should be left open amounts to much the same thing as Mr. Duncan Nichol's offer of a joint review of the 1986 salary structure under which there would be no preconditions. The Government thus have nothing to lose from such an agreement, and on the same point the door is not slammed in the faces of the unions. As for the immediate pay award, the Government have already authorised, as I understand it, an increase over a period of 18 months, and the extension of the period to two years would involve no surrender of principle on their part and might just be sufficient to enable the unions to recommend a return to work while negotiations proceeded. I therefore express the hope that the proposal put forward by the chief ambulance officers will be followed up.
In this brief contribution to the debate I have deliberately refrained from proffering any view on such difficult questions as to whether, when negotiations in disputes affecting emergency services result in a failure to agree, there should be resort to some form of independent arbitration, possibly matched by no-strike agreements; to what extent future pay negotiations should be conducted on a regional basis to take account of differing labour market pressures; how far a distinction should be drawn between trained paramedical staff and others, and so on. That is because in trying to solve industrial problems one has to start from where people are and not from where one thinks they should be. In what little I have seen fit to say, I have tried hard to bear that thought in mind, for in this dispute room for manoeuvre in seeking a settlement which the parties involved can accept without humiliation is small.
6.58 p.m.
Lord Ennals: My Lords, the House will be grateful to my noble friend Lord Stallard for having raised the debate on an urgent issue. He said that there is great respect, and indeed admiration, for the way in which ambulance staff do their duty and often far more than their duty. He put the ambulance workers' case fairly. In this debate we are clearly not able to produce a solution, but it gives us the opportunity, as the noble Lord, Lord Rochester, has done, to put forward some ideas for consideration and, as some of my noble friends have done, to draw attention to the disgraceful way in which the ambulance workers have been treated.
Apart from the fact that the ambulance workers have now been out for 22 weeks without any significant proposals from the Government, they have also been the victims of a campaign of distortion by the Government, and principally by the Secretary of State. He has misled the public in a number of respects. He has claimed that union leaders recommended acceptance of 6.5 per cent. before the dispute turned into industrial action. That is simply not true. The national officers clearly stated that 6.5 per cent. was the best which could be achieved without industrial action. There was no

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acceptable recommendation to make. Therefore, I believe that that is very unfair on the ambulance officers who have been representing their unions in this dispute.
As my noble friend said, there has been a distortion about the actual offer made. The offer of 9 per cent. over 18 months amounts, as my noble friend said, to 6.5 per cent. over 12 months. It is no more than that but simply looks better. London staffs are frequently presented as having been offered more than that sum. That is also not true. London weighting is added on to 6.5 per cent. so that it becomes a 9 per cent. offer to make it appear more substantial. The 18 months' time extension also makes the offer look more substantial than it is.
As my noble friend also said, as part of the distortion the Government have spent an estimated £20 million on police and army costs in the dispute. That is twice as much as would have been needed to settle the dispute. He also referred to the advertising campaign. I too wish to refer to that because I believe that it is absolutely wrong that money which should have been used for patient care or for the pay of ambulance men should be used on that excessive scale, as has been said, to inform the staff of the management offer. I believe that that was a piece of propaganda which should not have been paid for from the public purse.
We also know of lives being put at risk. I heard what the noble Lord, Lord McColl, said, but he knows that there have been substantial increases in deaths on arrival. The noble Lord shakes his head. Of course it is too early for nationwide statistics but it was revealed by Ministers in another place last week that the number of deaths on arrival had increased by 30 per cent. in South Yorkshire during the dispute. There has been an increase of 100 per cent. in Sheffield.
Lord McColl of Dulwich: It was winter-time and the mortality rate increases then.
Lord Ennals: But this was compared with other similar times. Therefore, such figures as are available suggest that there has been an increase. When the time comes no doubt the Government will give their figures to prove that that is not the case if it is not so. However, I believe that it is the case.
My noble friend Lord Stallard and other noble friends who supported him have shown that there is massive support in this country for the stand taken by the ambulance workers. The opinion poll published in the Telegraph last week showed that 85 per cent. supported the ambulance staff, with only 6 per cent. backing the Government. Ambulance workers are very highly respected, along with the police and the fire service. A few days ago the Prime Minister said that the Government had,
"a duty to others in the health service".
Interestingly, the opinion poll showed that the strongest support for the claims of the ambulance men comes from others employed in the National Health Service. According to that Gallup poll, some 82 per cent. of ancillary workers, porters and cleaners, supported the claim and said that they
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would not use a new offer to the ambulance men as a bargaining counter. The nursing staff, by seven to one, said the same. Apparently, according to that poll, the highest support for an improved offer came from those declaring themselves to be Conservative supporters. It is certainly not a party issue.
On 29th November, 12 weeks into the dispute, 15 Peers from all parties wrote to the Secretary of State asking him to take action to bring the dispute to an end either by renewed negotiations or by arbitration. They did not take sides on the dispute or put forward positive proposals as to what the settlement should be. Five weeks later Mr. Clarke replied saying that the dispute was for management and not for Ministers to decide and that the final offer had been made. We have heard before about final offers, but all the evidence is that that final offer has not been and will not be accepted. He also turned down a request of the all-party group of Peers, all with great experience of the National Health Service, to meet with him to express their concern. I must say that in my view his refusal was an act of some discourtesy.
Therefore, we reached the conclusion that if this was a matter for management, it might be helpful if we could have a meeting with Mr. Duncan Nichol, who is the National Health Service Chief Executive, together with Mr. Roger Poole and other union negotiators. They were invited to attend a meeting of Peers in your Lordships' House. Today I received a letter from Mr. Duncan Nichol in which he rejected the offer. His letter said:
"I do appreciate your concern and your offer to arrange a meeting but I have to say that at the moment I do not believe such a meeting would serve any useful purpose … It is now six weeks since I wrote to Roger Poole telling him I would be willing to hold further talks, but only if there was some indication of a significant change in position. I am still waiting for his reply and am forced to conclude that he is not willing to consider any change. In these circumstances the kind of meeting you suggest would not, I regret, take us any further down the road towards a resolution".
Perhaps such a meeting would not achieve a resolution. I do not pretend for a moment that a meeting without the privacy of negotiations could ever produce a solution.
However, what is very interesting is the reply which I received from the unions. A letter which has been approved by the five unions and endorsed by Mr. Roger Poole said that Mr. Duncan Nichol has refused further talks unless the unions revealed their precise negotiating position before a meeting was called. The unions cannot be expected to do that because they believe that it would undermine their whole bargaining process. However, they have made it clear that the figure of 11·14 per cent., which is their proposal, is not their last word. It is a negotiating gambit if the Government would only take it as the basis of talks, which of course might produce something else.
The unions have said:
"the unions are willing to negotiate because their aim is to achieve the best possible pay deal for their low paid members, not to score political points or to 'win' a victory over the Health Secretary, Mr. Kenneth Clarke".
Their attitude and that of Mr. Duncan Nichol suggests to me that there would be advantage in their meeting. Perhaps they should not meet together in

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your Lordships' House but perhaps they should meet if the Secretary of State was prepared to do so.
I am extremely critical of the way in which the Secretary of State, after 22 weeks and a clear willingness on both sides to find a basis of agreement, is simply not prepared to bring them together. I hope that one lesson which may come from the debate in this House is that the Secretary of State should be prepared to bring together the two sides. Of course management has its important role, as well as the representatives of the unions. However, it is the Secretary of State who holds the money bag. Mr. Duncan Nichol cannot move forward unless the Secretary of State gives him his approval. I believe that that is for the Secretary of State to decide.
There are other reasons to think that the time is now propitious. In the Financial Times on 13th February, Mr. David Rennie, chairman of the management side of the Whitley Council ambulance negotiating body, said that he felt confident that the recommendations made by the Select Committee to the Whitley Council that an arbitration mechanism ought to be built in was the way forward. He said that the Government had acknowledged that that should be discussed. He said:
"It is the civilised way of dealing with disputes".
I do not know whether that proposal has been put to the unions, but it seems to me that the moment has now been reached, with sensible suggestions not only from the management side but also by the Association of Chief Ambulance Officers, for the Secretary of State to intervene and to try to find the basis for a settlement and to stop the dispute. I hope that we shall hear from the Minister as to what the Government are doing to bring this dispute to an end.
7.10 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, the House is grateful to the noble Lord, Lord Stallard, for having introduced this debate and for the way in which he did so. It gives me the opportunity to pay tribute to the skilled and dedicated service of ambulance staff in caring for the sick and injured, often in stressful and hazardous circumstances. This is an acknowledgement that has frequently been made by the Government in the course of the dispute, and indeed before, and perhaps in particular by my right honourable friend the Prime Minister and my right honourable friend the Secretary of State.
It is very sad that many of these ambulance staff have felt obliged to take action which can only hurt patients in pursuance of a pay claim. Because of this I should like to give my special thanks to the chief ambulance officers and their staff, the voluntary organisations and the police and the army who are struggling to maintain an acceptable level of services.
Since this dispute started much has been written and said about the way forward and the way out of this dispute. I think we have to acknowledge, as indeed some of your Lordships already have, that we have heard nothing new in the course of this debate. Indeed, I myself have no new information
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or initiatives to announce, but what I can say today will, I hope, be helpful in setting the facts in their proper context.
Perhaps I may start by referring to the final offer made by the management side on 5th December last year. Much has been made of the idea that the offer of 9 per cent. over 18 months is really only 6·5 per cent. over 12 months in disguise. But I must say to your Lordships that if ambulance staff were to accept this final offer they would then receive increases of at least 9 per cent. on their basic pay rates backdated to April. That is a good deal more than the 6·5 per cent. rejected by the unions after they had initially recommend it to their members.
I can quote from a letter of 8th May last year written by Mr. Roger Poole which said that after giving detailed consideration to the pay offer and hearing from those members of the committee that sit on the ambulance council they had decided to recommend acceptance of the offer. But times have changed.
Lord Ennals: My Lords, would the noble Baroness put that letter in the Library? It would be helpful to others who are interested. She has referred only to an excerpt from the letter.
Baroness Hooper: My Lords, the letter is probably readily available and I see no reason why it should not be placed in the Library for the convenience of your Lordships.
Returning to the terms of this final offer, I would add that staff in the London ambulance service had been offered additional money —that is over and above the 9 per cent. backdated to April —which would increase their basic pay by as much as 12 per cent. and their overtime rates by over 20 per cent. In addition, fully trained paramedics would receive an additional £500 per annum, again backdated to 1st April 1989.
Those with intermediate skills have also been promised increases yet to be determined, but again they would be backdated to April of last year. All this has meant that £6 million of new money has been added to the cost of the 6·5 per cent. original offer in the current financial year. This fact is not generally understood or appreciated, and so I have tried to say it once again as clearly as possible because it shows how much the original 6·5 per cent. offer has been improved.
Lord Monkswell: My Lords, I am sorry to intervene, but the Minister has said that the money would be backdated and paid from 1st April. The problem I have is that I believe that a number of ambulance workers have been suspended and they have not been paid. Are the Government effectively saying that all those who have had pay withheld from them during this dispute will be paid fully, including the increase that the Government are talking about?
Baroness Hooper: My Lords, I would have thought that that was most unlikely. If the terms of their suspension are that they are not paid during that period, obviously backdating covers only the period

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when they were working and not when they were suspended.
The plain fact is that the unions themselves have not changed the essence of their claim over the last few months. Their bottom line still appears to be a substantial increase in basic rates in the current financial year, plus some form of pay formula for the future, as the noble Lord, Lord Stallard, reiterated. Small wonder therefore that the National Health Service Chief Executive, Duncan Nichol, has told the unions that until they indicate that they are prepared to change their position significantly there is little point in further talks.
This of course was the point made by the chief executive to the noble Lord, Lord Ennals, in his letter. I had not had the benefit of hearing the union's response to the noble Lord's offer and was interested to hear it. I understand, however, that a number of Members of another place have also made similar offers to mediate. Therefore, there appears to be no shortage of volunteers.
Lord Ennals: I have not offered to mediate. I hope that the noble Baroness was not referring to me.
Baroness Hooper: I understood that the tenor of the offer made by the noble Lord, Lord Ennals, and the other Peers involved was that they would.
Lord Ennals: No, my Lords. There was no such suggestion. It would be absolutely inappropriate. We wanted the opportunity of hearing the views of both sides. If there was then common ground, they could go away and talk about it; but I do not think that any of us would say either individually or collectively that we had a mediatory role.
Baroness Hooper: I am glad to have that point clarified. If the noble Lord had felt that it would be of any value, I had been about to say that I would be happy to see him and the other Peers who had volunteered to discuss the matter if he wished.
The unions offer nothing in return for their demand for high basic increases. Therefore we have to return to the fact that over 96 per cent. of all National Health Service staff have already settled their pay for this year —that is, from April 1989 to March 1990 —without recourse to industrial action, and many at rates of increase around 6·5 per cent.
The noble Lord, Lord Monkswell, talks of fairness, but I think he should bear this in mind. Those that have been given more than this are to be subject to major pay restructuring, have agreed to local pay flexibility or have serious problems of recruitment or retention, which we all acknowledge have to be dealt with.
Lord Monkswell: My Lords, I am sorry to intervene, but fairness, like beauty, is in the eye of the beholder, and the British public behold the Government not to be fair to the ambulance workers.
Baroness Hooper: I regret to say that the British public are probably influenced by some of the rather inaccurate statements made in the British press.
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Ambulance staff themselves received much higher than average increases in 1986 —we have talked about this before —when the new salaried structure was introduced. And in the current offer London staff have been offered higher increases because of recruitment problems in the London area which, as I said, we all acknowledge.
It was the 1986 salaried structure which raised the myth about pay parity with the fire service and the call for a pay formula. Pay accounts for over 70 per cent. of National Health Service current expenditure. It would be a rash management indeed that did not want some control over the amounts paid out for such a high percentage of total costs.
I remind your Lordships that the total pay bill for the National Health Service amounted to about £13 billion last year. Some commentators advocate a mere 1 or 2 per cent. addition to pay offers to secure a quick settlement. That is an attractive argument in newspaper headline terms, but each "mere 1 per cent." costs the National Health Service over £100 million. Indeed 1 per cent. for all Whitley Council staff adds up to about £40 million, which in fact is the equivalent of the entire budget of a major teaching hospital.
If pay control is lost —and that is the effect of introducing pay formulas which automatically trigger increases or handing over responsibility to a pay review body or independent arbitrator —then resources might have to be diverted from patient care into the pay budget. Next year total resources for the National Health Service in the UK will increase by £2.7 billion. We do not want to spend a large part of that on pay increases instead of on patient care. That is where our priorities lie.
I should like to quote in support of that one of your Lordships who said in another place (at cols. 28–29 of Hansard on 22nd January 1979):
"I must make it clear to the House that this Government cannot and will not abdicate their responsibility and let wages rip. That is the road to disaster. The only results would be a return to mounting inflation, cuts in public services, high taxes and more on the dole. Those who will suffer most from all this will be the low paid and those on fixed incomes, such as pensioners. This is the law of the pay jungle".
The person I am quoting is none other than the noble Lord, Lord Ennals, who made this jolly good speech almost 10 years ago as the then Secretary of State. That is very helpful to the Government's case today.
Lord Ennals: My Lords, the noble Baroness looked as if she was expecting me to ask her to give way. She accepts, does she not, that the ambulance dispute in the winter of discontent —to save her the use of those words —was brought to an end by a modest increase in what had previously been offered and rejected and that the Secretary of State played a considerable part in that?
Baroness Hooper: My Lords, of course I am happy to acknowledge that and also happy to return again to the 1986 salaried structure argument which was intended to set this on a sensible basis and which, indeed, was acknowledged by the Government so to do. That 1986 salaried structure was a good deal for ambulance staff. We should not be misled into believing that the basis of the deal has been

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undermined since 1986. Not only has the value of the salaries accepted then been more than maintained in real terms, but in 1988 the standard working week was reduced by one hour to 39 hours. That is an overall real improvement of over eight percentage points. When comparisons are made with the pay of firefighters, we should remember that they work a 42-hour week.
A very important aspect of the final pay offer is the review of the 1986 salaried structure. This would have a wide agenda and will include flexible local pay arrangements linked with productivity, recruitment and retention; but so far, I am sorry to report, the unions have shown no interest.
The noble Lord, Lord Stallard, quoted figures on pay. I return to the fray with some other figures. These are based on the ambulance crews' weekly earnings as opposed to the average gross weekly earnings. We do not record centrally gross earnings of individual ambulance staff, but because we are always being asked we have made an assumption that ambulance men and women work an average of two hours' overtime each week. In some areas of course they work far more than that and in others they work less. The gross weekly pay of a qualified ambulance person, including the final pay offer but without the addition for paramedic skills, would be almost £222 outside London; on an annual basis that is around £11,565. In London the figure would be almost £250, which on an annual basis is around £13,000. In the most recent Department of Employment new earnings survey published at the end of 1989 the gross average weekly earnings of full-time male manual workers on adult rates was £217.80, which again on an annual basis is £11,325. In that context the offer made to the ambulance men bears favourable comparison.
Comparisons were made between ambulance staff and firefighters but I believe that realistically they cannot be directly compared. The settlement date for ambulance staff is April and for firefighers it is November. As I have already said, ambulance staff work a 39-hour basic week and firefighters work 42 hours. Comparisons are made with fifth year qualified firefighters; ambulance staff can in fact become qualified after 15 months.
With regard to the funding of extended training, in 1984 the Department of Health endorsed extended training of emergency ambulance crews in certain immediate care techniques. In doing so we recognised that ambulance staff had a vital role to play in immediate patient care. We also endorsed the NHSTA's extended training package. Most health authorities have taken the opportunity to use that package. However, we believe it is for health authorities to make arrangements for extended training and in doing that they need to take account of local circumstances and resources.
I believe that the noble Lord, Lord Stallard, also referred to arbitration. There is no provision for independent arbitration in National Health Service pay agreements. The same arguments against arbitration apply as those against pay formulas and review bodies; those points I have already made. We believe that the management cannot hand over
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control of the amount to be spent on salaries and wages to outsiders who have no responsibility for the provision of patient care.
Reference was also made to standby allowances. An increase in standby allowances is included in the management side's offer of 5th December. Increases for pay review bodies staff are for next year's settlement, which will be from 1st April in the next financial year. Management side's offer is backdated to 1st April last year.
The noble Lord, Lord Stallard, sought to resurrect a 1978 letter —if I recollect correctly —in aid of the Labour Party's support of the ambulance staff action. As regards the Government's commitment, the 1979 Conservative manifesto was very clear on public sector pay. It was on the basis of our policy in that manifesto that we were, after all, elected and re-elected to government. Among the commitments we accepted in taking up office was the implementation of the recommendations of the independent Clegg Commission which provided for very generous pay increases for the ambulance service which, as I have already said, we met in full.
I was asked whether the ambulance service is an emergency service and whether the Government really recognise that. Successive Secretaries of State have acknowledged that a proportion of ambulance service work is of an emergency nature. That proportion is approximately 10 per cent. Urgent work, which is subject to a limited time specified by a GP or a consultant, constitutes 5 per cent. of ambulance work; the balance of 85 per cent. is of a non-emergency nature. Approximately 70 per cent. of the total cost of the service is devoted to that 15 per cent. of emergency and urgent services.
Lord Ennals: My Lords, I am grateful to the noble Baroness for giving way. Does she not accept that the amount of time spent by ambulance workers on emergency work is higher than that of the police and the fire service?
Baroness Hooper: My Lords, I cannot accept that because I do not know the detailed figures. I shall certainly look into that matter. I believe it was suggested by the noble Lord, Lord Monkswell, that there was a hidden agenda in the way the service is delivered. That is not so. I believe that it is often forgotten that in April 1984 we published a scrutiny report on a non-emergency sector of the ambulance service in which we said that it was open to district health authorities to buy in part of the ambulance service from the private sector if that was more cost-effective and provided that the quality of service was maintained.
As a result, many National Health Service ambulance authorities already use private contractors; namely, the hospital car service and the voluntary aid societies which transport appropriate National Health Service patients. That has been the case for many years. It helps to ensure that skilled ambulance crews and specialist vehicles are used for those who really need the special care and attention which they can provide. There is no hidden agenda.
My noble friend Lord McColl said that there are some benefits which have come from this dispute.

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He quoted some very telling examples for which I am most grateful. In my view, if any good has come out of this dispute, it is that a number of longstanding shortcomings in the ambulance service have been brought sharply into focus, not least the fact that there is a greater realisation of the enormous benefits to be gained by splitting the accident and emergency services from more routine work as already happens in some services. We were going in that direction, but I believe that movement has been stimulated as a result of the dispute.
Lord Stallard: My Lords, will the noble Baroness accept that so far her reply has been very disappointing? She has simply repeated what her right honourable friend the Secretary of State has said, much of which has been rebutted. The rest can be the subject of negotiation. The noble Baroness has still not replied to the Question —or is she saying that the simple answer to the Question is "none"?
Baroness Hooper: My Lords, I believe that I made it quite clear at the outset that nothing new had arisen on either side so far as I was aware. Therefore, it would be very difficult for me to use new arguments in responding to old questions. I turn to a point which the noble Lord, Lord Rochester, raised about a meeting of chief ambulance officers which took place yesterday with the National Health Service Chief Executive, Duncan Nichol. The chief ambulance officers agreed with him that a pay formula was inconsistent with local pay flexibility and the right to manage. They also agreed that a two-year deal was likely to play a part in settling the dispute.
Apart from that I was glad to hear the open-minded views of the noble Lord, Lord Rochester, on the future of the service. There is no doubt where the future lies. That has again been spelt out very clearly by my right honourable friend the Secretary of State. Again, I regret that I am not saying anything that will be new to the noble Lord, Lord Stallard. We want a better accident and emergency service which lays greater emphasis on developing paramedic skills and which at the same time provides an efficient and caring service on the routine transport side. We are intent on raising the standards of the accident and emergency service to the best now operating. Some services operate very efficiently in that respect.
We see it as a service with a minimum requirement of one paramedic to each front line ambulance. That raises a number of issues about the provision of paramedic training and equipment. We are giving these matters our full consideration. We want local productivity deals which will release resources to pay staff more through locally agreed flexibility deals. Above all, we want a settlement of the present dispute so that the prospect of an ambulance service fit for the 1990s and providing the level of service which the public has the right to expect can become a reality.
The only way to achieve that is for the ambulance staff to recognise that the final offer made by the management side is a fair one, which I believe I have been able to make quite clear this evening. They
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should accept it and return to normal working. It may be that we have not found a new solution in the course of this debate, but we are all grateful to the noble Lord, Lord Stallard, for giving us the opportunity to make our positions perfectly clear.
Lord Rochester: My Lords, the noble Baroness was kind enough to refer to what I said about the chief ambulance officers. Would she be prepared to go so far as to say that there may be some merit in the suggestion that I put forward that the management side might be willing to leave for future talks the whole question of a pay formula?
Baroness Hooper: My Lords, I think I have made our position perfectly clear on the question of how we view a possible pay formula. It is a subject which will always be considered. It forms no part of the proposals and the arrangements we are making in relation to the current dispute.

River Tees Barrage and Crossing Bill [H.L.]
The Queen's consent signified and Bill reported from the Unopposed Bill Committee with amendments.
House adjourned at twenty-three minutes before eight o'clock.