Lords Sitting of 28 June 1990

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Guildford.

EC Consumer Affairs Council, 13th June
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
What items were discussed at the European Community Consumer Affairs Council on 13th June and what progress was made.
The Minister of State, Department of Trade and Industry (Lord Trefgarne): My Lords, the Council on 13th June adopted the package travel directive. It considered and agreed to extend the system for the rapid exchange of information on consumer products; the matter being remitted to COREPER to consider further detailed procedures. It agreed in principle to extend the European home and leisure accident surveillance system. There was also discussion of the proposed general product safety directive and the Commission presented its three-year plan for consumer policy in the EC.
Baroness Burton of Coventry: My Lords, as regards product safety, does the Minister recall that a year ago at the Council meeting held on 1st June the Commission's proposal on product safety was discussed and referred back? Am I not correct in thinking that at the meeting on 13th June the same procedure was adopted; namely, that the directive was again discussed and again referred back to the same committee? Has the Minister read the excellent report of our own Select Committee on product safety which states:
"There is clear evidence that a lack of harmonised safety rules disrupts trade across borders"?
What do the Government feel about this delay, and can the Minister say what they propose to do to hasten matters?
Lord Trefgarne: My Lords, I am aware of the Select Committee's report to which the noble Baroness referred. As regards the draft directive, as the noble Baroness will be aware we believe that it still contains a number of shortcomings. That is why we believe that further work needs to be done on it before it can be taken forward.
Baroness Burton of Coventry: My Lords, that does not get us very far. Does the Minister not agree that 12 months has been enough time to look at the report? Can he give us any hope that, when it is considered again, it will not be referred back again? Can he also say when the next meeting of the Council will be?
Lord Trefgarne: My Lords, the question of whether progress can be carried forward on this matter
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depends on whether improvements can be made on this issue. We are not in favour of the draft directive as it at present exists.
Baroness Burton of Coventry: My Lords, can the Minister give me the date of the next Council meeting?
Lord Trefgarne: My Lords, I do not have that information in front of me. I shall ascertain the date and let the noble Baroness know.
Baroness Burton of Coventry: My Lords, I wish to raise another matter—
Noble Lords: No!
Baroness Burton of Coventry: My Lords, I wish to ask the Minister about consumer integration. On 29th June 1989 the Government told the House that they fully approved and supported consumer interests being taken fully into account in other Community policies. Can the Minister tell me what specific proposals were put forward on 13th June?
Lord Trefgarne: My Lords, I recited at some length the topics that were considered at the Council meeting to which the noble Baroness referred. If she is now referring to the Commission's three-year plan on consumer policy, I can best describe that as being something like the curate's egg.
Baroness Burton of Coventry: My Lords, if the House will allow me—
Noble Lords: No!
Baroness Burton of Coventry: My Lords, is the Minister aware that I agree with his description of the three-year plan? I was not muddling the two. Consumer integration was discussed on 13th June. Can the Minister say whether any specific proposals were put forward?
Lord Trefgarne: My Lords, I am not sure that I can elaborate further on the lengthy original Answer that I gave on this matter. If there is any further information on the topic that the noble Baroness raised I shall write to her.

European Social Charter: Policy
3.11 p.m.
Lord Richard Lord Richard asked Her Majesty's Government:
What is their policy towards the European social charter.
The Parliamentary Under-Secretary of State, Department of Employment (Lord Strathclyde): My Lords, the Government made clear from the outset their view that the practical effects of the social charter would be to regulate the labour market in a way which would put jobs at risk by raising costs, reducing flexibility and making our firms less competitive in world markets. The Government are therefore unable to support the social charter.
Lord Richard: My Lords, I thank the Minister for that somewhat predictable reply. I am sure he is aware that the Government have consistently emphasised their commitment to the social dimension. If they are against the social charter, can the Minister tell us what initiatives in the social sphere they are prepared to make and support?
Lord Strathclyde: My Lords, we very much want to see progress in the social area. We fully support the idea of a social dimension to the single market. We believe that that is best achieved by completion of the single market, stimulating economic growth and reducing unemployment.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the social charter is a singularly well-designed instrument for increasing both unemployment and inflation?
Lord Strathclyde: Yes, my Lords, and now the whole House will also be aware.
Baroness Turner of Camden: My Lords, are the Government aware that the social charter's preamble makes clear and stresses that employment direction and creation must be given absolute priority? It also states that the Community must respond to the competitive challenges of the future. That is part of the charter's preamble. Is the Minister aware that a Select Committee of this House examined the principles of the charter and made a recommendation to the Government that they should cease their total opposition to it? In addition, the committee said that if the Government wanted to make improvements they should do so by negotiation rather than by outright opposition.
Lord Strathclyde: My Lords, the Government feel that the social charter is inconsistent with the agreement reached by all heads of state and governments at the Madrid meeting of the European Council in June 1989. The agreement was that job creation and development should have top priority in the achievement of the single market. The Government also say that, despite the difficulties we have with the social charter, we shall play a full part in the negotiations on the individual proposals in the European Commission's action programme of measures to implement the charter.
Lord Allen of Abbeydale: My Lords, does the Minister agree that there is much in the social charter which is perfectly acceptable to this country? Does he further agree that it would have been much better if we had taken an active part in its preparation and put our difficulties forward instead of more or less standing on the sidelines and then grumbling at what eventually appeared?
Lord Strathclyde: No, my Lords, not really. We feel that there are some aspects of the action programme arising out of the social charter which we shall be able to accept. There is no point in signing up to 100 per cent. of an agreement which involves a programme that we simply could not accept.
Lord Orr-Ewing: My Lords, is my noble friend aware that the social charter condemns the closed shop and yet the Opposition have been very much in favour of retaining an element of the closed shop in this country? How can they support the charter in one factor and yet disagree with it in another?
Lord Strathclyde: My Lords, I understand that it was the Labour Party's approval of the social charter which has now caused it so much confusion about where it stands on the issue of the closed shop.
Lord Rochester: My Lords, will the noble Lord acknowledge that the key sentence in the social charter relating to employee involvement states:
"Information, consultation and participation of workers must be developed along appropriate lines and in such a way as to take account of the laws, contractual agreements and practices in the member states"?>
Is that not an admirable expression of the Government's own view? Should they not, therefore, warmly welcome it?
Lord Strathclyde: My Lords, that is why, as individual proposals come out of the Commission's action programme, we shall definitely be playing a full part in negotiations.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that I and many other people are not prepared to allow major issues which affect the lives and working conditions of the British working people to be decided in Brussels? Is he also aware that many of the issues and many of the policies which are likely to be imposed by Brussels will be complete anathema to many in the Labour Party and, indeed, to most people in the trade unions?
Lord Ennals: Not so!
Lord Stoddart of Swindon: I do not know how my noble friend on the Front Bench knows about that. He has very little contact with the trade unions and, therefore, he really would not know.
Further can the noble Lord say, bearing in mind the fact that Mrs. Papandreou is behind this attempt to impose the social charter throughout the EC, whether Greece, which was a signatory to the 1960 social charter of the Council of Europe, has accepted and fully implemented that charter?
Lord Strathclyde: My Lords, the noble Lord makes a very valid point. One of the steps we have taken is to ensure that implementation is fully recorded by the European Commission and that it reports regularly to the Council of Ministers to advise member states on exactly how implementation is progressing.
Baroness Turner of Camden: My Lords, is the Minister aware that the TUC General Council, of which I was until recently a member, has given unanimous support to the principles of the social charter? Is he also aware that our party on this side of the House has also supported those principles?
Lord Strathclyde: My Lords, I am glad to hear the noble Baroness state that point. It confirms what my noble friend Lord Orr-Ewing said; namely, that the Labour Party has now rejected the principle of the closed shop.
Lord Molloy: My Lords, the Minister has already said that the Government accept some aspects of the social charter. Therefore, to enable us to understand what their policy is, can he tell the House which aspects they support and which they do not?
Lord Strathclyde: My Lords, we understand that there will be some proposals on health and safety at work which we shall be quite willing to discuss in the most positive way. However, there are other proposals on part-time work which we feel would be detrimental to the employment prospects of people working in this country.
Earl Russell: My Lords, can the Minister say what legal advice the Government have received on the possibility of the charter becoming European law by majority vote? Further, can he say, in the event of it becoming law, whether they will reconsider some of their comments on the issue?
Lord Strathclyde: No, my Lords. The charter itself if not legally enforceable; it is simply a political declaration. It is from the social charter that the Commission has set up its action programmes. Their legal base will be decided on individual merits.
Lord Mellish: My Lords, is the Minister aware that I am one of those who support the closed shop principle, but that fact is not to be confused with the views of the Labour Party?
Lord Strathclyde: My Lords, I am sure that the whole House has heard the noble Lord's view.
Lord Jenkins of Putney: My Lords, is the Minister aware that there have always been elements in the Conservative Party who have objected to any restrictions on employment ever since they regretted the stopping of the practice of little boys jumping up chimneys?
Lord Strathclyde: My Lords, that simply shows that we are a party which is committed to freedom of discussion.
Lord Rea: My Lords, with regard to the supplementary question of the noble Lord, Lord Boyd-Carpenter, in which he suggested that the charter was a prescription for higher inflation and unemployment, can the Minister say what the inflation and unemployment rates are in those countries which have accepted the principles of the charter?
Lord Strathclyde: My Lords, this country has one of the lowest unemployment rates in the European Community. Our youth unemployment is below half the average in the European Community. Those statistics speak for themselves.

Construction Industry Training Scheme
3.20 p.m.
Baroness Turner of Camden Baroness Turner of Camden asked Her Majesty's Government:
What is the position of the construction industry training scheme in the light of reports that substantial cuts in funding are contemplated.
Lord Strathclyde: My Lords, the Construction Industry Training Board and my department are still conducting negotiations on the volumes and funding of youth training undertaken by the board. These negotiations are not yet complete and I am therefore not able to comment on them at this stage.
Baroness Turner of Camden: My Lords, I thank the Minister for that Answer and am glad to learn that the discussions are still proceeding. Is there a possibility that the youth training scheme could be abandoned altogether unless the funding is provided? Would that not be a great pity? The building industry is still suffering from a chronic shortage of skilled workers and there has been a decline in the number of school-leavers.
Lord Strathclyde: No, my Lords, I do not think that there is any prospect of youth training ceasing to be a programme of the CITB.
Lord Mellish: My Lords, is it not on record that the Government have said that the Construction Industry Training Board scheme is the finest in Britain and an example to be followed? Does it not flow from that that cuts should not be directed at what the Government consider is one of the finest training schemes?
Lord Strathclyde: My Lords, we have already shown our commitment to the CITB by leaving it in its statutory format, while other industry training organisations have been privatised. By the same token, however, we feel that employers themselves should play a greater part in contributing towards the training of their future employees.
Lord Dean of Beswick: My Lords, is the Minister aware that, even though there is a downturn at present in the building industry, there is still a severe shortage of skilled operatives? Come the time when the Government may be able to lower interest rates and the building industry starts to increase its activity again, will it not further exacerbate the problem if there is a growing shortage of skilled operatives? In its own interests the nation will need a larger pool of skilled young people going into the trade. Can the Minister take that on board in his general considerations?
Lord Strathclyde: My Lords, it is precisely because of what the noble Lord said that we feel that employers should contribute more to the training of their future employees.
Lord Rochester: My Lords, on a related question, is it the case that training and enterprise councils have complained of inadequate funding and asked for greater freedom of operation and more control over their budgets? Do the Government agree that these councils should have more autonomy in such matters?
Lord Strathclyde: My Lords, with great respect to the noble Lord, that is another Question.

CAP Reforms: GATT Uruguay Round
3.22 p.m.
Lord Jay Lord Jay asked Her Majesty's Government:
What steps they are taking in the GATT Uruguay Round negotiations to ensure that major reforms of the common agricultural policy are accepted by the EC so that an agreement beneficial to world trade may be achieved.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, all parties to the GATT Round negotiations have agreed the long-term objective. It is to provide:
"substantial progressive reductions in agricultural support and protection sustained over an agreed period of time, resulting in correcting and preventing restrictions and distortions in world agricultural markets".
The UK is working hard with our EC partners to develop the Community's aggregate measure approach. Intensive negotiations are taking place in Geneva to agree a framework to meet the long-term objectives.
Lord Jay: My Lords, since major reforms of the protectionist common agricultural policy are fully as much in the interests of this country as of the food exporting nations and the GATT negotiations generally, why does our Minister of Agriculture appear to support the EC in declining to make serious concessions?
Baroness Trumpington: My Lords, I say to the noble Lord "Watch my lips". I would remind him that the UK is a member of the EC. We have strongly supported—indeed we have initiated—the present EC policy and proposals.
Lord Stoddard of Swindon: My Lords, is the noble Baroness aware that most of us would prefer to watch her actions and the actions of the Government rather than watching her lips? It is absolutely certain that by supporting the EC policy on agriculture—which is protectionist—the Government are not only harming other world producers, particularly those in underdeveloped countries, but also harming our own farming communities. Is the noble Baroness aware that over the past 20 years, 25 per cent. of British farmers have gone out of business and another 25 per cent. are likely to do so in the next 20 years unless something is done about the CAP?
Baroness Trumpington: My Lords, I dispute the remarks about our farmers going out of business on
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account of the CAP. Regarding benefits for less developed countries, it is recognised that special treatment of developing countries is an integral element of the negotiations. Reform of agricultural policies worldwide will, however, lead to more stable trading conditions. This will encourage the development of agriculture in less developed countries.
Lord Gallacher: My Lords, does the noble Baroness agree that the Community's proposals for a re-balancing in the GATT negotiations whereby the Community would reduce its protection for grains in return for increases in protection for oilseeds and non-grain feedstuffs would reduce the level of agricultural disparities as well as reducing the Community's budget costs? Is she further aware that these proposals could also lead to greater stability in world grain prices?
Baroness Trumpington: My Lords, re-balancing would mean an increase in protection against certain imports—for instance, as the noble Lord, Lord Gallacher, said, oilseeds and cereal substitutes—offset by a reduction in protection elsewhere, for example, on cereals. The United Kingdom's doubts as to whether an acceptable package can be negotiated are well known and it is too soon to say what might emerge.
Lord Jay: My Lords, I am delighted to watch the noble Baroness's lips—at arm's length. Does she agree that it would be most unfortunate if obstinacy on this issue were to wreck the GATT negotiations altogether?
Baroness Trumpington: My Lords, I agree that it is not obstinacy that is needed but a general agreement on the art of the possible in the future.

Business
3.26 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that at a convenient moment after 4.30 this afternoon, with the leave of the House, my noble friend Lord Trefgarne will repeat a Statement to be made in another place on British Aerospace.

Government Trading Bill
3.27 p.m.
The Paymaster General (The Earl of Caithness): My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read a third time.—(The Earl of Caithness.)
Lord Bruce of Donington: My Lords, since the Report stage at which matters relating to accounts were raised, we have received an undertaking from the noble Earl in a letter of 21st June relating to the satisfactory results of certain matters. We are quite happy to accept the undertaking which has already

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been placed in the Library of both Houses. We welcome the improvement of the Bill during the various stages in your Lordships' House, and in these circumstances we support the Motion.
Lord Lloyd of Kilgerran: My Lords, I wish to take the opportunity to thank the Minister for having written to me on the matters that I raised at the previous stage of the Bill.
On Question, Bill read a third time.
The Earl of Caithness: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(The Earl of Caithness.)
On Question, Bill passed, and returned to the Commons with amendments.

Access to Health Records Bill
Baroness Ewart-Biggs: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Baroness Ewart-Biggs.)
On Question, Motion agreed to.

National Health Service and Community Care Bill
3.30 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, I beg to move that the Commons amendments and reasons be considered forthwith pursuant to Standing Order 39.4.
Moved, That the Commons amendments and reasons be considered forthwith pursuant to Standing Order 39.4.—(Baroness Hooper.)
On Question, Motion agreed to.
Baroness Phillips: My Lords, before we engage in the debate, bearing in mind that yesterday we were discussing in a similar setting another Bill and I was told that I was out of order because I dared to challenge something that the Government had said, I should be grateful if we could know precisely from the Clerks at the outset of this debate what the position is. Is it the case that when the Government have spoken no one must come back and either ask a question or make a comment? I should like to have confirmation on that point because I believe there has been a change since the time when the Labour Party was in government. It is important that we should know what our powers are and the limits of those powers.
The Lord Privy Seal (Lord Belstead): My Lords, I think I am right in saying to the noble Baroness, Lady Phillips, that the rules on the consideration of
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Commons' amendments are exactly the same as the rules on Third Reading. The essence of the rules is that after the government reply there should not be further debate.

COMMONS AMENDMENTS IN LIEU OF ONE OF THE LORDS AMENDMENTS, COMMONS REASONS FOR DISAGREEING TO CERTAIN OF THE LORDS AMENDMENTS, AND A COMMONS AMENDMENT TO ONE OF THE LORDS AMENDMENTS
[References are to Bill 51 as first printed by the Lords. The Commons Amendments and Reasons are printed in italics]

LORDS AMENDMENT
1 Before Clause 40, insert the following new clause:
("Funding of community care
—(1) The Secretary of State shall, with the approval of the Treasury, make grants out of money provided by Parliament towards the expenses of local authorities incurred in connection with the exercise of their community care functions.
(2) Grants made in accordance with subsection (1) above shall be used by local authorities solely for the provision of community care for purposes described in plans drawn up in accordance with section 44 below.
(3) The Secretary of State shall not later than 30th November in the year preceding any financial year lay before Parliament his estimate of the total amount of grant likely to be disbursed under this section in respect of that financial year, together with a statement of the sums requested by local authorities and the formula for distribution between such authorities, and shall at that time publish forecasts for the following two financial years.").
The Commons disagreed to the above amendment but proposed the following amendments in lieu thereof—
2 Page 53, line 18, after ("incurred") insert ("(a)")
3 Page 53, line 20, at end insert ("or
(b) in making payments, in accordance with directions given by the Secretary of State to voluntary organisations which provide care and services for persons who are, have been, or are likely to become dependent upon alcohol or drugs.")
Baroness Hooper: My Lords, I beg to move that the House do not insist on their Amendment No. 1 but propose in lieu thereof Amendments Nos. 2 and 3.
I am sure that your Lordships will warmly welcome Amendments Nos. 2 and 3 which address the issues so eloquently expressed during our debates. The amendments enable local authorities to assist preventive work being undertaken by voluntary organisations and the services they provide for those dependent upon drugs or alcohol. Taken with the Government's undertaking to direct local authorities to cover drug and alcohol misuse in their community care plans, and with the specific references in draft guidance, I hope your Lordships will agree that any doubt about the importance we attach to these client groups is removed. The amendments certainly offer a mechanism for continued funding for those organisations which can best and most effectively provide the services judged necessary. I acknowledge the contribution of those noble Lords who have argued the case for such an approach. Perhaps I might be permitted to mention the noble Viscount, Lord Falkland, the noble Baroness, Lady Masham, and my noble friend Lord Mancroft.

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Amendment No. 1—the so-called ring fencing amendment—would empower the Secretary of State to make grants to local authorities in connection with the exercise of their community care functions. I explained in our earlier debates that the Government do not believe that total ring fencing of funds is the right way forward in our community care policies. That remains the Government's view and it was endorsed last night by another place. What we must do in giving a role to local government is allow it the freedom and flexibility to meet local needs and provide local accountability. Ring fencing of funds does not permit this; it may have positively the reverse effect.
My right honourable friend the Secretary of State has repeatedly made clear that resources for community care will be adequate for the enhanced responsibilities of local authorities. It is strange to hear that local authorities, which have argued for years against large specific grants, should now suddenly find that they are unable to make sensible decisions on priorities and resources. It is even stranger to hear that they want central government to make local decisions for them.
It seems to me that the Government and another place have respected the role of this House in prompting second thoughts and that the new proposal for a specific grant for drug and alcohol misuse services is a helpful and welcome one. I beg to move.
Moved, That the House do not insist on their Amendment No. 1 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 2 and 3 in lieu thereof.—(Baroness Hooper.]
Lord Allen of Abbeydale: My Lords, as the mover of the original Amendment No. 1 I should make a few comments on the decision to reject that amendment while extending the provision in the Bill earmarking money for the mentally ill to cover those with drug and alcohol problems. It would be churlish to refuse this small extension of the original provision in the Bill, especially following the strenuous efforts made by the Front Bench here throughout all stages of the Bill to avoid arousing any expectation of such a concession. I would have found the concession even more attractive if it had extended to the mentally handicapped. I was sorry to find, reading that part of yesterday's Commons proceedings that has appeared in Hansard, that the Secretary of State did not answer a question specifically put to him about the mentally handicapped. However, I shall not pursue the point.
However, I shall pursue the fact that this concession goes nowhere towards meeting the original concept behind the amendment here which, as the noble Baroness has explained, would have applied to all the grant paid for community care. It is as though we had hoped for a whole loaf but have been offered instead one small slice of bread, however acceptable that may be to the noble Viscount, Lord Falkland.
I wish to say quite simply that I regret the decision to reject our amendment. I am being careful to speak
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in moderate terms. I shall not even comment in detail on the extraordinary timetable whereby a Bill leaves this place on Tuesday morning and is back again on Thursday afternoon along with the decisions of another place. The opportunity for mature deliberation of these important issues by Members of both Houses might conceivably have been longer. It is not as though we are just at the end of a Session or approaching a recess.
The crucial Commons vote on my amendment was taken at midnight—only a few hours ago. We do not have the Commons Hansard for discussions after 10.30 p.m. and no particulars of the vote. Be that as it may, it is a source of some satisfaction that the amendment, when it was moved here, received support from a majority of those voting and from all sides of the House. There is evidently support for it in quite a substantial section of the Conservative Party in another place. It reflected the views of Sir Roy Griffiths on whose report much of this part of the Bill is based. There is also considerable support for it in local government and not just among directors of social services. I cannot forget those thousands of infirm, disabled and elderly who will not be covered by the Government's amendments and who have so small a voice in our acquisitive society.
Amendments Nos. 2 and 3 underline the fact that the Government have not the slightest objection in principle to ring fencing and telling local authorities how to spend their money. Nevertheless they seem to be basing much of their case, according to what the Secretary of State said yesterday evening and what the noble Baroness has said briefly today, on the doctrine of public accountability and the argument that local authorities should be left to allocate their resources and discharge their responsibilities in the way that seems to them best. I am not a politician but I find it just a bit rich for that line to be taken by a government who dictate from the centre, through capping, what a local authority can raise through its poll tax whatever the local electorate may think.
Without our Amendment No. 1 not only is there less likelihood of enough money being clearly allocated to community care but, perhaps even more important, there will be no guarantee that what is allocated for community care will in the event be devoted to that purpose. I hope that I am proved to be wrong, but there is certainly now nothing in the legislation which would prevent the most vulnerable members of the community being the first victims of the new system of local finance.
I do not underrate the value of the concession which is on offer, but it leaves out so much and so many people that I wonder whether it really can be reconciled with the great humanitarian and compassionate traditions of the party to which noble Lords opposite belong. I think that they will come to regret their decisions. We shall certainly watch with concern how it all turns out.
All the same, I do not believe that we can stand in the way of the decision of the elected Chamber. I for one shall feel obliged to accept, albeit with sadness, the recommendation made to us by the Minister.
3.45 p.m.
Lord Ennals: My Lords, the noble Lord, Lord Allen of Abbeydale, is a master of understatement and also of profound judgment.
I want to express very deep dissatisfaction with the way in which the Government have handled Lords amendments to the Bill. It is a Bill of profound significance to the people of this country. Good health is our greatest possession and ill health is our greatest burden. The National Health Service is part of our social scene and one of the greatest pieces of social engineering since the Second World War. This Bill is not only about the future of the National Health Service but also about its local partner, community care. It has profound implications for every man, woman and child in the country, even those who use private services because in times of crisis it is the NHS to which they turn.
Parliament has worked long and hard to compensate for the failure of government to consult before publishing the Bill. In another place 109 hours were devoted to the Bill in Committee, followed by some 30 hours at Report stage. In your Lordships' House over 100 hours were spent on the Bill in Committee, at Report stage and at Third Reading. Some concessions were made in debate and we are grateful for small mercies.
My main protest concerns what has happened this week. Through the usual channels my noble friend Lord Graham protested to the government business managers about the way in which the Bill was being handled. The Bill was passed to another place in the early hours of Tuesday morning, as the noble Lord, Lord Allen, said. It was debated in another place yesterday and during the early hours of this morning, on a timetable Motion. As a consequence, four out of five of the amendments passed by your Lordships' House were not even considered. The arguments were not put for the amendments; the arguments were not put against. There were simply five votes—at 00.01 hours, 00.17, 00.30, 00.42 and 00.54. Not a moment of consideration was given to the long debates that we had here on an all-party Motion, when we passed this amendment.
I was able to obtain the resolutions at 11 o'clock this morning, coming from a hospital appointment. However, none of us has any idea of what was said in another place after 10.30 p.m. That is not meant as a criticism of Hansard. Why was it necessary for the Bill to come before us today when it was only considered today in another place? I believe that that is a monstrous and unacceptable way to treat your Lordships and the detailed consideration which we gave to the Bill. This treatment of your Lordships' House by the Government is outrageous. The decision of the Prime Minister, the Secretary of State for Social Services and the Cabinet to impose a timetable Motion on consideration of amendments considered and passed is a calculated insult. My charge is not against Ministers who dealt with the Bill from the Front Bench in this House but against the Government.
I say directly to the noble Lord the Leader of the House that we are entitled to an explanation as to why it was decided that your Lordships' business
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should be conducted in this way. He is a Member of the Cabinet. He represents us in the Cabinet. I want to know whether he is satisfied that the Government have behaved properly towards this revising Chamber. Will he take the opportunity to tell us why there was this unseemly rush? Why did it have to be today, and not Monday, Tuesday or Wednesday? There must be some reason why the Bill must be pushed through without consideration. We are a revising Chamber and we have a great wealth of expertise on all sides of the House which has been used unstintingly during the course of the debate. It includes doctors and nurses, leaders of the universities and of our great voluntary organisations. I believe that this House is entitled to some explanation.
In the time available I have read in the press part of the debate during the early part of the deliberations in another place. I believe that the Secretary of State behaved like a bully-boy in his handling of the arguments which we put forward with great seriousness in your Lordships' House without allowing an opportunity for deliberation and consideration of what we said. The business managers must explain why that was done.
I turn now to what happened in another place. Like the noble Lord, Lord Allen, I profoundly regret that the amendment was not passed as we had carried it. It had been welcomed throughout the country, by directors of social services, elected councillors, voluntary organisations and all those involved in the caring services. It is in line with Sir Roy Griffith's recommendations. As Sir George Young said yesterday, without this amendment grants made by the Government for community care for the elderly and disabled can now be spent for quite different purposes. The Conservative Member for Lancashire, West said that certain councils would use the money to repair holes in the road. The Conservative MP for Macclesfield said that vulnerable groups such as the elderly and the handicapped could not speak up for themselves and could be gravely disadvantaged as the money might be allocated to more desirable and romantic sectors of local government expenditure.
I welcome the ring fencing of payments to voluntary organisations. The noble Lord, Lord Allen, the noble Baroness, Lady Masham, who did so much to further this cause, and I are involved in organisations providing care and services for persons who are or are likely to become dependent upon alcohol and drugs. When the Minister spoke a few moments ago she referred only to preventative measures. I presume that that is not really the case, but the amendment is intended, as it states, to,
"provide care and services for persons who are, have been, or are likely to become dependent upon alcohol or drugs".
That is very good news. It will receive a warm welcome from voluntary organisations which have given evidence of the number of services likely to suffer or to end without such protection. The voluntary organisations will be delighted with that good news, which has been achieved by pressure here. As late as Monday this week Ministers on the Front Bench opposite were setting out reasons why it could not and should not be done. I am glad that

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they have been converted. However, I must say that I have my suspicions.
Why was it done? I believe that it was done by the business managers in another place to prevent a much larger revolt. It was an attempt to buy off those who otherwise had warned that they would vote for the Lords' amendment. I hope that someone will explain why resources to support drug addicts and alcholics should be protected but that there should be no protection for very elderly people, including those suffering from the consequences of senile dementia. As a patron of the Alzheimer's Disease Society I have a right to know. Why is there to be no protection for funds made available or denied to bodies such as MENCAP and the Spastics Society? As the president of the East Anglian region of MENCAP I have a right to know.
I am always suspicious of last minute partial conversions. I guess that the Whips in another place, as I said, acted very quickly and managed to turn away a big protest. I believe that the Government's handling of the whole Bill, not just these amendments and the efforts of this House, is despicable. As I said when we first debated the White Paper on which the Bill is based, I believe that their handling of health and community care will be the issue which more than any other will bring them down.
In my view it would quite wrong for us now to go through the Division Lobbies to vote for or against this amendment. Apart from the question of the propriety of this unelected Chamber voting a second time against the views of an elected Chamber, the Government have made a farce of this debate and this amendment as well as all the others concerned. I want to express my deepest anger at the way in which your Lordships have been treated in the handling of these amendments.
Baroness Seear: My Lords, from these Benches I want to say how greatly we disapprove of the way in which your Lordships' House has been treated in this matter. Either there is a second Chamber which can do a proper revising job or there is not. For my part I would rather not have a second Chamber than one which is treated with the contempt that we have been treated with throughout this debate and in the way that we are now treated by the Commons.
It is not my amendment so I cannot say from these Benches that we should return it to the Commons. As the House is constituted I should not be afraid, as apparently the Labour Party is afraid, to use our constitutional rights to do so. But the noble Lord, Lord Allen, has decided not to proceed in that way. It is not for us to alter that. However, for my part I think that that is what we should have done. Either it is reasonable to ask noble Lords to sit in the Chamber night after night amending the totally inadequate, ill prepared and ill thought-out legislation that the Government bring before us or it is not. Either we have the right to work on and amend such legislation and insist that it is properly considered or we do not.
But there is a second reason why I believe that this is the most abominable way to treat the Lords'
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amendments. The Government's whole approach to community care is beneath contempt. I tried to believe them when they said that they cared about community care. But the way in which they treated the Griffiths Report indicated that they did not care. They kept us waiting two years for a response to the Griffiths Report.
Now they have refused to ring-fence money for the most needy people in this country. The noble Lord, Lord Ennals, spoke about the organisations which he represents. I speak for, among other organisations, the Carer's National Association. There is now no protection whatsoever in this Bill for carers and indeed very little for the people for whom they care. This is a totally uncaring government, as they have now proved. We shall remind them on every possible occasion between now and the general election and beyond of what they have done to the most needy members of our community.
Baroness Young: My Lords, it will not surprise noble Lords to know that I take a somewhat different view from that in the speeches that we have just heard from the noble Lord, Lord Ennals, and the noble Baroness, Lady Seear. I think that this debate raises two matters of principle. The first is the issue of ring-fencing. I listened to the arguments that were put when this issue was debated earlier and again this afternoon to the effect that it is in the interests of those who, as the noble Lord, Lord Allen, said, are the most vulnerable members of society that the money that the Government will give for community care should be ring-fenced so that it will find its way to the authorities responsible for caring for those members of society. I can understand the argument which the noble Lord, Lord Allen, put very clearly, if I may say so.
On the other hand, the counter argument, which is one worth considering, is that if duties and responsibilities are given to local government (as Parliament has done) and the Government give money for the carrying out of those duties and responsibilities, it must surely be right that those who are responsible should carry the responsibility. Although I accept that, as quoted by the noble Lord, Lord Ennals, a large number of Members of Parliament have obviously been very critical of their local authorities and said, "They will not spend this money on the old but spend it on repairing a road", at the end of the day if one gives responsibility to people one has to accept what they do with that responsibility.
Once one goes down the path of giving specific grants one opens up the whole question of, for example, giving a specific grant for education, for which one could similarly make out very good arguments, or indeed for any other major service of local government. I am even less clear as to why local councillors should be in favour of the specific grant. It is their responsibility in social service committees to ensure that the money which the Government have given is spent on those specific purposes. They must argue their case because they are responsible for the community care itself.
Therefore, in principle the line that the Government have taken on this matter has, I believe,

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been the right one. What is important is that extra money should go to local government. I hope that those who are responsible for using it will listen.
Secondly, there is every case for saying that once that responsibility is given, local authorities and in particular the social services departments may end up by getting more money because they will be focusing public attention on their new duties and responsiblities, whereas if the funding is ring-fenced a good many people will say, "That's it. You have got your money and the rest is going on something else". So, far from having more, social services departments could well end up with less. It is very much a double edged weapon. What is important is that the extra money should be there.
With regard to the point raised by the noble Baroness, Lady Seear, which I am glad that she did not press, that she herself would have been willing to send the amendment back to another place, I think that we should be in difficulty in doing that. This matter directly concerns the spending of public money. The other place could have dismissed it out of hand had they chosen to do so. What they have done is to bring back an amendment, which I accept does not go so far as those who would have liked ring-fencing would wish but which is, it seems to me, quite specifically designed to meet the concerns expressed in your Lordships' House and in another place. Therefore we have not received back the original amendment as it stood. We have it with an amendment which I should have thought takes account of some of the concerns that have been expressed.
Therefore the amendment should be seen positively in that light as a way of indicating once again that the concerns of your Lordships' House have been taken on board by another place, have been considered and at any rate in this amendment have been positively and partially met.
Lord Ennals: My Lords, before the noble Baroness sits down would she confirm that she agreed with ring-fencing alcohol and drug projects? If I understood her aright, does that not undermine the whole of her argument against ring-fencing?
Baroness Young: My Lords, I do not think that it undermines the whole of my argument although we could debate that issue at length. The point which I was making was that the other place, having looked at the decision taken in this House and considered the views expressed in another place, has come back with another amendment to meet those views. I should have thought that that shows the value of your Lordships' House.
4 p.m.
Baroness Cox: My Lords, perhaps I may speak briefly and reluctantly. I warmly welcome the concessions which provide some protection for certain vulnerable members of our community and for the Voluntary organisations which provide such immensely valuable services. However, like other Members of your Lordships' House who have already spoken, I am deeply disappointed that other groups—who are equally if not even more
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vulnerable—are not to be given comparably protected funding. I refer to the mentally handicapped, the disabled and the elderly in particular. We know that in the coming years not only will the numbers of the elderly increase but they will increase in terms of both physical infirmity and/or mental confusion. For example, the numbers expected to suffer from Alzheimer's disease over the next decade will increase dramatically and disturbingly.
Those people are least able to assert their rights or to articulate their needs. Very often such people are being cared for by friends and relatives who are themselves elderly and often in need of support. That point was made by the noble Baroness, Lady Seear. The carers of these people as well as those directly in need, will often suffer as a result of this failure to achieve protected funding. I therefore believe that adequate resources need to be assured for those vulnerable groups and their carers, especially given the unfortunate record of some local authorities which in the past have not spent money in ways for which funding had been specifically intended.
I believe in the principle of accountability and the importance of flexibility. But I do not believe that it is right to adopt policies that are likely in some cases to jeopardise the welfare of those most in need of help and support. I therefore deeply regret that I cannot support the Government's policy on this issue. Had the matter gone to a vote I should have had to abstain.
The Viscount of Falkland: My Lords, the noble Baroness was kind enough to mention me by name together with other noble Lords who spoke during the course of the Bill on amendments relating to alcohol and drugs. Without wishing to detract in any way from the sentiments that have been expressed by my noble friend Lady Seear and other noble Lords, I wish to confine my remarks to the concession that the Government have made. It is extremely welcome.
I receive many hundreds of letters from voluntary organisations on the difficulties faced because of the prospect of a hiatus of funding if not a complete lack of it. Although I understand exactly the view of the noble Lord, Lord Ennals, I like to think that the Government took on board the representations that we made. I know that the noble Baroness received personal representations with great courtesy and sympathy; and we appreciate that enormously.
The voluntary agencies have heaved a sigh of relief and are most grateful for this concession. I hope that useful work will continue to be done in this appalling and, I am afraid, growing problem of drug and alcohol abuse.
Baroness Faithfull: My Lords, I am also sad that the other place has not agreed to the Lords amendment on ring fencing. However, perhaps I may concentrate on some practical issues. I do so for the sake of social services departments throughout the country so that they clearly understand the position.
If there is not to be ring fencing, and if the local authorities' social services departments have to carry

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out their present statutory duties, I am not sure of the financial position. My noble friend Lady Hooper said that resources will be enhanced. I believe that my noble friend Lady Young also said that there would be money available. How will this money come to the social services departments? How are the resources to be enhanced? Local authorities must know that.
Perhaps I may say as one who has administered community care that it is an expensive alternative if it is to be done well. However, the most expensive area is that rehabilitating mental patients from mental hospitals. If there is not to be ring fencing for community care, can we have an assurance from the Minister that the mental hospitals now open will not close until the money is available? It is very important that that should be known to social services departments because there is already difficulty with regard to mental patients in the community. If we close more mental hospitals without further money for community care there will be even more trouble.
The present statutory duties of the social services departments are very heavy. There are not adequate resources to carry out their present statutory duties. A number of children on protection registers, for instance, are not being visited because there are not the social workers to do so. Without extra resources, how will the community care bill be administered?
The Children Act 1989 recently passed through this House. Perhaps I may compliment Her Majesty's Government. The way that Act was handled was quite outstanding. There was great consultation for two or three years before the Bill was debated. It was handled in this House very well and slowly by the noble and learned Lord the Lord Chancellor. If well carried out, the provisions of the Act will be expensive. Unless there are the resources, how will that be done? In fairness to my colleagues in the social work field, it is right that we should know these factors. It is widely acknowledged throughout the country that extra money has been given for the training of social workers; but it is not enough. The training of social workers is inadequate at the moment. Where will that money come from? It has to come from the local authorities.
The Cleveland inquiry report recommended that representatives of social workers, health visitors, education and the law should meet together at conferences. I have been to several conferences lately. The one sector of people missing was the social workers because their local authorities could not afford to send them. Therefore they are not mixing as has been recommended in the Cleveland inquiry report.
I am sad at the decision of another place. We are a revising Chamber. By and large we tend to take a professional view of legislation. The other place tends to take a political view, with a few exceptions. But the other place is the elected Chamber. At this stage of the Bill I would not vote against this matter but abstain.
Baroness Carnegy of Lour: My Lords, I am sure that the criterion for the decision of all noble Lords
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on the issue of ring fencing was to ask which was the most sensitive, attractive and cost-effective way of supporting vulnerable people in the community. Since I came to your Lordships' House I have never heard the noble Baroness, Lady Seear, speak so emotionally, and I am sure sincerely, as she has done now. She cares very much about this issue. The noble Lord, Lord Allen, too cares very much. He has played a great part. He felt that ring fencing was the best way to get resources to vulnerable people.
My view is already on record. I shall not reiterate it. I believe that the only person who has spoken in the debate so far who has experience of being an elected member in local authority is my noble friend Lady Young. My experience in a local authority is that there is no problem about getting the funds to vulnerable people. Occasionally there may be a problem about the funding of voluntary organisations because of a certain amount of jealousy within a local authority about their functions. Sometimes there is an argument for earmarking funding for voluntary organisations, as has now happened. Ring fencing has been deleted from the Bill and as it now stands it will enable councillors to carry out the job of helping vulnerable people.
It ill behoves your Lordships' House to underestimate local government as it has on this issue. Many of those people who support local government in other ways were the keenest to take away its decision-making. At the end of the day the right things happen in most councils; and the right things will happen in respect of vulnerable people. It is difficult to argue for roads as against social services when one is allocating budgets in council. There are far more votes for people than there are for roads and I believe that noble Lords who have been involved in local government will agree.
The community care function of local government will represent a large proportion of its duties and responsibilities. It is important that the central government funding of local government should allow for what it must do. It has been given a huge responsibility and the amount allocated to it will be difficult to fix at first. However, it would have been even more difficult to fix a ring-fenced budget. If the community care budget had been ring-fenced the discussion about the activities of local government would merely have been to the effect that it had not been given enough money. Now the discussion will be about the way in which local government is allocating its resources and taking on its new duties.
I hope that as a result of our discussion those who are worried about vulnerable people will not be blinded by the political nature of the discussion. I hope that they will appreciate that local councillors will now have a chance to do their job properly. Although they did not wish to be given a free rein they are having their duties imposed upon them. I believe that that can do nothing but good for the vulnerable people of this country.
Lord Allen of Abbeydale: My Lords, the noble Baroness has put her philosophy most clearly. However, can she reconcile it with the decision to ring-fence provisions for those who suffer from mental illness and drug and alcohol abuse?
Baroness Carnegy of Lour: My Lords, mental illness is one of the difficult areas in local government—
A noble Lord: They all are.
Baroness Carnegy of Lour: There is an argument for ring-fencing. I would not have ring-fenced anything, but I take the point that when their budgets are stretched it is difficult for councils to decide adequately to fund voluntary organisations. Therefore, I can see the point of doing so. I am bound to admit that I would have given the job to local councillors, who I believe would have done it properly.
Lord Mancroft: My Lords, at every stage of the Bill's passage through your Lordships' House I spoke on a subject about which I know a little—the treatment of drug and alcohol sufferers. I decided, therefore, to risk boring your Lordships by saying a few words this afternoon. I am not in the slightest bit interested in any of the party political debates, important though they may be. Neither am I interested in any disagreements that there may be between your Lordships' House and another place, interesting though they may be. I am interested in people who suffer from alcohol and drug addiction.
I do not know a great deal about local government finance. I do not know whether budgets should be ring-fenced or earmarked or whether money for them should be dropped like confetti from Heaven. I listened carefully to the debates in your Lordships' House as they moved from one side to the other, from those who were for ring-fencing to those who were against it. I am in favour of money reaching the right place, and for drug and alcohol sufferers that is the voluntary organisations.
Noble Lords opposite, the noble Lord, Lord Allen, in particular, have been worried about the fact that the Government do not appear to be keen on ring-fencing but are prepared to ring-fence budgets for drug and alcohol sufferers. We all know that there ate exceptions to every rule in the world and possibly this is the exception to that rule. I believe that the reason is simple. Every area of community care is most important and could use more money and resources. We all know and accept that.
I do not not know a great deal about the area of mental health but as regards drug and alcohol sufferers I know that hardly any money has ever reached them. That was not because the money was not available but because local authorities did not have the necessary expertise or knowledge and were unwilling to send the money. Let us admit that one possible reason is that drug and alcohol sufferers are tiresome clients.
I do not mind whether the money is ring-fenced or dropped like confetti. However, I mind about what we asked the Government to do in a variety of ways at the beginning of our debates. We asked them to provide for drug and alcohol sufferers somewhere on the face of the Bill. We said, "Hey, local authorities, here is a special group. At the moment it is not a large group but it is growing and we don't
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want that. We want you to concentrate on them". Those are my words, which could not be put on the face of the Bill, but that was what we asked of the Government. I do not mind in whichever way and in whichever clause the provision is included. Obviously your Lordships mind, but what is important is that the provision has been included.
I do not see that as being a complete U-turn. Noble Lords will remember that early in the proceedings my noble friend Lady Hooper brought forward an amendment in respect of an emergency assessment for that group. The Government thought about the matter after noble Lords on all sides of the House forcefully made their opinions known. They listened but possibly not at the beginning as hard as we should have liked. However, during the course of the Bill's progress through this House they listened a little harder.
By the end of the Report stage the only amendment which received all-party support and which was forcefully put and debated for the longest time related to drug and alcohol sufferers. It appeared to me to be obvious, therefore, that a caring, interested, listening government would go away and make changes to that part of the Bill. The Government did so. I can report to the House even more positively than the noble Viscount, Lord Falkland. Late last night and early this morning I received several phone calls indicating that those in the voluntary organisations are dancing and leaping in the streets because they are delighted with the provision. It is what they want and need and it is what they have got. For that I thank my noble friend.
4.15 p.m.
Lord Renton: My Lords, like other noble Lords, I arrived at the House this afternoon after 2 p.m. and read these amendments. I also read that the other place had accepted no fewer than 177 amendments to the Bill. Now we are debating a fairly narrow point. Having preceded the noble Lord, Lord Allen of Abbeydale, first as chairman and then as president of MENCAP, naturally I took on board what he said about the omission of provisions for the mentally handicapped in the Commons amendments to our amendments. I remind your Lordships that mentally handicapped people are now much better cared for. With the help of government funding in some cases, the voluntary organisations are providing a great deal of community care. MENCAP has a record of which it can be proud.
Bearing in mind the vast amount of legislation and the help that has already been given by central government, local authorities and voluntary organisations to the mentally handicapped, the question is: should we now have a conflict with the House of Commons on the issue raised by the noble Lord? He was supported by the noble Lord, Lord Ennals, with all his eloquence, who brought in the fact that this matter has been handled—and I agree with him—in rather a rush.
From my point of view the main question is that in trying to help the mentally handicapped is it vital that we should raise a conflict with the House of Commons on this narrow funding point, or should we say, "Thank goodness the Government have

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already done so much to help in this Bill and in other ways"? Speaking for myself, I am not prepared to vote against the Government on this.
Lord Carter: My Lords, as my name was attached to the original amendment and, indeed, I spoke to it when it was agreed by your Lordships' Committee, perhaps I may be allowed to say a few words. The concession on grants to voluntary organisations dealing with drugs and alcohol is very welcome as far as it goes. But we have already heard from those active in the field that it does not go very far.
I was interested in the remarks of the noble Lord, Lord Mancroft, about the way in which the Government have been convinced by your Lordships. He overlooks the fact that at about midnight on Monday evening the Government voted down an amendment to give grants to voluntary organisations dealing with drugs and alcohol. Their conversion since Monday evening makes St. Paul on the road to Damascus look like a beginner.
Your Lordships should be aware of the crucial point of the ring-fencing or earmarking argument. If the ring-fencing amendment agreed by this House had been accepted by the Government, it would not have resulted in one extra pound of government expenditure over and above what they would have allocated without the amendment. We all know that the Government have to make calculations for the standard spending assessment of the amount which each local authority will need for community care and other statutory obligations contained in, for example, the Children Act and the Education Reform Act.
With the exception of the specific earmarked grants about which we have heard, the amount so calculated is the basis of the global revenue support grant. We have been told endlessly in the course of debates in this House and another place—and indeed we have heard it this afternoon from the Minister—that the Government will ensure that adequate resources will be available for community care. They will know if those resources are adequate only if they have done their sums correctly and they know the amount.
The amendment agreed by this House merely asked the Government to state specifically the amount which they had calculated would be required to implement community care. The local authorities would still be free to spend more than that sum if they wished but obviously not less. In rejecting the amendment, the Government's argument is that local authorities must be free to decide how much they spend on community care; in other words, they can spend more or less than the Government have allowed for in the revenue support grant. As has been expressed most graphically, that money could be spent on repairing holes in the road.
However, if the authorities wish to spend more, where is the money to come from? It can only come from raiding the budgets for other local authority services or by an increase in the poll tax. However, the Government have taken powers, and look like increasing them, to charge cap those authorities
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which in their view have a poll tax which is too high. As has been pointed out on a number of occasions in the course of the debates on the community care aspects of the Bill, the chances of a generous revenue support grant this year to meet the costs of community care are virtually nil. Any generosity in the support grant will be devoted to keeping down the level of the poll tax next year.
As a result of the Government rejecting the original amendment on ring-fencing, local authorities will now have an impossible equation to solve if they are to meet the present substantial level of unmet need for community care, which was referred to by the noble Baroness, Lady Faithfull, and all the new responsibilities which they must face next year. The reason for that is quite clear and we all know what that is. The Government are fully aware of the situation which I have described and are absolutely determined that all the failings in community care next year that will undoubtedly occur will be blamed on the local authorities and not on the Government whose responsibility it will most surely be.
Lord Swinfen: My Lords, we have been speaking for some time on this so I shall be as brief as possible. The various groups of disabled people who are not included in the other place's ring-fenced amendment are in many ways those who are least able to make their voices heard locally because of their disabilities. It will be said that their carers will do that for them, but that is quite wrong. For the most part the carers will be far too exhausted to try to do anything. They will be suffering under their burden.
I believe that with the Government's wish to bring care into the community, the care for those people is a national and not just a local responsibility, even if it is carried out by the local authorities as agents or trustees for the central authority. What worries me is that the quality of care, possibly even its quantity, will be extremely variable from one part of the country to another. Are we to have disabled people being moved by their friends and relatives from A to B in order to get the kind of care which they need and thus swamping that authority? I am very worried.
I could continue for a long time but I shall not do that because others have spoken far more eloquently than I can. However, I make one point. The amendments which have been returned to us from the other place are, very interestingly, all on the community care part of the Bill. We know that various timetable Motions were carried in the other place. When replying, can my noble friend on the Front Bench tell the House how many of the community care amendments were discussed at any stage in the other place because due to the timetable Motions I believe that certain parts of this Bill were not discussed at all? Therefore, it is very important that we who do not have timetable Motions should go through every Bill with a fine-tooth comb in order to give the other place the opportunity to discuss our amendments.
I gather—although I have not yet had time to study the Commons Hansard—that there were timetable Motions on the amendments we sent to them. I

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wonder how many of the community care amendments which we sent to them were discussed. I believe that this amendment was discussed because I think that I heard something about it on the radio. However, I should be interested to know what proportion of our amendments on community care were discussed and what proportion of the Bill as a whole was properly discussed in another place.
Lord Cledwyn of Penrhos: My Lords, before the noble Baroness speaks, perhaps I may be allowed to return briefly to the first part of the powerful opening speech of my noble friend Lord Ennals. He justifiably criticised the Government for insisting that this business should be tabled today before noble Lords are in possession of the debates in another place on the Commons amendments. That is a point which the noble Lord, Lord Swinfen, made in his speech just now and he was quite right to do so.
It is quite wrong that noble Lords on all sides should be expected to conduct a debate on what is probably the most important Bill of the Session without having adequate time to read the debates in another place. I must make my protest once again.
Noble Lords opposite and the noble Lord the Leader of the House, who is always helpful and courteous in these matters, was aware at the beginning of the week that we were very anxious about this matter. Representations were made through the usual channels that time should be allowed between the debates in another place and this debate. Those representations were rejected by the Government. That is not the way to treat this House; nor is it the proper way to conduct business here. I shall not go into the substance of the debate. I have been impressed by the speeches I have heard. But I must ask the noble Lord the Leader of the House whether he proposes to respond to the case made so well by my noble friend.
4.30 p.m.
Lord Belstead: My Lords, I am sorry that the noble Lord the Leader of the Opposition and the noble Lord, Lord Ennals, are concerned about the timetabling of the business for today. At this stage of the Session in order to obtain agreement it is by no means unusual for the two Houses to take the final stages of a Bill on successive days. Notice of this was given a week ago through the usual channels. However, I agree with the noble Lord, Lord Cledwyn, that the Opposition were not happy about that.
I should like to make one final point. Throughout the passage of the Bill the Government tried to accommodate your Lordships' House, especially the Opposition, on the timetabling of the business. I can only express regret that with regard to this last day that has not met the approval of noble Lords opposite.
Lord Ennals: My Lords, before the noble Lord sits down, can he recall any previous occasion when your Lordships have debated the Commons' handling of debates in your Lordships' House when we have not been able to have the relevant Hansard before us at the time when the votes were taken?
Lord Belstead: My Lords, if the noble Lord will forgive me, he has been a Member of this House for some time, but perhaps not quite long enough to know that this has happened on a number of occasions. It was a matter which was looked at quite specifically by the committee set up by my noble friend Lord Whitelaw when he was Leader of the House. That committee came to the conclusion that whenever possible notice should be given; meaning that there should be a longish period, but only whenever possible.
In this case notice was given, but the noble Lord is saying that not enough notice was given. We have tried to accommodate the Opposition over the timetabling of the Bill as it has gone through. I can only express regret that on this final occasion noble Lords do not approve.
Lord Tordoff: My Lords, if I may say so, it is not simply a question of timetabling. The tools of the trade are not available to the Opposition. Parliament is being treated very badly. It is not merely the matter of timetabling which causes concern but the fact that the Bill was guillotined; admittedly there was some discussion on this specific amendment last night, but there were subsequent amendments, to which we shall come shortly, on which there was no discussion, as has been said. They have simply been flung back in the face of your Lordships' House. It is unfortunate that the noble Lord the Leader of the House is apparently unimpressed by this argument.
Lord Belstead: My Lords, I can speak only as the Leader of the House, and I think that it should be for the last time. I remind the noble Lord, Lord Tordoff, that this is precisely the reason that Commons Reasons are given. At this stage of the Bill it is Commons Reasons which need to be studied in order to see what line noble Lords should take. On this occasion, although one might be forgiven for forgetting it, those show that two quite valuable concessions have been made.
Lord Stoddart of Swindon: My Lords, the noble Lord the Leader of the House said that the committee which looked at these matters advised that notice should be given "whenever possible". Can he say why it was not possible on this occasion?
Lord Belstead: My Lords, as the Leader of the House I shall answer that question. Noble Lords will notice from the Marshalled List that one of the reasons for disagreement is that the Bill should not be unreasonably delayed. That is the view of another place. It is that view which the Government put to your Lordships today.
Baroness Hooper: My Lords, as my noble friend the Leader of the House has dealt more than adequately with the procedural matters, I am left with just a few responses to make to issues raised in the course of the debate.
Like my noble friend Lord Renton, I cannot agree that the Government have spurned the amendments made in this House as 177 out of 182 amendments were accepted, many being as has been

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acknowledged, concessions made in this House. Of the rejected amendments, a change has been offered in lieu of one—the amendment before us now—and, as I hope I shall be able to explain later, substantial progress has been made on the issue of criminal records.
Regarding the question raised by my noble friend Lord Swinfen, the discussion yesterday in the other place was in the area of community care. At Committee stage in another place no guillotine was exercised and therefore there was full and adequate opportunity for as much discussion on the community care aspects of the Bill as there was on the health aspects.
I was slightly accused of having spoken rather briefly today on this matter. I and my noble friends on the Front Bench previously addressed the issues at considerable length. In response to the Question raised by the noble Lord, Lord Ennals, Amendments Nos. 2 and 3 cover both services and preventive measures in the drug and alcohol abuse areas. I am sorry if anything I said led the noble Lord to think otherwise.
The reason for our proposals for specific grants being in the area of mental illness services and services for drug and alcohol dependants, is that local authority services for these groups need considerable development from a low starting point, unlike the services for the mentally handicapped and elderly people, which are an established and longstanding part of local authority provision. My noble friend Lord Renton also reminded us that local authority expenditure on residential care homes and adult training centres for mentally handicapped people in England in real terms increased by 69 per cent. between 1979–80 and 1987–88; in the latter year expenditure was £314 million.
We have had lengthy discussion on this issue and indeed on the Bill as a whole in the course of our deliberations in this House. Nobody can or should accuse the House of skimping. On the question of resources, which was raised, among others, by my noble friend Lady Faithfull, we have always said that the policy will be properly resourced and the details dealt with in the public expenditure survey in respect of revenue support grant in the usual way. That will include the consultation process with the local authority associations. It will then be for local authorities to decide how to allocate resources between departments.
As I said on previous occasions, all the evidence suggests that social services departments fight their corner in these battles and are usually strikingly successful. In response to the noble Lord, Lord Carter, there is no evidence to support the holes in the road theory that he put forward on the basis of experience.
Lord Carter: My Lords, on a point of information, it was a point made by a Conservative Member of the other place. I was merely repeating it.
Baroness Hooper: My Lords, that should prove to the noble Lord, Lord Carter, that he should choose the people he quotes with great care.
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I conclude by saying that safeguards are in place. Not only the electorate, but certainly the Department of Health and, as we have been assured this afternoon, your Lordships' House will be vigilantly watching the way in which local authorities use their new responsibilities and resources.
On Question, Motion agreed to.

LORDS AMENDMENT
4 Insert the following new clause:
("Timetable for implementation
(1) This Part, other than this section and section 44 below, shall have effect subject to the making of an Order or Orders by the Secretary of State after consultation with such organisations representative of local authorities, users and carers as appear to him to be concerned.
(2) Section 44 below shall have effect from the date of Royal Assent.
(3) No Order shall be made in respect of any other provision of this Part under section 63(2) below except where the Secretary of State is satisfied that the resources available to local authorities are adequate to secure the proper carrying out of their duties in a manner conducive to the interest and welfare of any person for whom community care services may be provided or arranged.
(4) For the purposes of subsection (3) above, no Order shall be made unless the Secretary of State is satisfied that resources sufficient to the requirements of subsection (3) above are available in respect of the implementation by authorities of the functions subject to the Order in the first financial year in which they apply and that such resources are likely to be sufficient in the succeeding four financial years based on his estimate of the likely cost of those functions over those years.").
The Commons disagreed to the above amendment for the following reason—
4A because it would unreasonably delay the commencement of Part III of the Act.
Baroness Hooper: My Lords, I beg to move that the House do not insist on their Amendment No. 4 to which the Commons have disagreed for the Reason numbered 4A. The reasons for disagreement with the amendment centred on the fact that the amendment would put off virtually indefinitely the implementation of community care policy. I do not think that your Lordships intended to render it virtually impossible to take forward a policy the principles of which are widely supported, but as I argued during our earlier deliberations that is what we were in danger of doing.
The amendment would mean waiting until all local authorities produced full plans, undertaking a full scrutiny of those plans, making judgments about costs, consulting yet again, assessing the validity of response to every individual in need of care and then looking at resources over a five-year period. This is a recipe for second-guessing, enormous central bureaucracy and utter frustration for those waiting to know how their authority would deliver its services. That is why I argued against the amendment at an earlier stage, and that is the reason another place has disagreed with your Lordships' conclusions. I beg to move.
Moved, That the House do not insist on their Amendment No. 4 to which the Commons have disagreed for the Reason numbered 4A.—(Baroness Hooper.)
Lord Carter: My Lords, as I moved the original amendment in Committee and secured the agreement of noble Lords, I am very disappointed by the response of another place. I find the reason very curious—that it would unreasonably delay the commencement of Part III of the Bill. The press has recently been full of a briefing and a counter-briefing on the point that the Government intended to slow down the implementation of community care, and we generally felt that a clause of this nature would help the Government out of their difficulties. After all, to quote the amendment, any responsible Secretary of State would surely want to satisfy himself that the resources available to local authorities are adequate.
The Minister has been saying throughout the course of the debate that the Government will ensure that is so. So we are not asking the Government to do something that they did not already intend to do. It seemed to us that the new clause repeated a number of phrases, all of which have been used recently by Ministers in this House and in another place—that there will be evolution and not revolution; that there will be a measured pace of reform; that nothing will happen overnight and that adequate resources will be available. All those phrases have been used by Ministers in the past few weeks.
The original amendment was intended to assist the Government in ensuring that those worthy objectives were achieved, and it is very disappointing indeed that the Government have rejected it.
Baroness Seear: My Lords, since the amendment said only that the Bill shall not come into force until there are sufficient resources, are we to assume that the Government will bring it in when there are not sufficient resources: Otherwise, I do not see why they have not accepted the amendment. It must mean that the Government will bring it in without sufficient resources. It seems odd.
On Question, Motion agreed to.

LORDS AMENDMENT
5 Insert the following new clause:
("Start-up costs
.—(1) The Secretary of State may, for up to five years from the date of any Order under this section, in relation to the functions covered by that Order and with the approval of the Treasury make grants out of money provided by Parliament towards any expenses incurred by local authorities in connection with the establishing of functions and activities arising under this Part, and in making any determination as to the adequacy or otherwise of resources under subsection (4) above the Secretary of State shall have regard to the desirability of making grants under this subsection.
(2) A grant made under subsection (5) above may be for capital or revenue expenditure,").
The Commons disagreed to the above amendment for the following reason—
5A because it alters the financial arrangements made by the Commons; and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.
4.45 p.m.
Baroness Hooper: My Lords, I beg to move that the House do not insist on their Amendment No. 5 to which the Commons have disagreed for the Reason
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numbered 5A. The intention behind the amendment is to empower the Secretary of State to make grants for up to five years towards expenses incurred by local authorities in establishing their functions and activities relating to community care. I should point out that the Speaker in another place ruled this to be a privilege amendment. Nevertheless, as I have previously argued, the point here is that those who supported the amendment are again seeking to ring fence funds and remove local accountability and flexibility. We believe that that is a negation of our whole policy in relation to having responsiible local government. I beg to move.
Moved, That the House do not insist on their Amendment No. 5 to which the Commons have disagreed for the Reason numbered 5A.—(Baroness Hooper.)
Lord Carter: My Lords, this too is an amendment that I moved in Committee and to which I secured the agreement of your Lordships. It is indeed, as the Minister said, linked to the previous amendment on ring fencing. I remind the House of the functions which local authorities will now have to undertake without any extra help from the Government in terms of funding. They have to produce and publish a community care plan and to revise it regularly; they have to publish criteria for undertaking individual assessments; they have to carry out individual assessments; there is the assessment and collection of individual contributions towards the cost of services; they must create the monitoring and inspection units; they have to set up complaints procedures; and they must create the purchasing and budgeting systems and set up systems for case management. For all those functions no additional funding is proposed.
To explain to your Lordships the sort of problems that could arise, only this week I was discussing community care with a member of a district health authority; and it is a particularly efficient district health authority. The gentleman concerned is the managing director of a major multinational company and he has considerable experience in business matters. Referring to just one aspect of start-up costs—that is, computer systems—I shall quote him exactly. He said:
"What we have is clapped-out hardware, inadequate or non-existent software and I really don't know how we are supposed to deal with all these new responsibilities without extra financial help from the Government."
Just how are local authorities supposed to fund all the extra functions to which I have referred? If they try to do it out of the poll tax, they run the risk of being charge capped; if they try to do it out of their non-ring fenced general budget, it can be only be at the expense of consumers of community care. As the Minister knows, there are many precedents for the Government providing either some pump-priming or some start-up funds when a whole new policy is introduced. The question is: why is community care excluded from the possibility of extra funds to help with these very substantial start-up costs, which have been estimated to be as much as £200 million?
Baroness Hooper: My Lords, briefly in reply to that point, discussions on financial implications are continuing with local authority representatives.
On Question, Motion agreed to.
LORDS AMENDMENT
6 Clause 40, page 46, line 48, at end insert—
("(1D) Before arrangements are made by virtue of this section with any person, that person shall disclose to the local authority making the arrangements any relevant criminal convictions.
(1E) On request by a local authority, a police officer shall disclose to the authority any relevant criminal convictions of any person with whom it is proposed to make arrangements by virtue of this section.
(1F) Relevant criminal convictions for the purposes of subsections (1D) and (1E) above shall be specified in regulations made by the Secretary of State.
(1G) Any person in respect of whom a disclosure is made under subsection (1E) above shall be informed of the disclosure.").
The Commons disagreed to the above amendment for the following reason—
6A because it is not necessary as administrative arrangements are being made with the Association of Chief Police Officers for the disclosure of relevant convictions.
Baroness Hooper: My Lords, I beg to move that the House do not insist on their Amendment No. 6 to which the Commons have disagreed for the Reason numbered 6A. That reason is that the position has changed since we debated this amendment and your Lordships decided to put it into the Bill. At that time, concern was expressed in all parts of the House that negotiations with the Home Office and the Association of Chief Police Officers about an administrative arrangement were getting nowhere. I am happy to be able to say to your Lordships that there has now been a breakthrough.
The Association of Chief Police Officers has now agreed to participate in administrative arrangements which would meet the request made some time ago by my right honourable friend the Secretary of State for Health to help safeguard residents of homes. Together with my right honourable friend the Home Secretary, it has now been agreed that work should start at once on detailed preparation for a scheme that will cover applicants for registration under the Registered Homes Act 1984; that is, managers and owners of residential care and nursing homes and managers of local authority-run residential care homes.
It is not intended that people who are already registered should be subject to retrospective checks, but checks will be made on all new managers in established care homes. That will apply to changes of management as well as to the setting up of new homes. The arrangements will be put in place as soon as possible. Our firm intention is that they should be up and running by 1st April 1991.
I am sure that noble Lords will wish me to express our gratitude to my right honourable friend the Home Secretary and to the Association of Chief Police Officers for its co-operation in this matter which marks an important step forward in safeguarding vulnerable people who live in residential care or nursing homes.
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Members of another place have quite rightly concluded that the amendment of noble Lords does not now need to be incorporated in the Bill. No doubt it will be recognised that it has already achieved the desired effect. I beg to move.
Moved, That the House do not insist on their Amendment No. 6 to which the Commons have disagreed for the Reason numbered 6A.—(Baroness Hooper.)
Lord Allen of Abbeydale: My Lords, as the mover of that amendment, perhaps I may thank the noble Baroness and say that a word of congratulation is also due to this House as the proposal was supported from all sides. It is gratifying that the Association of Chief Police Officers has been brought to see sense—I hope, in part at any rate—as a result of the amendment that we passed.
It was puzzling to be told that the association felt that the measure would impose a great burden on the police. When asked how many cases were involved, it did not know. It is not clear how the association assessed the gravity of the burden. Speaking for myself, I do not very much mind how the purpose of the amendment is achieved. The arrangements proposed seem to meet entirely the proposition that I had in mind. I am glad to welcome the announcement that the noble Baroness has just made.
Lord Renton: My Lords, those noble Lords who originally voted for the amendment deserve congratulation. The reason that we were given—I say this with respect to my noble friend on the Front Bench—as to why its purpose could not be achieved was that agreement could not be reached between the Home Office, the Department of Health and the chief officers of police. That seemed to me a poor excuse for not getting the thing right.
We have now got the matter right; but I have just one doubt. Can my noble friend assure us that there will be legal power to require previous convictions to be disclosed and to require the police to produce evidence of them? Unless that legal power exists, the arrangement with the chief officers of police, satisfactory though it sounds, might have no legal effect.
Lord Ennals: My Lords, the noble Lord, Lord Renton, has taken the words out of my mouth. He has, however, set out the situation much better than I could have done. I agree that the reason given on 14th June that the Association of Chief Police Officers did not agree simply did not stand up. It was not good enough. We cannot be told by the police how we should legislate. The police do not determine the law; they have to seek to assist in applying it.
I was delighted that the Association of Chief Police Officers changed its mind as quickly as the government changed theirs in respect of voluntary organisations caring for drug abusers and alcoholics. However, in view of the fact that what we said has now been accepted, it would have been far better if the amendment had been accepted for the very reason that the noble Lord, Lord Renton, gave;

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namely, that there will be nothing on the statute book that says that. It will depend. Next week the Association of Chief Police Officers may perhaps discover another three. That is rather too many.
This matter should be determined on the statute book, but I shall not press the issue. I have not seen a word said in another place, although I shall do so tomorrow morning. We shall all be lucky. We shall be able to read tomorrow morning whether anything was said in another place. It would be a farce to vote for the reasons that I gave earlier.
Baroness Faithfull: When my noble friend the Minister replies, will she tell the House whether the provision applies to children's homes and hostels?
Baroness Hooper: My Lords—
Baroness Phillips: My Lords, having been told what is contained in Standing Orders, we have to watch that the Minister does not get up too quickly.
Like other noble Lords, I am delighted. For once, perhaps, the Lords can have a pat on the back. There seems to be a reluctance to do that. I am interested that there should be worries over conflict with the Commons on the first amendment. A Bill was recently rejected at Second Reading; I should have thought it that you could not do much worse than that.
The provision is very vague. The Commons' reason states that the administrative arrangements "are being made". How quickly will they be made? Terrible cases continue to come up. I should have liked something much more definite. I am sure that people concerned with such matters share that view. Like my noble friend, I cannot see any objection to the provision being on the face of the Bill, if it is to be implemented. For heaven's sake, can the Minister tell us what is happening now? When will there be some legislation or arrangements—call it what you will—under which those disclosures can be made?
Lord Winstanley: My Lords, we are told that the reasons we were given in good faith for not carrying this amendment on 14th June are now invalid and that there are therefore no reasons for our not having carried the amendment on that day. If the reasons against it have now been removed, why do we not carry it? Why do we not give the other place an opportunity to carry it? The noble Lord, Lord Renton, made an extremely important point. There is nothing on the statute book to protect the police against accusations of having falsely or illegally disclosed information. Surely the provision should be on the statute book. There is no reason why it should not be. The noble Baroness told us that. So why do we not send the amendment back to the other place for it to be put on the statute book?
Lord Kilmarnock: My Lords, as we have often been told that guidance will be given on various aspects of the Bill, will the noble Baroness tell us whether, if the provision is not to be embodied in the Bill, there will be any guidance that covers the point?
Baroness Hooper: My Lords, I am advised that no power is necessary for the scheme and that regulations relating to spent convictions are already
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in place which would cover that situation. A separate scheme already applies to children. In answer to the noble Baroness, Lady Phillips, it is intended that the arrangements will be in place by 1st April 1991 which coincides with the other arrangements in the Bill. We are considering whether to issue guidance. However, the main point that has been raised is: why not accept the amendment?
Perhaps I should have said in my opening remarks that, unlike the amendment accepted by noble Lords, the administrative arrangements that have now been agreed will cover all residential care and nursing homes, not just those with which local authorities make arrangements, as the amendment of noble Lords set out. They will therefore cover a wider group of people. In other words, the amendment of noble Lords was narrower.
Lord Allen of Abbeydale: My Lords, before the noble Baroness sits down, will she confirm that it is still the intention to make regulations under the Registered Homes Act requiring applicants to disclose criminal convictions? That was promised at one stage.
Baroness Hooper: Yes, my Lords. I can confirm that.
On Question, Motion agreed to.
LORDS AMENDMENT
7 Clause 44, page 50, line 12, at end insert—
("( ) The plan for the provision of community care services referred to in subsection (1) above shall, in the case of those local authorities which are housing authorities, include details on how those authorities propose to meet the housing needs of the persons in their areas who are in need of community care services.").
The Commons disagreed to the above amendment for the following reason—
7A because it is detective and unacceptable as it requires a local authority which is a housing authority to consult itself
5 p.m.
Baroness Hooper: My Lords, I beg to move that the House do not insist on their Amendment No. 7 to which the Commons have disagreed for the Reason numbered 7A.
We had substantial discussion on this matter at Committee stage. The amendment seeks to impose on local authorities which are both social services and housing authorities—that is, London boroughs and metropolitan district councils—an obligation to include details of their plans for housing in their community care plans.
I am sure that no one in any part of your Lordships' House, and not least on these Benches, would dispute the importance of housing to the successful delivery of community care services. For this reason the Bill already requires local authorities to consult a wide range of interests, including statutory and voluntary housing agencies, in drawing up their community care plans. Our guidance makes plain the type of information that we expect to see in plans following such consultation. Further, we have also introduced amendments to the Bill requiring local authorities,

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when carrying out the community care assessments, to refer individuals with apparent housing needs to housing authorities.
There are three main reasons why the amendment is unnecessary: first, because it would apply only to some authorities—the London borough and metropolitan district councils; secondly, because it would impose a requirement on parts of the authority whose main duty—that of meeting general housing needs—lies outside the scope of the Bill; and, thirdly, because the principle it seeks to establish has already been adequately addressed in the Bill and the draft planning guidance. I beg to move.
Moved, That the House do not insist on their Amendment No. 7 to which the Commons have disagreed for the Reason numbered 7A.—(Baroness Hooper.)
Lord Seebohm: My Lords, I was not only the mover but also the inspirer of this amendment. After more than 40 years in the housing field I realise that housing is the basic infrastructure for welfare. I talked this over with the AMA, which combines both the social services departments and housing authorities. It was enthusiastic about the proposal. The AMA wants it. It seems rather strange that it should not be allowed to have it if it is the body concerned with this matter.
I was also puzzled by the noble Baroness's remark that the provision would require a local authority which is a housing authority to consult itself. That is an extraordinary reason. I do not understand what that means. In the amendment we are asking that the plans should definitely include arrangements for appropriate housing. Without appropriate housing, great parts of the community care arrangements cannot possibly be implemented. That is the reason for the amendment. In spite of what the noble Baroness said, I cannot see why it should not be part of the Bill.
Lord Tordoff: My Lords, the reasons given by another place for disagreeing with the amendment are meaningless in relation to the clause. The subsection quite clearly states that the plan referred to earlier in the clause shall contain certain provisions relating to housing. It has nothing to do with the housing authority having to consult itself. This was not debated in another place last night so one cannot blame the Members of another place. They simply voted it out without any consideration. It would have been better if the person who wrote the reasons for the other place disagreeing had, first, put them in English, and, secondly, made some connection between those reasons and the amendment that was passed in your Lordships' House. We deserve a better explanation.
Baroness Hooper: My Lords, I am advised that the amendment is unworkable in legal terms because the effect would be that the authority would have to consult and collaborate within itself. It would be extraordinary to require on the face of the Bill different departments of the same authority to
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consult each other. We must assume that they do that in any event. I am advised that to empower an authority to do so in this way would be unworkable.
Lord Seebohm: My Lords, before the noble Baroness sits down, there is nothing in my amendment about consulting. My amendment requires that such provision should be part of a plan. There are a number of draft guidelines about what plans should contain. This is one extra element that plans must have.
Lord Ennals: My Lords, is the Minister really saying that she does not think that the housing part of a local authority and the community care part of a local authority should consult?
On Question, Motion agreed to.
LORDS AMENDMENT
8 Clause 49, page 54, line 7, at end insert—
("(ba) such voluntary organisations as appear to the authority to represent the interests of persons who use or are likely to use any community care services within the area of the authority or the interests of private carers who, within that area, provide a substantial amount of care on a regular basis to persons for whom, in the exercise of their functions under this Act or any of the enactments mentioned in section 2(2) of this Act, the local authority have a power or a duty to provide, or to secure the provision of, a service.").
The Commons agreed to the above amendment with the following amendment—
8A Line 6, leave out ("a substantial amount of care on a regular basis") and insert ("care").
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 8A to Amendment No. 8. In another place the Government were pleased to accept an amendment tabled by the honourable Member for Ross, Cromarty and Skye and moved on his behalf by my honourable friend the Parliamentary Under-Secretary of State for Health at the Scottish Office. The amendment parallels one which was made to the provisions for England and Wales, moved by the noble Baroness, Lady Seear, at Third Reading in your Lordships' House, and it makes good sense to bring the Scottish provisions into line. It was thought that the words:
"a substantial amount of care on a regular basis",
were unnecessarily restrictive. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 8A to Lords Amendment No. 8.—(Lord Sanderson of Bowden.)
Baroness Seear: My Lords, as this amendment parallels one which I moved, I suppose that I must rather grudgingly say that it is some little gain.
Lord Carter: My Lords, my name is also on the amendment. I am glad to add my ungrudging thanks to the Government.
Lord Sanderson of Bowden: My Lords, I accept the grudging thanks of the noble Baroness and I thank her very much indeed for bringing this point to the notice of your Lordships' House.
On Question, Motion agreed to.

BAe-Rover: EC Decision
5.7 p.m.
Lord Trefgarne: My Lords, with your Lordships' permission, I wish to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Trade and Industry on the decision reached yesterday by the European Commission following its review of the arrangements reached with British Aerospace regarding the sale of the government shareholding in Rover Group. The Statement is as follows:
"The Government believe, in the circumstances at the time, the additional concessions granted to British Aerospace were a necessary part of our agreement so that the privatisation of Rover Group could proceed. That deal brought considerable benefits. It freed the taxpayer from the contingent liability of the Varley Marshall Joseph assurances. That liability then amounted to £1.6 billion and was set to rise substantially over the corporate plan period. It ensured that Rover Group's needs would not in future require special government aid, which had amounted to £3.5 billion while under public ownership. It safeguarded over 190,000 jobs, mostly in the West Midlands. It made a desirable contribution towards restructuring within the European motor industry. Under BAe's ownership the corporate plan is being fully implemented. Rover has already committed more than £500 million of new capital investment. The new model range is highly successful and the company has returned to profitability.
"The Commission's principal decisions are as follows: that (I quote) '£150 million represented a reasonable purchase price for the company';
that the Government should provide an undertaking that any arrangement between BAe and the Inland Revenue will not allow Rover Group to use more than the £500 million of trading tax losses specified in the sale agreement with BAe, and that these losses will remain within Rover Group. I am of course very happy to give an undertaking that the terms of the sale contract will be adhered to;
that BAe should automatically be required to pay financial penalties if there is any change in control of Rover Group or its principal subsidiaries before July 1993. We shall be exploring precisely what this means with the Commission;
that the grant of £1·5 million towards Rover Group's costs incurred in the acquisition, and the £9·5 million contribution towards BAe's costs in buying out the minority shareholders, should be repaid;
that the benefit to British Aerospace of deferring payment of the £150 million consideration for Rover Group should similarly be repaid.
"In relation to this deferment, the Commission has concluded that BAe should be required to pay an amount of £33·4 million calculated as the estimated gross interest saving to the company. Fairness suggests that any such benefit, and
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therefore any repayment, should be assessed net of tax, thus reflecting the true value of the deferment to the company. We estimate that the equivalent post-tax benefit would be some £22 million, a difference of £11·4 million.
"If the Commission's decision is on the basis of the gross interest saving, then the net cost to BAe will depend on whether tax relief is available in respect of the repayment under normal UK tax law. The availability of tax relief on the £33·4 million will need to be settled in due course between British Aerospace and the appropriate tax authorities and perhaps ultimately in the courts.
"The Commission also notes that expenditure of aid agreed in 1987 for the restructuring of the Leyland-Daf commercial vehicle operation has been slower than anticipated. It suggests the possibility that up to £40 million of this may eventually need to be repaid. The Commission acknowledges however that this figure is speculative and that the final out-turn of expenditure will not be known until next year.
"As the Commission's efforts to bring all state aids within the Community under control are beneficial for the development of the single market, the Government believe it is important to support them. We have thus always acknowledged its ultimate right to reach its own judgment on the status of these additional arrangements in the context of the 1988 decision. We also accept that any benefit received by a company which the Commission properly decides is a state aid incompatible with the treaty should be repaid.
"Equity suggests that the repayment should represent the net value of the benefit received by the company and not contain any unintended element of penalty. We are therefore concerned that the Commission has decided on £33·4 million in respect of the interest when the estimated benefit to British Aerospace is some £22 million, handing down a decision in gross terms without regard to whether or not the repayment will be allowable against tax under normal UK law.
"We shall accordingly wish to give careful consideration to this aspect of the decision and to any representations by BAe. Subject however to that, the Government, having carefully studied the arguments and in order to demonstrate our support for Community policy on state aids, have decided to accept the Commission's decision on repayment. We shall be discussing with the Commission and British Aerospace other detailed matters raised on the Commission decision. I am advised that British Aerospace will consider its position in the light of this Statement and after studying the Commission's decision in detail".
My Lords, that concludes the Statement.
5.13 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the Minister for repeating the Statement made by the Secretary of State in another place. We can begin to say that the truth is coming out as the truth will always do in these matters.

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I wish to be clear about the Government's view. From the Statement it is not entirely clear to me exactly how the Government regard the legal position. Now that they have said that they will not challenge the European Commission's verdict, will the noble Lord confirm that his Government, according to the noble Lord's own estimate, wrongly gave away more than £22 million of taxpayers' money by postponing the payment of the purchase price and that Parliament was not properly told?
Will the Minister further confirm that in addition £9·;5 million of British Aerospace costs in buying out Rover minority shareholders were wrongly paid by the Government and that Parliament was equally kept in the dark? Will he further confirm that a grant of £1·5 million towards the cost of the Rover acquisition was wrongly paid by the Government to British Aerospace? Does he agree that for reasons of their own the Government decided not to report that agreement either to the Commission or to Parliament?
Will the Minister also confirm that at the last minute certain tax concessions were offered, perhaps the result of a number of meetings which are now on the record between the Inland Revenue, the DTI and British Aerospace? Will he confirm that these concessions were never reported to the Commission and that, as I understand it, a full report has now been demanded by the Commission? Will he now tell us the full extent of these special tax concessions that were given?
I ask the Minister to confirm also that while British Aerospace has a perfect right to go to the European Court, the Government, with their responsibility for the management of public funds, now accept without equivocation that the money was wrongly paid and should be repaid?
I hope that the noble Lord will confirm all those matters because they are a logical consequence of the Statement that he has repeated. Will the Minister tell us why there has been no apology, no admission of responsibility and no statement about who is to accept the blame? The noble Lord, Lord Young of Graffham, made a Statement in this House on 14th July 1988 which said:
"the Commission has approved the final terms of the acquisition". [Official Report, 14/7/88; col. 981.]
Can the Minister say how that statement can be reconciled with the events that are now revealed? How can it be reconciled with the Commission's decision of 13th July that the purchase price would be paid immediately? In addition, how can that state of affairs be reconciled with the letter written by the noble Lord, Lord Young of Graffham, to the chairman of British Aerospace, dated 12th July, stating:
"On deferment of the £150 million consideration, I can offer three possibilities in ascending order of risk that the deferment will be picked up by the European Commission in which case they might require repayment of the notional interest saved"?
We now know that the deferment was picked up by the Commission which has demanded repayment. Can the Minister say how it is possible to justify the statement that the Commission had approved the
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final terms? It could not have done because it had never been told them.
The truth of the matter is that from the start this deal has been as crooked as a corkscrew. Ministers have twisted and turned and engaged in deceit. It is now there for everybody to see. It is a sad and shabby story. In the end the party opposite will pay the ultimate penalty.
Lord Ezra: My Lords, I too wish to thank the Minister for repeating the Statement on an issue which raises major problems of industrial policy and ethics. However desirable the objective may have been to transfer the Rover Group into a wider industrial group and give it greater opportunities for growth, nonetheless it is very clear that the methods adopted for that purpose were, to say the least, questionable.
A matter of concern to the House right from the start was the closed nature of the transaction. It was a closed bid even though it was known that there were other bidders. What appears to have made the matter worse was that in addition to it being a closed bid there were, as has now become apparent, secret protocols of a financial nature which were only revealed at a later stage.
Therefore, my first question to the Government is very much in line with what the noble Lord, Lord Williams, asked. Are these methods regarded by the Government as a proper way of proceeding in such cases? Can we assume that these events will not be regarded as a precedent if there should be any similar situation? There is the specific issue of the tax relating to the saving on the deferment of the payment of the purchase price. As I understand it, the Commission has specifically insisted that the sum of £33·4 million, which is the gross value, should be repaid in that form. The Government have stated that they wish to take up the issue. However, can we assume that that will not be a sticking point and that if the Commission insists on full repayment it will be met?
Finally, there is the question of the Government stating that they fully support the Commission's policy on state aids. This particular transaction makes that statement of adherence to that policy somewhat questionable. Are we to assume that for the future the Government will be extremely careful in this area and avoid falling into such traps? If we continue to claim, as they do, that we have a good record of compliance with Community legislation—indeed it has often been said that it is better than that of any other member state—surely that assertion has been somewhat dented and weakened by recent events.
Lord Trefgarne: My Lords, I wonder whether your Lordships—and I refer to both noble Lords—fully recall the circumstances which surrounded this transaction. To put it bluntly, the Rover Group was on its uppers. It had spent thousands of millions of pounds of taxpayers' money and was set to spend thousands more. I believe that the Government were right, and that my noble friend Lord Young was right, to seek to return the Rover Group to the private sector and hence to put the financial responsibility where it rightfully belonged.

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The fact is that large industrial enterprises of that nature hardly ever prosper under public ownership. Here was a classic example of the shackles of nationalisation ruining the commercial prospects of an otherwise viable venture.
Lord Williams of Elvel: My Lords, I really must—
Noble Lords: Order!
Lord Trefgarne: My Lords, the noble Lord has had his chance to speak. He may speak further later on. I am attempting to explain the background to this matter. It appears to me that that had not occurred to the noble Lord when he made his intervention.
As I said, the Rover Group was in a very serious situation. The results of that situation and the enormous financial burdens which would have followed would have fallen on the taxpayer. The sum of £1·6 billion was already on the slate so far as concerned the Varley Marshall assurances and thousands more millions of pounds were already in prospect. When the noble Lord talks about the stewardship of public money, let him please ponder on the figures to which I referred.
In regard to the issue of concealing matters from Parliament, this matter and everything concerned with it was properly reported to Parliament at the appropriate time. I can draw the noble Lord's attention to the relevant Estimates which were laid recording this expenditure, if he would like me to do so. Contrary to the allegations which have been made from time to time by noble Lords opposite and others, there were no special tax concessions made to British Aerospace or to the Rover Group in this matter.
I turn now to deal with the relationship with the Commission. We have always acknowledged the Commission's right to reach its own judgment on the matter. It has now reached its conclusions and, as I said, we shall abide by them, although the position of British Aerospace is a matter for that company to decide.
Perhaps I may add at this point that these figures, representing £33 million or £34 million—depending on one's point of view—pale into insignificance beside the figures in some other recent cases of which the noble Lord may be aware. I refer, for example, to that Of the Renault company, where I believe that the Commission called for £900 million of public money to be returned to the unfortunate French taxpayers.
5.24 p.m.
Lord Hatch of Lusby: My Lords, I too should like to thank the Minister for repeating this Statement, if only because it is in such direct contrast to the statements he has made to me and to the House in Answers to recent Questions on the subject. The last time I asked him a Question on the matter, he said that the allegations of bribery and deceit were only to be found in my mind. In that case, my mind must have spread very widely through the newspapers of this country and those of the world today.
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Will the Minister now accept, first, that the report made by his colleague, who is a Privy Counsellor and a member of the Government of which he is a member, exposes the fact that the British Government used taxpayers' money to bribe a commercial enterprise in order to maximise its profits—which the company has done since the deal was made; and secondly, that in so doing Parliament and the Commission were deceived by the Secretary of State, as was outlined but not yet answered, by my noble friend Lord Williams of Elvel?
Lord Trefgarne: My Lords, the noble Lord has made that allegation on more than one occasion. I have rejected before, and I do so again today, the allegation that Parliament was in some way deceived. As I have already said—and I do not mind repeating it—the Rover Group was on its uppers. Only one firm was seriously interested in taking it over. The Commission has confirmed that fact, and that answers the issue raised by the noble Lord, Lord Ezra. There was only one credible bidder. I think that British Aerospace did the British taxpayer a great favour by taking over the company. I am greatly obliged to BAe for so doing.
Lord Jenkins of Hillhead: My Lords, is the Minister aware that I have rarely heard a more irrelevent bombardment than that with which he sought to divert attention from the detailed questions put to him by the noble Lord, Lord Williams of Elvel? Is he further aware that across that broad segment most concerned with business and industry, the transactions of the Government are assuming an increasing habit of sleaziness? Will he also reflect upon the likelihood that this may be an inevitable consequence of the elevation of the pursuit of mammon into a supreme god and its achievement as a state of grace?
Lord Trefgarne: My Lords, I am afraid that that is the sort of high philosophy which generally excapes me on these occasions. However, I respect the noble Lord's point of view. He was, of course, a distinguished president of the Commission not so very long ago. Therefore, he will understand that the Commission and the governments of member states often form different views on the same subject. This was one such occasion.
Lord Nugent of Guildford: My Lords, is my noble friend aware that most people who have not been entirely bewildered by the adverse press presentation of this affair in respect to the enormous liability of the Rover Group—which my noble friend rightly told us had already cost the taxpayer thousands of millions of pounds and was likely to cost even more because there was no possibility of it becoming sound—will feel a sense of immense relief that further money will not be lost to the taxpayer? Is he also aware, in regard to the other major point he made about the jobs of 190,000 men and women being at stake, that it will be seen that by getting the Rover Group transferred to a strong and viable company such as British Aerospace the prospect of the continuing employment of such people is now secure? At the same time, it will also be seen that

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the taxpayer has been relieved of further enormous liabilities.
As regards the technicalities of this deal made with British Aerospace, there were certainly other points to be considered. Indeed, my noble friend was very nearly beaten up by noble Lords opposite when he stated how various further concessions had to be made so as to get British Aerospace finally to accept this hot potato. Of course, the company finally accepted the deal, doubting the possibility that it would lose hefty sums of money in the process. However, BAe accepted the deal, took over the company and, thank goodness, is now making a success of the venture. Regarding the broad interests, the repayment of £44 million in order to conform with the Commission's principle of maintenance of competition—which is perfectly reasonable—does not seem to be serious and it is an enormous relief to the taxpayer.
Lord Trefgarne: My Lords, I am greatly obliged to my noble friend; I entirely agree. What would noble Lords opposite have had us do? Would they have had us allow the company to go bankrupt?
Lord Bruce of Donington: My Lords, we would not have bribed them.
Lord Trefgarne: My Lords, I should be obliged if the noble Lord would keep quiet when in a sedentary position. If he wishes to intervene, I will give way. Would they have had us allow the company to go bankrupt with the cost to the taxpayer of perhaps £2,000 or £3,000 million? About 200,000 people would have been put out of work in the West Midlands. If that is what noble Lords opposite seek, then let them say so loud and clear.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that his attack on the Rover Group, before it was handed over to British Aerospace, is quite unjustified? Had the Rover Group not been taken into public ownership in 1976, the British car industry would not have existed. The noble Lord's party voted against taking British Leyland into public ownership at that time.
The fact that the industry was under public control over a long period meant the continuation of the British car industry. That it needed thousands of millions of pounds for its restructuring and for capital investment was due to the failure of its previous owners to provide that capital when it should have been provided over the years. The noble Lord's attack is therefore completely unjustified.
Nevertheless, the Government made a decision that they would sell the industry or virtually give it away without any competitive venture, without any tendering or similar activity. The problem that the Government have with the British people is that the people believe that the Government, on a doctrinal basis, were ready to get rid of the Rover Group at virtually any price because they did not want it under public control.
The lack of transparency in the dealings in this matter—and there has been a lack of
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transparency—has made the public suspicious of the Government's whole approach to the privatisation programme, not only in respect of Rover but of other industries as well. The noble Lord must bear in mind that the British people believe that the whole truth has not yet been told in this instance.
Finally, if the noble Lord believes that the Government were correct in all their dealings, why do they accept the Commission's ruling on the matter? If they really believed in what they had done, they would not accept the ruling. They would reject it out of hand and advise the Rover Group to repay nothing at all because everything that has been done has been completely above board and legitimate.
Lord Trefgarne: My Lords, if the noble Lord will forgive me for saying so, I believe that he lives in a world of his own. Companies in the public sector have almost without exception failed to prosper. The Rover Group was no exception. The fact truthfully is that Ministers and officials are very bad at running industrial enterprises. That applies just as much to Conservatives as to noble Lords and others opposite. The best people to run commercial and industrial enterprises are commercial and industrial experts, not Ministers and officials. That is, I fear, the basic reason why all these nationalised enterprises have done so badly over the years. British Leyland, or the Rover Group as it became, were no exception to that rule. We were right to return the business to the private sector. There was only one conceivable purchaser and that was British Aerospace. There were no other serious bidders. The Commission has accepted that point. British Aerospace was prepared to pay £150 million for the business and that was a good deal for the British taxpayer.
Lord Mayhew: My Lords, are we to understand from the noble Lord's replies that in his view the Secretary of State kept Parliament properly and fully informed about this transaction?
Lord Trefgarne: My Lords, I have said on more than one occasion today that the appropriate procedures for reporting these matters to Parliament were complied with.
Lord Molloy: My Lords, is the noble Lord aware that this matter is only just beginning? It is not an issue about privatisation or nationalisation, or the squandering of funds by the publicly owned Rover Company. If the noble Lord were to read every newspaper in the country, including today's edition of the great London newspaper, the Evening Standard, he would discover the issues. He does not seem to be aware of it. It is the grave suspicion of appalling corruption and the interpretation of the word "sweeteners". Everybody knows what "sweeteners" means. The issue is not what he referred to—the failure of Rover. It is the manner in which the negotiation was conducted in the name of Parliament. If the noble Lord reads any newspaper he will discover that all are ashamed of what has happened. We, on these Benches, are too. The greatest shame of all is that the noble Lord opposite does not seem to have the slightest concern about the manner in which the whole transaction was conducted.
Lord Trefgarne: My Lords, the noble Lord opposite and his noble, right honourable and honourable colleagues are keen to draw our attention to circumstances where they think more money could be paid or money should not be saved. This transaction saved the British taxpayer thousands of millions of pounds and I am proud that it did so.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that those listening to these questions are shacked and horrified at the attempt by certain noble Lords opposite who happen to disagree with the transaction to make wild charges of corruption for which they have not a scintilla of evidence? It is utterly contrary to the principles and practice of this House to make them.
Is my noble friend further aware that those of us who have followed this matter know well that the Ministers concerned did what they believed to be right and in the interests of the British taxpayer with the highest motives and intentions? It is surely right that we should discuss the matter—if we do—on that basis and not try to confuse it with wild charges of corruption for which there is not the slightest basis in evidence and for which no evidence has been offered today.
Perhaps I may add, as the noble Lord, Lord Jenkins of Hillhead, is about to rise a second time, that I was a little amused at his reference to the pursuit of mammon. If, as Chancellor of the Exchequer, he had pursued mammon more effectively, the finances of this country would have benefited a great deal.
Lord Jenkins of Hillhead: My Lords, I cannot resist saying that as I was the only Chancellor of the Exchequer to achieve a surplus in 40 years, that remark is a little ill-directed.
However, leaving aside any wild charges—if they be that—of corruption, I should like the noble Lord to tell us, independent of the merits of the deal (which may or may not exist) why the Government and government spokesmen could not tell the truth before it was forced out of them?
Lord Trefgarne: My Lords, I believe that the discussions that we had with the Commission on this matter—about which I dare say the noble Lord will have heard, although he had left the Commission by that time—were entirely right and proper. Of course we have had a disagreement with the Commission on the matter. I do not for a moment deny that. However, there is nothing disreputable about having a disagreement.

Education (Student Loans) Regulations 1990
5.39 p.m.
Baroness Blatch Baroness Blatch rose to move, That the draft regulations laid before the House on 25th June be approved [21st Report from the Joint Committee].
The noble Baroness said: My Lords, these regulations establish the student loans scheme. They are framed in accordance with the Education (Student Loans) Act which we debated earlier this year.
Lord Boyd-Carpenter: My Lords, before my noble friend proceeds, will she indicate to your Lordships where an accurate and proper copy of these regulations is to be found? The copy I have, which I obtained this morning, is full of amendments of every kind, corrections simply inked in like a schoolboy's notebook. Coupled with that are several pages of typed riders.
Is the noble Baroness asking your Lordships' House to come to a decision on legislation, albeit secondary legislation, of great importance without having before it a proper copy of what it is being asked to approve? Perhaps she would comment on that or say why, if a proper copy is still not available, she feels it necessary to proceed this evening at all.
Baroness Blatch: My Lords, if my noble friend will bear with me, I should say that I believe that the copy he has is an accurate record although it has manuscript annotations. If he will bear with my initial presentation of the regulations, I shall make reference to the point he raised.
Baroness White: My Lords, from this side of the House I strongly support what the noble Lord said. During my long experience in both Houses I have never received at this stage a document put before the House which is difficult to read. There has been no opportunity to obtain a properly printed copy. I obtained my copy on Tuesday afternoon and I went back today with the firm conviction that by now a properly printed copy would be available. However, that is not the case.
Lord Boyd-Carpenter: My Lords, I hope my noble friend Lady Blatch will take this matter seriously. We are being asked to legislate. When one is asked to legislate one is asked to approve of some document, be it a Bill or a regulation, in the clear form in which it is to pass into the law of the land. Can my noble friend really say that this dirty bit of paper with inked-in corrections, deletions and amendments all over it and with two typed-in so-called riders is the form in which your Lordships' House should be asked to approve legislation? If a Minister cannot provide us with a proper copy of a proper document would it not be the responsible line to defer discussion until a proper copy is available, as I am sure it will be in due course?
Lord Peston: My Lords, it may be useful if we all make our complaints at one go so that the noble Baroness can deal with them. There is at least one part of the document which makes no sense whatsoever. At the top of page 2 a Part V appears, but it is as if that part is left over from another document. It does not appear to belong to this document. I was going to make the same point that the noble Lord, Lord Boyd-Carpenter, made, but he was right to raise this matter ab initio before we get involved in debating a document when that may be a complete waste of time.
Baroness Young: My Lords, perhaps I can help my noble friend, who has been put in an extremely difficult position. Like my noble friend Lord Boyd-Carpenter, I picked up a set of these documents

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yesterday and found them annotated. However, this morning I was sent a copy from the Department of Education and Science which appears to be perfectly printed. I am afraid I did not look further in the Printed Paper Office. I raise that matter only because I think my noble friend is in a difficult position. Properly printed copies must be available and perhaps they could be made available to your Lordships now.
Baroness White: My Lords, I have been to the Printed Paper Office within the last hour and they are not available there.
Earl Russell: My Lords, I wish to extend the point made by the noble Lord, Lord Boyd-Carpenter, to the 21st report of the Joint Committee on Statutory Instruments. In my opinion that is an extremely helpful document and has resulted in improvements in these regulations which I welcome. However, if I had been teaching this morning, as I might well have been, I would have known nothing of that report until I arrived at the House almost ready to speak. In future can the reports of the Joint Committee be made available a little sooner before we have to debate them?
Baroness Blatch: My Lords, at this moment I do not know why the noble Lord does not have today's copy of a completely perfectly printed copy of the regulations.
Lord Boyd-Carpenter: My Lords, I collected it this morning from the Printed Paper Office.
Baroness Blatch: My Lords, I am told it was available this morning. I have two copies here. The Joint Committee on Statutory Instruments which met two weeks ago to discuss these regulations was not quorate on the day it discussed them. That lost the committee one week. As a result of some modifications which we knew were to be discussed on that day—I shall refer to that in my presentation—these draft regulations were relaid in their correct form. I shall refer to the corrections in some detail. The typed-up notes that noble Lords have are the result of this week's meeting of the Joint Committee on Statutory Instruments. They relate in detail to the difference between the original regulations that were laid and the ones that are before your Lordships today.
Lord Peston: My Lords, I must interrupt the noble Baroness because I am now rather annoyed. Although I entirely agree with the noble Lord, Lord Boyd-Carpenter, in the end I tend to shrug and consider that we must soldier on as best we can, even though the document is absolutely scandalous. However, if a correct printed copy exists which the noble Baroness possesses while I, as the principal spokesman for the Opposition do not have one, I do not see why I should continue with this charade. This is an insult to the Opposition. I have been in your Lordships' House all day and every day this week, and I am certainly not willing to debate a matter where I want to discuss the considerable
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details of these regulations on the basis of not having a proper printed copy as the department did not even have the courtesy to provide me with one. I certainly will not accept one now. This is an appalling state of affairs.
Lord Boyd-Carpenter: My Lords, before the noble Baroness replies to that I must ask her again why, if there is a correct and tidy copy available—apparently one was made available to the noble Baroness, Lady Young,—it has not been made available not only to noble Lords on the Opposition Front Bench but also to other noble Lords who are interested in this matter. In a sense the fact that a proper copy exists but is not available makes the position worse. The noble Baroness should think further before asking your Lordships' House to consider an important matter in such a handicapped way.
Lord Kilmarnock: My Lords, does the noble Baroness accept that I have been in the Printed Paper Office within the last half hour, but the only thing I could acquire was the extremely defective and imperfect version of the regulations that was referred to by the noble Lord, Lord Peston? If we were to approve this draft we should approve on page 2—the noble Lord, Lord Peston, pointed this out—something which is entirely out of place. Part V appears to come before Part I. It is impossible to proceed on this basis.
Lord Graham of Edmonton: My Lords, would it not be helpful, in order to resolve this matter as amicably as possible, for the House to adjourn for a period of, say, 30 minutes? I know that would delay this evening's business, but if we continue as things stand at present there will be a great deal of animosity. If we adjourn for 30 minutes now, it may save us a great deal of time in total. I make that as a suggestion.
Baroness Young: My Lords, while this matter is being considered perhaps I may intervene once again. The reason I have my properly printed copy is that, having read the regulations yesterday, I telephoned the DES about one or two matters. My copy arrived this morning unsolicited. I certainly did not ask for it. I was sent it as the up-to-date copy. I am afraid it never occurred to me that it was not available in the Printed Paper Office. As I had obtained my own copy, I naturally did not seek to find a second one which I did not require. However, the proper copies must be available. I should have thought it would be possible to proceed with the business. I studied yesterday the copy which appears to be available. Anyone else who has done so will know what the content is and what the principles are as set out.
Lord Boyd-Carpenter: My Lords, the noble Baroness, Lady Blatch, appears to have been taken by surprise. However, as the Government Chief Whip was in the Chamber a moment ago, I think it only fair to say that earlier this afternoon I warned him about this point.
Baroness White: My Lords, might we not adjourn during displeasure?
The Minister of State, Home Office (Earl Ferrers): My Lords, perhaps I may be able to help on this matter as I see that the House is concerned about it. There is nothing more infuriating than feeling that one does not have the correct papers. As I understand the position, the papers that are in the hands of noble Lords, albeit with some manuscript amendments, are the correct papers. The proper papers were printed overnight and there is a limited number available in the department. I cannot tell your Lordships why they are not in the Printed Paper Office However, that is obviously a matter of great concern and we shall have to discover the reason for it. As I understand it, the papers before your Lordships are the correct papers although they contain manuscript amendments. I suggest that those papers should be the basis for the debate. I shall take it upon myself to discover precisely why the proper papers are not available to your Lordships this afternoon.
Lord Boyd-Carpenter: My Lords, the noble Earl is helpful, as ever. However, he does not appear to appreciate, as he would if he were to look at the document, that, although it may be alleged to be accurate, it is extremely difficult to understand or to follow. It is difficult to be sure what each inked-in amendment means and what it relates to. The noble Earl must appreciate that it is difficult to debate an important order without a properly completed document for us to consider. If copies are available within the department there is a great deal to be said for sending for them.
Lord Kilmarnock: My Lords, the noble Earl the Deputy Leader of the House has told us that it is only a question of manuscript amendments. What about page 2? At the top of the page is Part V and the heading "Higher Education Institutions: Duties". Beneath that is subsection 11 dealing with duties of governing bodies in relation to loans. Then there is a schedule. All of those come before Part I and the general proposition of the regulations. Is that also correct?
Baroness Blatch: My Lords, the printed version which most noble Lords have in their hands today has been available in the Printed Paper Office since Monday. Since then some modifications have been made following discussion between the department and the Statutory Instruments Committee. Noble Lords have a detailed memorandum on that document, complete with manuscript amendments. Since then the document has been reprinted and that is the document which was not available to all noble Lords.
I believe that all noble Lords have in their possession sufficient information for the regulations to be discussed today. In addition to having a two-page explanatory memorandum, in my speech I shall refer in detail to the difference between the regulations as originally laid and the regulations as amended as a result of the Statutory Instruments Committee's meeting on Tuesday.
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I am in the hands of the House as to whether the regulations should be received today. My very strong recommendation is that there is sufficient information in your Lordships' hands to do so.
Lord Callaghan of Cardiff: My Lords, I thought that the noble Baroness had risen to respond to the noble Lord, Lord Boyd-Carpenter, by saying that, as the Department of Education and Science is on the other side of Westminster Bridge, a taxi was already speeding across the bridge with printed copies and that we should adjourn for 20 minutes to enable them to arrive so that we could proceed. Why does she not say that?
Baroness Blatch: My Lords, I shall propose to the House that I accept the suggestion from the acting Chief Whip on the Opposition Benches that the House should adjourn for 30 minutes while the matter is discussed.
Lord Blease: My Lords, although the regulations deal with England, Wales and Scotland, there are strong implications for Northern Ireland. I have received documentation from the Committee of Vice Chancellors and Principals. I have also received a briefing from Northern Ireland. I want to put on the record that that suggestion does not suit me and I shall not be able to present my case when the House resumes.
Lord Belstead: My Lords, I apologise to your Lordships that I was not in the House when this exchange began. I should also like to say to the noble Lord, Lord Blease, that he has an important point which ought to arise in the substantive debate.
Perhaps I may pick up the suggestion of the Opposition acting Chief Whip and the noble Lord, Lord Callaghan, and, as my noble friend Lady Blatch proposed, suggest to your Lordships that the House should adjourn during pleasure, unless any of your Lordships feel that that is wrong. I therefore beg to move that the House do now adjourn during pleasure for 30 minutes.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 5.53 to 6.23 p.m.]
Baroness Blatch: My Lords, noble Lords will now have in their hands a clear copy of the regulations. In content the printed copy is identical to the version laid in the Printed Paper Office on Monday and considered by the Joint Committee on Statutory Instruments on Tuesday. I hope that this copy is easier for noble Lords to use.
These regulations establish the student loans scheme. They are framed in accordance with the Education (Student Loans) Act, which we debated earlier this year. I shall describe in a moment what the regulations contain; but it may be helpful if I also make it clear what they do not contain. They do not affect the availability of social security benefits for students. They relate only to loans. They have no implications for benefits one way or the other.
We have recently debated the issue of social security benefits for students in the context of the

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Social Security Bill. That Bill has yet to complete all its stages and it will be debated further in this House. In the light of Parliament's final decisions, the exclusion of students from benefits, if it is to go ahead, will then have to be implemented by making regulations under the Social Security Acts of 1975 and 1986. I repeat an undertaking I gave earlier in the context of another Bill; namely, that those regulations will not be laid until the passage of the Social Security Bill has been completed.
Those regulations, if made, will of course be subject to parliamentary scrutiny. And it may reassure your Lordships to know that our intention is that regulations excluding students from benefits should be subject to the affirmative resolution procedure.
For those of us who took part in the debates on the student loans Bill, the draft regulations now before us will contain few surprises. They implement policy already announced by the Government in the 1988 White Paper and in the debates that followed.
As we said from these Benches when we debated the Bill, it will be more important to be able to refine the scheme in later years. But the general approach is established in this first set of regulations. We agreed earlier that they should accordingly be subject to affirmative resolution. I welcome the opportunity to lay them open to your Lordships' scrutiny now.
The draft regulations set out the detailed eligibility criteria for the loans scheme. These are parallel to the criteria for the mandatory award, but are deliberately drawn rather wider. The regulations also set out the amount and terms of the loan. They specify that the amount outstanding will be indexed to inflation, so that interest in real terms is not charged. They set out the repayment period: five years, or seven years for those who follow the longest courses. They determine the deferment and cancellation arrangements that will protect graduates whose income is not high. Finally, they specify the task of the higher education institutions in confirming that their students are eligible for the loan.
Your Lordships may have noticed that the draft before us today differs in some ways from the draft first laid for approval on 13th June. We have added separate protection for disabled borrowers and clarified both the position of minors receiving this form of student support and the role of higher education institutions. Let me explain those changes in more detail.
The regulations include the provision that we announced earlier for disability-related benefits to be disregarded when income is computed for deferment purposes. This means that disabled graduates in receipt of these benefits will be able to claim deferment on higher incomes than their able-bodied peers.
In framing the regulations, we have concluded that we should provide the option in Regulation 8 for the Student Loans Company to allow disabled people a longer grace period before they start repaying, or a longer period over which to complete repayments. The circumstances of disabled borrowers will no
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doubt vary greatly and we have yet to decide how that discretion will be used. Repayments will not begin until April 1991; these decisions can be taken in good time for that. But it is important that the option should be inserted now.
Secondly, we have made a technical amendment which clarifies the position where a loan is taken out by a student under 18. Under contracts governed by Scottish law a minor should obtain the consent of his curator—in most cases his parent or guardian—before entering into a contract. Only if he obtains such consent, or was already independent of his family when he entered into the contract, may he validly ratify that contract on reaching his majority. The new Regulation 3(3) acknowledges that position.
The Government have consistently taken the view that students under 18 on higher education courses should be eligible for loans. The regulations allow for that. We shall expect such students to repay after their courses on the same basis as other borrowers. To facilitate this, the general intention is that such students, once they reach 18, should ratify their previous loan contract before being entitled to a futher loan. This is important to protect the interests of the taxpayer.
The third change affects the role of higher education institutions. In assessing their students' eligibility for a loan, the institutions will need to determine whether they meet the residence requirement, which is the same as currently applies for the mandatory award. The regulations now make it clear that the institution is required to inquire into the student's residence history only so far as is reasonably practicable. That will ensure that eligible students have access to the loan without requiring the higher education institutions to go into the matter exhaustively where the residence history is not straightforward.
The amendment has a consequence for the requirements placed on higher education institutions in certifying their students' eligibility. In the previous draft there was an unqualified requirement to certify the accuracy of the information. The requirement is now to certify its accuracy to the best of the institution's knowledge and belief.
These amendments to the requirements placed on higher education institutions follow a series of meetings and seminars around the country, to which all institutions providing eligible courses have been invited. There have proved invaluable in allowing the Student Loans Company and the department to refine their procedures. They augur well for the smooth introduction of the scheme in the autumn. I am glad to pay tribute to the co-operative spirit of the administrators in the higher education institutions, who are professionally discharging their rôle of ensuring that their students have access to this new source of support.
We believe that the loan scheme is a necessary precondition for the further expansion of higher education that we all desire. With zero real interest and deferment and cancellation if income is low, our scheme offers students more money on very favourable terms. The regulations before your

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Lordships are entirely consistent with primary legislation and with the details as set out in the course of our debate on the Bill. I beg to move.
Moved, That the draft Regulations laid before the House on 25th June be approved. [21st Report from the Joint Committee]—(Baroness Blatch.)
6.30 p.m.
Lord Peston: My Lords, I thank the noble Baroness for her statement. I shall be obliged to speak on these matters at some length. That is inevitable with such legislation. The Education (Students Loans) Act is an enabling Act for which the regulations are of the essence. In addition, I am allowed to speak only once. I intend to concentrate my remarks on the regulations. I shall not go into other extraneous matters.
In my opinion the regulations in so far as they correspond to the Act as it was passed into law, do so in as limited a way as possible. Many of the concessions that noble Lords asked for on the face of the Bill, which were rejected by the Government, could have been introduced by regulations, but have not been. There has been no extension of the scheme to some or all postgraduates. There has been no modification of the payment obligation to graduates who enter work of national importance. There has been no help to women graduates who stay at home with their families. The concessions to the disabled, although welcome, are about as grudging as they could be. They relate to deferment of repayment, but no more. The list of what the Government could have done by regulations but have not done, is endless.
As was predicted, what has been let loose is an administrative nightmare. I saw today the basic pack of material that has been sent to the universities. Apart from what I believe is technically called the multipart form which has to be filled in, it includes an eligibility questionnaire about which I believe we were not warned when we debated these matters—if we were, I missed that—and which certainly adds to bureaucratic cost.
Apart from the primitive nature of these forms, which are not easily amenable to electronic processing, we must also note the time involved. It is worth emphasising that the institutions will be responsible for handing out those forms. As I understand it, the forms are being treated as a matter of security, probably for very good reasons, but that certainly does not lower the cost. The institutions are responsible for ensuring that they are filled out correctly. They are responsible for certifying eligibility. In that regard the noble Baroness answered one question that I had in mind. However, she may wish to state it more clearly when she replies. The question is: what is the legal liability of institutions in this regard? Do I now understand that, so long as the institution states that it has done the best it can in the circumstances, it has no further legal liability whatever, either to the Government, or—and this is very important—to the students?
On the question of costs, having seen the forms this morning, my view is that at best the average time per student to fill out a form will be a quarter
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of an hour. Therefore a university or college such as mine with 4,000 students will be confronted with a minimum of 1,000 person hours or 25 person weeks of direct labour input plus a good deal of additional input and of course overheads. To pay £3·50 per student in my view is not to meet the cost. Thus, the Government appear to be going back on their pledge that, while they did not wish to sign an open-ended cheque, they would pay a fair and proper price. Perhaps I may quote the exact words of the noble Earl, Lord Caithness, when under considerable pressure from several noble Lords who are present tonight. He said at col. 1013 of Hansard on 29th March:
"Your Lordships have a commitment from me that the Government will pay the money".
At col. 1014 he stated:
"What the Government are willing to do is obviously to meet the reasonable costs of this scheme".
On another occasion he stated in answer to the noble Lord, Lord Renton:
"It is a question of getting the matter right. I put it to your Lordships that the best way of getting it right is to have a commitment from the Government that they will meet the costs".
I have to say—and this is in no sense an accusation of bad faith against the noble Earl, Lord Caithness; I speak now of the Government—that in my view those pledges have simply not been met.
Instead what appears to have happened is, as many of us feared, that the department has used its bargaining power to squeeze our higher education institutions. Resources that ought to have been deployed on the proper functioning of those institutions—I remind noble Lords that that is not to administer loan schemes but to teach students to engage in scholarship and research—will clearly be diverted to administering the loan schemes.
I must raise another point on that connection. I understand that universities and colleges have been told that they must not act as agents in promoting the loans. In administering these regulations, it appears that they must not even offer advice to students or answer such questions as, "Should I take out this loan?" As I understand it, if a tutor or an administrator involved is asked that question, legally the student is to be told, "I cannot advise you on that matter because of the legal consequences." As I understand the situation, it is not even clear whether putting up such notices as, "Remember to go to room such-and-such for your eligibility questionnaire or loan form", is legitimate.
I shall refer to only a few detailed points because other noble Lords wish to speak and it would be quite wrong of me to hog all the detailed criticisms. However, although not covering them all, it does not mean that I am unaware of them. Perhaps I may draw the attention of noble Lords to some matters that they may find disturbing. For example, a student who does not have a bank account or building society account, simply on that basis, will not be allowed to have a loan. The form states clearly that he has to give such an account number. I believe that the regulations state the same. I am all in favour of students having bank accounts. But the idea that they must have bank accounts, even if they do not want them as a matter of principle, seems to be going a little far.

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The point goes further and I must draw your Lordships' attention to paragraph 7(4) of the regulations. It states:
"Repayments shall be made by direct debit from the borrower's bank or building society account unless the loans administrator agrees otherwise."
Again, that appears to be pushing it a little bit. Most people ask at least: "Do you wish to have direct debit?". To be told, "That is what you are going to have unless I agree that you should not", is going too far. In order to arrange for a direct debit, one must have a bank account. The relevant account may be a joint account and it is not obvious that the joint holder will accept the arrangement.
I shall come to a more serious matter in a moment, but I have one other point to make about the detail. Paragraph 7(5) states:
"Nothing … shall be taken to prevent a borrower from reducing or discharging his liability in respect of his loan with the agreement of the loans administrator … where a borrower wishes so to reduce or discharge his liability … shall be determined by the loans administrator".
That requirement is also a little tough. A student who has taken out a loan and says simply that he wishes to repay it should not need to have any agreement about that. In any event, I believe that on grounds of economic policy the Government should welcome it and the matter should be straightforward.
Those are one or two points of detail. I have many more which I hope other noble Lords will raise. In the light of what happened an hour ago, it is with a certain amount of trepidation that I turn to the central question that worries me. It is whether the regulations are faulty. Noble Lords will recall that in my opening remarks about the regulations I used the words "in so far as they correspond to the Act". The question is: do they correspond to the Act? I then said that with so much written in longhand, they show every sign of being done in a hurry and at the last minute. The fact that I now have a copy that is not in longhand is irrelevant because I am as yet unable to make use of the copy.
Schedule 2 paragraph 1(4)(b) on page 5 of the Act states:
"the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms".
Noble Lords will recall that we debated the issue at great length on more than one occasion. What is meant by the phrase "maintaining that amount in real terms"? In other words, what is meant by a zero real rate of interest? It means that during the period of the loan the principal is repaid in real terms. (I wish I could now use a blackboard, but I shall try to do my best without one). If over three years the inflation rate is X per cent. for every £100 borrowed at the beginning, the correct repayment is (1 + X) cubed times £100 at the end of the three years. That is what is meant by maintaining the amount in real terms.
The regulations are different because they use the retrospective inflation rate. For example, they state that the inflation rate, which becomes the interest rate as it were, for the first period of the loan, will be the inflation rate up to June 1990. Therefore, for
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the first 100 borrowed now, the repayment will be one plus the inflation rate up to June 1990, times one plus the inflation rate up to June 1991, plus one plus the inflation rate up to June 1992. Any economist will say that that is perfectly all right provided the inflation rate is constant. It then amounts to exactly the same formula that I have given. However, if the inflation rate is falling, given this scheme, then one will be repaying at a positive rate of interest. In other words, if the inflation rate is falling, one will be infringing the provisions of the Act as set out.
We all hope that the inflation rate will fall. Therefore, the position is even worse; not only are the regulations faulty, but they will turn out to be incorrect in practice. My view is that that is a matter of the utmost seriousness. However, I have a second problem. As regards repayment, paragraph 7(3) of the regulations states:
"On the date mentioned in paragraph (6) in each year the amount of the monthly repayment shall be calculated by dividing the aggregate amount of the loan outstanding at that date (including interest added during the preceding twelve months) and of interest which will accrue during the remaining period of payment",
and this is the key phrase,
"(on the assumption that the rate of interest will not change during that period)".
That is what the regulations provide. The key phrase is:
"(on the assumption that the rate of interest will not change during that period)".
However, in this context the rate of interest is the inflation rate. Another way of reading the provision is:
"on the assumption that the inflation rate will not change during that period".
One thing that we know about the inflation rate in this country is that it fluctuates. At present, we are all hoping that it will fall; but anything may happen. If the monthly rate of repayment is based on constancy, that formula, given the inflation rate changes, will mean that the student will repay too much or too little. It means that an adjustment will be necessary. But, unfortunately, there is not a word in the regulations about adjustments. Therefore, for the second time the regulations are flawed.
I have taken legal advice about the matter. I have been assured that regulations must correspond to the provisions of the Act of Parliament that they seek to bring into practice. I have described two parts of the regulations which demonstrably show beyond any peradventure that they do not stand up and are flawed. Indeed there is no doubt about the zero real rate of interest as mentioned in the Act.
I now look straight at the noble Lord the Leader of the House because—and this is where my difficulty arises—I believe that in the circumstances the Government should stop at this very minute, go away and bring back correct regulations that correspond to the Act of Parliament concerned.
6.45 p.m.
Earl Russell: My Lords, I thank the noble Baroness and the noble Lord the Lord Privy Seal for the consideration and courtesy with which they dealt

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with an awkward situation. However, I was slightly strengthened in my growing suspicion that the initials DES stand for "Department of Ethelred the Second". Some of your Lordships may remember that he was commonly known as the Unready.
I welcome the changes. It is better to have them late rather than never. They improve the regulations, although in some respects not as much as we might have hoped. I wish to express my gratitude to the noble Baroness, Lady Young, for her efforts to obtain the affirmative procedure. It is of great value.
On this occasion it would be entirely improper to open up the principle of any of the provisions in the Bill. It would be entirely improper to open up any of the issues upon which we divided during the progress of the Bill and which, therefore, are res judicata. It is a fact that we have student loans and therefore we are concerned only to make the scheme as good as possible.
There is one major question which we are now able to address for the first time in the appropriate place; that is, whether a sufficient amount of money will be provided. We are in some difficulty in addressing that question because, as the noble Baroness reminded us, we do not yet know what will happen to our amendments on the Social Security Bill.
However, having read the interview given last week by the Parliamentary Under-Secretary, which I was amused to notice in my college's student newspaper, I am not very optimistic as regards those amendments. Therefore, we should discuss this matter on the hypothesis that this is all the money which is available. I do not believe that it is anywhere near enough.
In discussing this matter, I shall rely on London evidence because I wish to speak of matters which are within my knowledge. On that basis I wish to ask one specific question about Regulation 5(1) concerning the area eligible for the London extra rate of loan. The regulation states that the student must be attending a course within the Metropolitan Police district or at the University of London. Am I right in construing the disjunctive effect of that as making Royal Holloway and Bedford New College, which is part of the University of London and functions as such, eligible for the London rate of loan? That point is of considerable importance inside the university.
In using London evidence, I do not intend to imply that this is only a London problem. I listened to the remarks of my noble friend Lord Addington, the noble Baroness, Lady Faithfull, the noble Lord, Lord Sherfield, and others, on regional housing costs outside London. I am ready to believe that the problem which I am delineating covers the whole of the South East and other areas where housing is expensive; for example, at the University of Edinburgh. In speaking of what I know, I do not wish to imply that the problem does not exist elsewhere. I believe it does.
As regards the available figures, the Government have relied quite heavily on the survey of students' income and expenditure carried out by Research Services Limited. There is one major flaw in that
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survey; namely, that it under-rates considerably the amount which students have been drawing in social security benefits. I shall not go into that now because I imagine that there will be a future occasion on which to do so.
The other flaws in the survey are that the field work on which it depends is out of date. It was carried out between February and June 1989 and the Government are relying on information gathered at that time. The rate of inflation since that time has been a great deal larger than the rate of grant increase—9.7 per cent. against 5 per cent.
Secondly, the field work took place before the rise in rents as a result of the Housing Act 1988. Among my pupils it is in the region of 20 per cent. A further effect of the Act is that a good many landlords are now demanding rent for nine months of the year. Otherwise, they make a loss. The Government may say that that should not happen but they have vigorously supported a free market in housing. That is one of the consequences. In a free market one cannot expect landlords to function as a social service. If they can obtain more money by letting property for the whole of the year, then they will do that. Therefore, there has been about a 20 per cent. increase in rents since the survey and a demand for rent for a longer period.
We have also the current London Transport fare increases. When my noble friend Lord Tordoff asked whether those increases were inflationary the noble Viscount, Lord Davidson, replied, "Yes and no". I now understand what the noble Viscount meant. The increases are inflationary for the students but not for the Department of Education and Science.
Another problem spotted by Research Services Limited in the survey is declining parental contributions because of the ceasing of deeds of covenant. That should have been expected. Finally, except in Scotland, the survey was carried out before undergraduates had to pay the community charge. For all those reasons the Government's information is inaccurate.
Let us look at some figures. I take mine from undergraduates whom I am teaching. For London the grant is£2,650 and next year the loan will be£460. I trust that I shall be forgiven for taking this year's rate of grant because I am taking this year's expenses. It is wildly improbable that next year's grant will increase faster than expenses.
Taking a budget of 40 weeks, a typical undergraduate pays £2,000 rent. That is £50 per week—the sum that most students pay. To travel in from fare zone 2 on four days a week costs £240 per year or from fare zone 3—about 25 per cent. of students living out travel in from that zone—£408 per year. I am told that most students manage on £10 to £15 per week for food which is not very much. If one takes a figure of £12.50, that comes to £375. Travel home three times per year is very difficult to average, but I have made an estimate of £100. The poll tax in London is usally about £100. That comes to a total of £2,815 out of a total sum available of £3,110, leaving £295 per year for all other expenses. If that is calculated over 30 weeks, one arrives at a total of £9.83 per week. That allows nothing for

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books or for travel home one weekend during term. That is at least £400 short. I expect others to have comparable figures.
We have to consider the problem of the vacations. When we were debating the Social Security Bill, the noble Baroness, Lady Blatch, said that students should be construed as having withdrawn from the labour market. There is a strong academic case for that. I wish they had. However, on those figures, students cannot afford to withdraw from the labour market. It is not financially viable. If one divides that figure of £295 by 52 weeks, it comes to £5·67 per week. That is probably less than many students received as pocket money when they were 12 year-olds.
That brings me to the problem of undergraduates working during term time. A very casual and off-hand allusion to that appears in paragraph 3.25 of the White Paper. My noble kinsman Lord Henley, in his letter to me dated 15th June, which is deposited in the Library together with my reply to it, said that many students find work during the vacation and some during term time. I should like to ask the noble Baroness whether she can tell me that it is not government policy that students should work during term time.
In this country we have three-year courses. We get through about as much work in three years as an undergraduate at Yale gets through in four years. However, that is only possible because hitherto undergraduates have been able to concentrate full time on academic work. Should that cease to be the case, we must either demand a fourth year which will be extremely expensive for the Government or we must devalue the standard of the British degree which, of course, competes in an international market. If we were to have a situation where those who want the best degree for their children have to send them to Harvard or Yale at a cost of 80,000 dollars over four years, I should not envy the Secretary of State the job of explaining that situation to the Conservative Party conference.
The noble Baroness will doubtless say that public money is limited. Of course it is; but I do not believe it is quite as limited as she thinks. I am certainly not suggesting that it is possible to have overall increases of public spending at the percentage levels that would be needed to bring the allowance up to a living subsistence. However, the Government being short of money does not make it any cheaper to be a student. The Government must cut their coat according to their cloth. It is a wasteful way of handling public money to give it out in a form which is insufficient for everybody, so that people cannot stick to their work, have to earn money and cannot do the job properly. That is not frugality; it is Micawberism—hoping that something will turn up.
The Government must decide how much money they can spend and enrol no more students than that amount of money will support. In our system of allocating public spending we do not cut our coat according to our cloth. We have a series of competing bits, all of which get scaled down and none of which therefore gets done properly. I was delighted to see
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my right honourable friend Mr. Ashdown writing in The Times Educational Supplement last week that this matter needs urgent attention.
I shall not detain the House for long on the other points I wish to raise. The question of compound interest concerns me because I have always worried about the effect on married women who choose to stay at home with children, as they have a right to do, and wish to return to work around the age of 45. They may have worked for five years without reaching the level which made them eligible to repay their loan. I remind your Lordships that the starting salary for a university lecturer is now low enough to be eligible for deferment of a student loan.
If one wants to return to work at 45 and has a large debt, it may be thought to be in one's interest to defer returning to work until the age of 50 so that one does not have to repay that debt. As the noble Baroness, Lady Phillips, knows very well, there is age discrimation in employment and therefore it is not always as easy to go back to work at 50 as one would like. That provision may therefore have the effect of excluding some highly qualified people from the labour market.
On the subject of four-year courses, we voted on an amendment tabled by my noble friend Lord Addington that there should be no repayment for the fourth year. That is not what I am proposing. I am asking that the deferred repayment terms for five-year courses be extended to courses of four years. The last we heard on this point was when the noble Earl, Lord Caithness, said that he would think about it. I am sure that he did. I shall be interested to know the results of those thoughts.
I shall touch on two points which are not in the regulations but which cause me considerable anxiety. One is the question of how promptly the loans will be paid. That is vital to undergraduates. They have no safety margins. For example, if they deal with the kind of regime there has been in the London boroughs of Brent and Ealing—I am delighted it is no longer in place—they may find that they are borrowing large sums of money because the loan comes to them late. We have not yet had an adequate answer to the fears expressed by my honourable friend Mr. Hughes in another place that the Student Loans Company does not have enough staff to pay quickly enough.
I have not heard anything adequate regarding the scheme for recovery of the money. The scheme will save public money only if the money is recovered. My father-in-law used to say that one's importance is known by how long it takes for one's mistakes to become apparent. This mistake may take 15 years to become apparent. By that reasoning the Parliamentary Under-Secretary of State is a very important man indeed!
Baroness Young: My Lords, before my noble friend responds to the speeches that we have heard I should like to say how grateful I am that the amendment we had to the original Bill, allowing the regulations to be taken by affirmative resolution, was agreed to by the Government because it is valuable to have this further discussion. I should again like to place on record my appreciation for that.

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I should also like to take the opportunity, as we had a slightly chequered start to this debate and as my noble friend Lady Blatch may not feel able to do so, to say that I am certain that no discourtesy was meant on her part to anybody in the House. I am certain that I can speak also for my right honourable friend the Secretary of State and say that certainly no discourtesy was intended on his part.
As other noble Lords have said, I do not feel that it is right to go over all the arguments that we had on the Bill. They were very extensive and well rehearsed. What is encouraging is that student numbers in higher education in this coming academic year are expected to be around 1 million in one form or another. That compares with just over three-quarters of a million students in higher education in 1979. That is a fact which is to be welcomed because we all want to see a better educated population and recognise the importance of that. In a way it illustrates the problem which the student loans Bill is designed to meet. Clearly, with an increase in the numbers of students it is important to tap a new source of support.
Listening to my noble friend Lady Blatch in her opening remarks I was glad to welcome the amendments that she drew to our attention, which are in the regulations. They meet some of the anxieties that staff of universities and other places of higher education had regarding the administration of the scheme. However, there is one specific point that I should like to raise with her. The regulations refer consistently to universities, whereas some universities are collegiate universities. That is a point which needs to be clarified. When my noble friend responds to the debate I hope that she will be able to clarify that point.
We are entering a new world at the start of the academic year. I was glad to hear my noble friend say in her opening remarks that there have been a number of discussions and seminars with universities and institutes of higher education regarding how the Bill will work. From what has been said it is important that we have the smoothest possible running of the scheme. On the introduction of any new scheme there are invariably some teething troubles, but a lot of matters are best resolved not across the Floor of the House—we can do no more than lay down general principles—but in discussions where these points arise.
I should like to say to my noble friend and her colleagues that I hope there will be the closest possible co-operation both for the Student Loans Company and for the institutions of higher education over the administration of the scheme. I hope that the Government will not hesitate to amend further regulations in the light of how they are working so that we obtain a sensible solution to a number of the problems. That will be greatly welcomed and I am sure it is something the Government would like to see.
We are now at the end of a very long discussion on this matter. I support the principle of student loans. We already see in the regulations some amendments to make them work better. I hope that we shall see their smooth introduction in the new academic year.
7.10 p.m.
Baroness White: My Lords, I wish to reinforce some of the points made by my noble friend Lord Peston, but in particular to stress the gravity of the problems which face university administrative staffs. I consulted this week with officials of the Committee of Vice-Chancellors and Principals. I have also made inquiries of the appropriate officers at the University of Wales at Cardiff with which I am familiar. They face a daunting prospect at Cardiff of trying to make the scheme work for upwards of 8,000 students this coming October.
We have been told that the Department of Education and Science did not trouble to consult the officials at the CVCP in advance about the details of the draft regulations before us. Had they done so they might have learned something more about the hard facts of university administration.
I was left with the suspicion that the officials at Elizabeth House who drafted these regulations have never actually seen a UCCA form which, as most of us know, is the application form for admission—at least, outside Oxbridge—for most university students. A good deal of the information which will be required for student loans is in fact to be found on the UCCA form, but this apparently has not been discussed at all by those who will be most concerned about administering the loan scheme.
It is perfectly true that the last minute amendments which we received, at first in manuscript and now decently printed, bring in the concept of what is reasonably practicable. That undoubtedly is a very helpful addition to the Bill, but it does not go very far. To expect hard-pressed officials to turn their minds now to working out both the loan scheme and the access fund administration—which is not before us in the regulations but which, nevertheless, is very much in the minds of university administrators—between July and October is quite absurdly impracticable and, to my mind, grossly unfair to those concerned.
The academic registry with which I am familiar is working at present at full strength at maximum capacity, and will be doing so between now and the autumn. It is the most strenuous period of the whole academic year. Examinations are only just concluding. The conferment of degrees for several thousand students have to be arranged in July. In August, the pressure of sorting out admissions builds up as school examination results become available. In September, the referred students have to be dealt with and various individual student admission problems have to be sorted out; and, come October, the new entrants are there on your doorstep.
No firm information has so far been available. No one knows for sure what extra staff will be needed, especially for this first year when returning students, as well as the new entry, will be eligible for loans for the first time. It is a far heavier operation this year than it is ever likely to be in the future. The prospect of simultaneously having to set up a mini-social service department for the access funds is regarded as an additional nightmare by the academic colleagues to whom I have been speaking this week.

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The CVCP has set up a working group to advise, under the chairmanship of Mr. Newcombe, registrar of Essex University, but so far this group have not felt themselves to be in a position to offer any detailed advice at all, nor have they worked out any scheme for assessing how far the proposed £3.50 per eligible student will cover the true additional expenditure which will fall upon university funds.
It seems to me that a compatible scheme to be adopted by all the universities is essential, if reliable estimates are to be made of the true administrative costs to the universities, as opposed to the administrative expenditure of the loans company itself, but no such scheme so far appears to be forthcoming. If it is not put in place for this coming autumn, there will be no evidence on which improvements in this scheme can be based in the ensuing year.
The access fund administrative costs, as I understand it, are to be subsumed in the Universities' Funding Commission awards, in the sums made available to the university. They will not be separately costed, so I am told. Who is to know whether they will really be met? No one whom I have consulted believes that the true costs of the access scheme will be covered for the university.
What I am really saying is that to press on with implementing by October the regulations which are in draft before us now will, on any informed judgment, result in pressures and errors which will inevitably sour relationships and cause much confusion and a good deal of unhappiness both to staff and to students.
I am not discussing the merits of the student loan scheme per se. We have gone through that process and we are not discussing that now. What I am discussing are the realities of trying to make the scheme work in the time which is now available. I suggest to your Lordships that this is a classic example of more haste less speed.
7.17 p.m.
Lord Kilmarnock: My Lords, practically all the points have been made which need to be made, but the general point remains that the detailed administrative procedures set out in Part V are quite unnecessarily cumbersome. The noble Baroness, Lady White, has already referred to the existence of the UCCA form, on which a great deal of this information is to be found, so why a wholly different process of an eligibility questionnaire is necessary I do not understand.
On a point of detail which puzzles me, paragraph 4(e) states:
"in the case of any other person except a refugee, his passport (if he holds one), and a letter or other document issued by a responsible person which contains particulars of his date, place and country of birth and his names at birth."
Is it really necessary for university authorities to have to check both the passport and the supporting letter, when all this information would have had to be given to the passport authorities in the first place, in order to obtain a passport? That is one instance of the proliferation of unnecessary detail for which, as we
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have heard from a number of speakers, there does not appear to be adequate financial provision. Surely we can get rid of nonsense like that and streamline all the requirements in Part V. It is only a minor point, but if all these minor points were taken together they would add up to a very considerable workload. If we can eliminate them as unnecessary, that workload would be reduced.
I entirely agree that we are very grateful to the noble Baroness, Lady Young, for the amendment which made it possible for us to debate these draft regulations under the affirmative procedure. But it will not be a great deal of good unless the Government seriously take on board what is being said, monitor all the points being made and make changes to get the whole procedure working better.
Lord Butterfield: My Lords, perhaps I may intervene briefly. I promise that I shall try not to keep the noble Baroness, Lady Young, too long from her evening meal.
When I first spoke on this issue, my son-in-law, who is a strong member of the Conservative Party, told me that he had heard in certain quarters that my speech had been regarded as singularly unhelpful. I hope that the noble Baroness, Lady Blatch, will not feel the same about my remarks this evening. She mentioned that she might go to Edinburgh to see the administrator of the loans scheme. I should be grateful if she would ensure privately that he realises what the noble Earl, Lord Russell, indicated; namely, that quite a proportion of our students are very hard up and that the speed with which they obtain their loan money is an important factor. Their state of wealth is often judged by the clothes that they wear which come from Oxfam. Certainly, there are few reasonable dinner jackets visible on the streets of that former centre of elegance and privilege—Cambridge—in the summer. I am sorry that we have not found a system that provides a grant to all freshmen so that they can have a taste of university without feeling inhibited about trying it.
There are aspects of the regulations that are irritating. I am anxious that the income level for repayment should be adjusted according to inflation. That is the level at which people will have to start repaying. If, after a few years, £965 a month is down in purchasing value, we may find ourselves asking people who are pretty hard up to make repayments.
Equally I wonder whether there may be a case for allowing the maximum loans that students can raise to be corrected for inflation. As some of them are hard up, I do not want the additional loan of £330 a year if they reside at home or £240 if they reside elsewhere to be too little to make the kind of improvement in their living circumstances that we all want to provide.
I have one final—not completely light hearted—point to make. I offer it to the noble Baroness as a factor ameliorating some of the difficulties of university administrators. When I was master of my college, I was keen that the last cheque that an undergraduate paid should be photocopied by the bursar's office. If we had his or her bank account number and branch from the cheque, and

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at some time in the future we had to make an appeal, that information might be extremely helpful in tracing the person concerned. Colleges may be quite pleased to have an official reason for recording that information, although it is likely that the better off students will not provide us with it because they will not think of raising a loan.
Baroness David: My Lords, I agree with the noble Lord, Lord Butterfield. Many students are hard up, but I shall refrain from commenting on their dinner jackets.
I have two important points to make on behalf of my noble friend Lord Blease. First, the regulations relate to England, Wales and Scotland. My noble friend is anxious to know what will happen in Northern Ireland. He has received a letter from the vice-chancellor of Queen's University, Belfast, who is anxious, as are many other people, about the trouble that they will have in dealing with the administration. They want to know how the scheme will operate in the interests of economy and efficiency. My noble friend is sorry that he cannot be here. I undertook to make the points on his behalf.
I wish to mention also the lack of eligibility for loans of anyone who has attained the age of 50, as stated in paragraph (2) of Part II. Perhaps I may refer to a letter from a colleague who started a course after the age of 50, received a grant for a year and hoped to be able to continue the course. He then discovered that the grant was not to be increased and that he was not eligible for a loan. Surely, that is manifestly discriminatory and unjust, particularly to a student who, having completed a least one year of a degree course prior to the introduction of the scheme, had every expectation of receiving either a grant that kept pace with inflation should the Bill be thrown out or taking advantage of an unhappy loan system should it become law. It is hard that people who have started courses with certain expectations should be disappointed. My colleague says that he plans to seek a judicial review.
I thought that it was well to make the point so that the Government are aware of the very justifiable dissatisfaction of those who started courses in the expectation of a grant or loan and, with that expectation gone, are left with nothing to take their place.
7.26 p.m.
Lord Addington: My Lords, I rise briefly to follow through a couple of the points which were initially raised by my noble friend Lord Russell.
The question of the new structure of funding—the loan and the top-up grant—being not enough to live on is an issue on which I spoke at considerable length during our debates on the Bill. It was my experience that most people were totally dependent on social security payments of various kinds to make ends meet if they were on full grant and they lived in the south-east of the country or in certain more expensive parts of Scotland. Edinburgh was the worst example in some respects, but even Aberdeen rivalled it in terms of rent. The bigger the city, the higher the travelling expenses. That is why London
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is often so badly hit. Students here have high rents and spend a great deal on travel because they have to cover such great distances to get to their classes.
Furthermore, the new payments do not cover those people who are hardest hit by the loss of benefits. I presented some rough calculations during our debates. The payments do not compensate for people in the most extreme circumstances.
The regulations merely enforce what I suspected. It may become desirable to ask someone who wishes to go to university how he or she will be funded and say, "If you are dependent on the state support scheme, I recommend that you go to university in Sheffield, Newcastle or Manchester because everything is cheaper there". Shall we effectively drive people out of the universities of the south-east? Shall we say, "You can go to university in certain parts of the country only if your parents' income is over £x a year"? We have already taken steps in that direction by the erosion of the value of the system. Social security protected us from that great anomaly; but, as it has been removed, and taking house rents into account, there will effectively be an income bar on certain parts of the country. I hope that, as the noble Earl, Lord Caithness, pointed out many times, the situation will be kept under review. Indeed, the review is probably already well overdue.
I thank the Government for taking into account the terms of repayment of disabled students and the conditions for cancelling repayment by such students. However, why have the Government not expanded the definition of disabled to cover those people who are deaf or have the disability from which I suffer, dyslexia? Those people are counted as disabled when they are at school and when they leave as they will be entitled to disabled-for-work grants. Why are they not counted as disabled when they are students? Why are they not given beneficial repayment terms? They have higher costs of living. That point applies especially to deaf people who need other pieces of equipment. It applies also to dyslexics who may require secretarial help for day-to-day living. I know that I do. If one cannot write a letter, one may well have to sit down with someone and dictate simple letters about moving house, bills, changes of address, and so on. I ask the Government to bear these points in mind.
Baroness Blatch: My Lords, despite its difficult start, this has been a useful debate because it will allow me to clarify some points that still need clarification. It may be helpful if I restate the principles of the scheme. The Government are budgeting for a substantial increase in student support. We have already announced that the grant will be uprated in the usual way this autumn. On top of that will come the loan. That will provide £178 million, or even more if take-up exceeds 80 per cent. The final sum will be determined by demand and is not cash limited. On top of that will come £25 million for the access funds, of which £14 million is for students in the ambit of the loans scheme. The saving from the removal of social security benefits, if it goes ahead, is expected to be £68 million in respect of students in the scope of the loans scheme. Therefore the net increase is of the order of £125 million.

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We expect this to make higher education more attractive. Our information to date shows that applications for the coming autumn term, made in the knowledge that we intend to introduce the loans scheme, are higher than applications made for the corresponding time last year.
Because repayments will accrue, the loans scheme will permit higher education to continue to expand without the burden of supporting students' living expenses falling on taxpayers and parents. A new source of support will be introduced to share the burden: anticipation by students of their own future incomes as graduates. Your Lordships will know that the deferment provisions set out in the regulations will provide protection to those who do not realise the graduate income advantage. The other terms of the loan are also generous, in particular the indexation to inflation.
It may be helpful if I now respond to some of the specific points that were raised. The noble Lord, Lord Peston, began by querying liability and asking where that falls. I am advised that if someone makes, for example, a false representation in obtaining a loan, any liability will lie with that individual. It will not lie with the institution. But we shall expect institutions to be properly prudent where public money is at stake. Their accuracy in certifying eligibility will be subject to audit.
Lord Peston: My Lords, perhaps I may intervene. It is my fault that the noble Baroness did not understand my question. My point was not that way round—at least it was only partly that way round. If a student claimed that he failed to get a loan because he was misled by the institution, would the institution be liable to be sued by the student? I do not necessarily need a reply now, but that is partly what I was asking about.
Baroness Blatch: My Lords, if a college or university deliberately—
Lord Peston: Inadvertently!
Baroness Blatch: or even unwittingly misled a student, there would be an inquiry. One hopes that the matter would be put right. I am waiting for a specific answer to the noble Lord's question.
My noble friend Lady Young queried the distinction between universities and colleges. I am advised that in collegiate universities it will be the college not the university that is responsible for certifying its students' eligibility. This is clear from the way "university" is defined in the Act. The regulations impose duties on the governing bodies of institutions attended by eligible students. This is in accordance with Schedule 2 to the Act which contains the power to impose these duties. In Schedule 2 the power to impose a duty on governing bodies of institutions includes a definition of what is meant by the governing body of a university. The term "university" is itself defined in the Act—in Section 4(3)—as including a college and any other institutions in the nature of a college within a university. Therefore the power to impose duties on
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governing bodies applies to universities, understood in that sense, including colleges and other institutions within a university. The result is that in a collegiate university it will be the college not the university which is responsible for certifying its students' eligibility for a loan. The argument that it does not apply to a college overlooks the way in which "university" is defined in the Act.
The noble Lord, Lord Peston, and other noble Lords, said that £3·50 per student is unreasonable and is not a realistic sum. The £3·50 per student is based on a reasonable estimate at this time of the work involved. I concede that only in the light of experience will we know whether that sum is adequate. It will be necessary to review this sum of money. What has to be said is that 90 per cent. or more students come into unviersity and higher education via the mandatory awards system. Therefore it will be relatively straightforward to I establish qualification for loan. Much of the information that is involved in applying to university through the mandatory award system will be the same kind of information that will apply for certification. I am told that something like 5 per cent. of students will present a problem for the universities in terms of their having to do a little more than taking a straightforward look at the information contained in the application for a mandatory award.
The noble Lord, Lord Peston, was concerned about advice to students and the role of the tutor. I am advised that the Consumer Credit Act already regulates financial advice that is given to students or others. The introduction of the loan does not change the bearing of existing legislation on the giving of financial advice. I believe that the noble Lord was actually referring to informal advice where a student asks whether it would be advantageous for him to take a loan and asks to have the loan explained. The noble Lord was concerned about the thin line between explanation and pure information on whether to take a loan. I am informed that that kind of informal advice would not be precluded by anything in the regulations or anything in the Bill. But the advice must not overstep the line and become involved with the application. In other words, the tutor would not be expected to become involved in the processing of a loan. Once the advice had been given about how to accept a loan and what a loan would mean to a student, it would be very much up to the individual student to process his own application.
The noble Lord also asked about bank accounts. It is stated that payments must go into a bank account to ensure payment. I am again advised that the payment must go into a bank acccount to ensure that it does not go astray. There is no charge to a student for setting up a bank account. There is no requirement once payment has been received to leave the money in a bank. It can be paid into a bank and immediately withdrawn. The student would then have the use of it and it would be entirely his decision as to how to use it.
The issue of direct debit was also raised by the noble Lord. This is needed to simplify the arrangements for repayment. The facility is there for

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the borrower to vary that part of the regulation. In other words, if it is not suitable for the individual student, the student can negotiate a different way of repayment.
A number of noble Lords referred to measures to help disabled students. A rather cynical comment was made by the noble Lord, Lord Peston. He said that we had done very little by disabled students. It is worth noting that a great deal has been done for disabled students. I am reminded that my noble friend the Paymaster General brought together a list of measures to help disabled students. We have increased the disabled students' allowances—the general level itself was raised to £1,000. There are special allowances of £3,000 for the course and in some cases £4,000 a year for non-medical helpers. There are concessions for disabled borrowers. Their income from disabled-related benefits will be disregarded when calculating income for purposes of deferment. The Student Loans Company will have discretion to allow disabled borrowers to start repayments later or to make repayments over a longer period if they judge it to be appropriate. I am not sure that I agree with the rather cynical comment made by the noble Lord, Lord Peston.
Lord Peston: My Lords, perhaps on a matter of fact I may interrupt the noble Baroness. I thought I heard the noble Lord, Lord Addington, imply that he was under the impression that the loan could be waived entirely for a disabled student. Will the noble Baroness confirm that that is not the case and that only deferment is possible?
Baroness Blatch: My Lords, yes; only deferment is possible. The loan would not be waived entirely. The noble Earl, Lord Russell, asked a specific question about the definition of the Metropolitan Police district. I am assured that the London rate for loans is precisely the same as the London rate for grants. Students at the Royal Holloway and Bedford New College can receive the London rate of grant and they will also be able to borrow at the London rate of loan.
The noble Earl raised the question of employment during term time. As regards the amount of loan, I am glad to say that from what he said, the noble Earl appears to be reconciled to the principle of loans for students. I believe also that the noble Lord, Lord Peston, agrees with the principle of loans for students. He has said so a number of times during the course of the debate. However, he is now arguing that not only should students receive loans, but even greater loans. I hope the noble Earl will forgive me because it may sound as though I am jesting.
He has argued that students should not be free to take paid employment during term time or in the holidays. We do not share that view. The specific question was posed as to whether we have a policy either for students working or not working. We do not take a paternalistic view about students. Whether they work during term time or in the holidays must remain a matter for the individual student.
Earl Russell: My Lords, I ask the Minister for a little clarification on this matter. It is the policy of
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a number of academic institutions, including the one to which I belong, that undergraduates are not free to take paid employment during term time. Do Government policies conflict with ours in continuing to take that line?
Baroness Blatch: My Lords, as I have said, the Government are not involved as to whether students take paid work in term or holiday time. That must remain a matter for the individual student. I doubt whether any single college in this country can ban a student from taking paid work either inside or outside of term time.
Earl Russell: My Lords, we need a little clarification here. Is it government policy that students should be supported at a level that makes it financially possible for them to manage without paid employment during term time?
Baroness Blatch: My Lords, the Government provide an adequate level of support for a student to be maintained without work during the course of study. However, it is the choice of many students who choose freely to work during term time and/or holiday time. That must continue to remain a matter for the individual student.
The noble Lord, Lord Peston, referred to repayments and the instalment system. I am advised that the instalments for the remaining period of the loan will be recalculated annually. If the inflation rate changes, the instalments will vary to reflect that. Therefore, there will be no need for a further adjustment at the end. The noble Lord went into some detail concerning interest rates. It is not possible for the interest rate to follow exactly the inflation rate as that cannot be known in advance.
The noble Lord would be quick to complain if the interest rates were varied retrospectively. However, borrowers need to know in advance what rate will apply. I notice that the noble Lord did not point out that if the inflation rate rises, then the lagging system works very much to the benefit of the borrower. The regulations are not technically flawed on this matter. I am advised that the requirement is that the Secretary of State shall specify the interest rate that appears to him requisite for maintaining the loan's value. He has concluded that the use of the latest actual rate of inflation is the most appropriate way to meet these requirements.
Lord Peston: My Lords, I am sorry to interrupt the noble Baroness. This is a very serious matter. I must place on record that I am not wrong, but that I am right. If the Secretary of State is now following that argument, he is mistaken. I ask the noble Baroness to go back to her department and to speak to the appropriate people. I know what is meant by a real interest rate. These regulations are flawed. It cannot be said that the Secretary of State can do just what he likes under the Act and get away with it. The regulations are wrong. I am willing to delay this matter, but if noble Lords are prepared to agree a set of regulations that are wrong, then it is for noble Lords to say. I am not mistaken.
Baroness Blatch: My Lords, I simply repeat what I have just said. The requirement in the Act is for the Secretary of State to specify the interest rate that appears to him—I emphasise that—requisite for maintaining the loan's value. At the moment he has concluded that the use of the latest actual rate of inflation is the most appropriate way to meet that requirement.
The noble Earl, Lord Russell, was interested in the speed of payment to students. I am assured that the company is successfully recruiting staff. It is very much on top of the work that it has to do in preparation for the loans' scheme. I am assured that the objective is that all students shall receive their loans within 20 days of application. That is the aim. We shall have to wait to see whether that objective can be met. If it can, I would consider that to be most reasonable. It will also depend on the accuracy of the application form that is presented for payment.
The noble Lord, Lord Butterfield, was concerned about the repayment threshold. That will be adjusted annually to equate to 85 per cent. of the average earnings at any given time. He was also anxious about the size of the loan. Again, that is something that will be reviewed annually. The noble Lord was also concerned about the confidentiality of bank details. I am assured that, for reasons of privacy, the forms are designed to leave no record whatever of the student's bank account number with the higher education institution.
The noble Baroness, Lady David, speaking on behalf of the noble Lord, Lord Blease, asked about Northern Ireland. Before this debate I had discussions with the noble Lord on that subject. I am assured that there will be Orders in Council that will reflect both primary legislation and regulations. I know the noble Lord, Lord Blease, well and I know that there will be considerable and detailed discussions about the practicalities of the way in which the system will work. The scheme will very much shadow what will happen in England and Wales.
The noble Baroness, Lady David, referred to the case of a student over 50 years of age. My response will be of cold comfort to her. The decision has been taken that loans will not be available for students over 50 years of age. I must leave the matter there.
The noble Lord, Lord Addington, raised issues about deaf students. He knows that deaf borrowers will not be eligible for repayment and deferment provisions for disabled people. At the moment consideration is being given to the proper definition of the severity of deafness. Eligibility is determined by the issue of whether or not the borrower receives one or more of the disability-related benefits listed in Regulation 9 paragraph 5. The provision is confined to disabled borrowers who are identified by the DSS as needing assistance through the benefit system. At present there is no benefit payable for people whose sole disability is deafness. Decisions on what kind of disability need support through the benefit system are matters for the Secretary of State for Social Security.
Deaf people will be eligible for the special deferment arrangements if they receive one of the
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benefits listed because of another disability. If in future any of the benefits listed are extended to people whose sole disability is deafness, they will come within the scope of these arrangements. If a new benefit is introduced specifically for deaf people, we shall no doubt want to take that into account in future loan regulations.
Lord Kilmarnock: My Lords, before the noble Baroness enters upon her peroration, as she has dealt with most of the detailed points that were made, perhaps I may ask this. Will she take into account the point that I raised about the unnecessary complication of the particulars to be verified by the institutions of higher education, with particular reference to passports? If she cannot answer that question immediately, I ask that she writes to me.
Baroness Blatch: My Lords, the information that is involved in applications through the mandatory award system will suffice for the vast majority of students. We are talking about a very small number of students where it may be necessary to resort to other methods of identification. I now turn to the points raised by the noble Lord, Lord Kilmarnock and the noble Baroness, Lady White. They made heavy weather in references to the administration and access to access funds.
Universities and colleges throughout the country have taken a pastoral interest in their students in terms of their well-being and their financial circumstances. I believe that the availability of access funds will make their work very much easier in that not only will they be able to identify the needs of their students; they will now also have the financial wherewithal to do something about the situation. It is most important that loans reach the right people and that the identity of such people should be properly established.
These regulations offer an additional source of support to students on what I believe to be favourable terms. They will underpin the expansion of higher education which we all want to see. I commend them to the House.
On Question, Motion agreed to.

Business
Lord Reay: My Lords, I apologise to the right reverend Prelate for intervening at this point, but I think that it may be for the convenience of your Lordships if I were to announce that as a result of the amount of business tabled on today's Order Paper, the noble Baroness, Lady Hollis of Heigham, will not be asking her Unstarred Question this evening.

Care of Cathedrals Measure
7.50 p.m.
The Lord Bishop of Chichester The Lord Bishop of Chichester rose to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.
The right reverend Prelate said: My Lords, this Measure is the first major instalment in fulfilling the undertaking which the General Synod gave to the Government to improve and extend the control of repairs and alterations to our churches; that is, those which enjoy ecclesiastial exemption. This particular Measure fills a big gap; namely, the lack of control over cathedrals. In presenting this Motion, and the Measure to which it relates, I speak with the experience of having been dean of one of our great cathedrals for five years. I refer to Worcester Cathedral.
When a priest is appointed to such a post his first concern must be for the cathedral as a centre of worship and mission. A cathedral is the mother church of the diocese, it is a place where daily prayer is offered for the diocese, and it is a place where from time to time the bishop—from whose teaching and governing seat, the cathedral, derives its name—presides over ordinations and other diocesan gatherings; it is a spiritual powerhouse for the whole diocese.
The dean, or provost, and his colleagues in the chapter are deeply involved in these matters. However, they also find themselves custodians of a building which is of great historical and architectural importance. Very often tension exists between those two roles. It is a tension caused partly by the amount of time taken up in fund-raising in order to repair and maintain the building and partly by the need to decide to adapt it, as has constantly been done throughout the centuries, to the developing needs and changes in patterns and styles of worship. It is necessary to find the right reconciliation between competing interests.
Hitherto, the administrative body of each cathedral has been the final authority, which was able in the last resort to do what it thought right within the limits of the finance available. This Measure, when it becomes law, will make a fundamental change in that situation which has existed for hundreds of years. The Measure provides for each cathedral a fabric advisory committee as a statutory body of experts which must be consulted about all proposed changes of significance and its approval obtained.
The Measure further converts the present Cathedrals Advisory Commission, which over recent years has proved its worth as a non-statutory body, into a statutory Cathedrals Fabric Commission the consent of which must be obtained for all the more important changes. This body will also deal with appeals in case of dispute between a fabric advisory committee and its administrative body.
If noble Lords will look at Schedules 1 and 2 to the Measure, they will see that the composition of the commission and of the committee ensures that the views of those who are expert in the care and conservation of ancient buildings will be brought fully into the making of decisions about the restoration or alteration of the cathedral fabric.
The Measure also provides that if the administrative body of a cathedral, having gone through the various processes of application and consultation is, nevertheless, dissatisfied with a
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refusal by the Cathedrals Fabric Commission and wishes to proceed with its proposals, it may ask for a commission of review consisting of three persons. One person would be appointed by the two archbishops, one would be appointed by the Secretary of State for the Environment and the third person, who would be the chairman, would be the Dean of the Arches or a lawyer appointed by him.
Those of us who have been involved in the working out of this Measure believe that that last provision will be rarely, if ever, used. It will be rather like the Court of Ecclesiastical Causes Reserved which was provided in the 1963 Ecclesiastical Jurisdiction Measure but which was not called into being for 25 years.
Such are the bare bones of the Measure. Your Lordships have before you more of the flesh in the Measure itself and in the detailed commentary of the report of the Legislative Committee of the General Synod which is attached to the commendation of the Measure by the Ecclesiastical Committee of Parliament. The report also provides more of the background to the making of this Measure than I thought it right to weary the House with this evening.
I should like to take the opportunity to say at this point how very grateful those of us who have been involved in the drafting of the Measure are to the present heritage Minister, to his predecessor and to officials of the Department of the Environment for their help and sympathetic understanding of the various problems which we faced in persuading 42 administrative bodies that they should sacrifice the sovereign independence which they have enjoyed from time immemorial. I believe that what is now before the House is a workable scheme and, given good will and understanding, one that can be worked happily for the reconciliation of the interests of conservationists and those who have responsibility for the worship and mission of cathedrals.
However, before I sit down, I must touch on one other matter; namely, enforcement. There are no enforcement provisions in this Measure. There are some in the Measure which concerns the care of parish churches which I hope will receive final approval from the General Synod next week. I hope that I shall be able to introduce that Measure to the House in a few months' time.
As I said, there are no enforcement provisions in this Measure and I think that I should explain why this is so. We had prepared a third Measure dealing solely with enforcement provisions for both the Cathedrals and the Care of Churches Measures, but it appeared to certain persons in high places so formidable that we were advised by the previous heritage Minister to withdraw it for further consideration and discussion. We felt bound to follow that advice, but in view of the importance of the Cathedrals Measure—which I hope the House understands—and the great weakness in the ecclesiastical exemption which it remedies, we were anxious not to delay implementation.
The further consultations which have taken place on the matter have shown a possible way forward. We were able earlier this year to put the appropriate provisions into the Care of Churches Measure. They have been accepted by the synod and I believe that

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they are also acceptable to the Department of the Environment. However, it was too late in the legislative process to alter the present Measure and, indeed, we have yet to get the provisions into a form appropriate to cathedrals. That is because we simply cannot take them from one Measure and apply them in exactly the same way in another.
I can, however, assure the House that we are committed to providing an adequate enforcement procedure and have began work on it. I have already had one meeting with our legal advisers, following a helpful interview with the Minister. We have roughed out a scheme which is to be considered by the drafting committee tomorrow morning. I am confident that we shall be able to produce a short Measure to the new synod which comes into being at the end of the year.
It is, however, vital that we have proper consultation with those who will be affected by such provisions and, so far as possible, obtain their good will. Perhaps I may add that we are well advanced with the drafting of the rules that have to be made under the Measure.
I hope that your Lordships will accept that in the Measure we have provision for the protection of these great historic buildings which equals and in some respects goes further than the secular controls of listed buildings which the House has looked at in recent months. I beg to move.
Moved, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.—(The Lord Bishop of Chichester.)
Lord Graham of Edmonton: My Lords, we on these Benches give the Measure a warm measure of support! I assure your Lordships that that was an accidental pun. The manner in which the basis of the Measure has been explained is certainly to the benefit of the House. I cannot believe that anyone inside or outside the House would not wish to speed this Measure into legislation.
The right reverend Prelate not only has more experience than I have but is closer to the action. Nevertheless, I have taken advice from English Heritage. As noble Lords know, that organisation takes a keen interest not merely in cathedrals and churches but in maintaining the fabric of our heritage. I like the opening words of its briefing to me:
"The 42 mainland cathedrals of the Church of England form the largest coherent and artistically splendid group of listed buildings in England, as well as being of enormous archaeological importance. They are also the home of some of England's greatest works of art from the post-Roman period onwards".
I thought that those words were splendid. They paint a picture and a scene that we all wish to preserve.
I noticed that the final words of the right reverend Prelate were that the Measure provides protection. The greatest protection that I know is money. I wondered to what extent there was provision for that. There is framework for a vast improvement in the public accountability of those people who could make a contribution to what we desire rather than
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what previously existed. One does not wish to be critical about a past situation because that gets one nowhere. From what I have read, I believe that many controversial decisions have been made without—to use a clumsy phrase—adequate consultation. Of course there is consultation, but sometimes people who might be helpful are sidelined or ignored—not out of malice—and that creates a rift.
One reads the schedule and sees the enormous care that has been taken to try to obtain the best, most representative group of people to serve on the committee to achieve what we wish. I am impressed. I imagine that few people, if any, who claim to have in interest in the Measure are not taken care of in one way or another, particularly under paragraphs 3(e) and (f) of Schedule 1 on page 13. One can go right through the Measure and see a great deal of care and attention. The more people who are invited to contribute to the ideas, the wider the base from which one can raise the necessary money. We on this side of the House are conscious that the Measure ought to be approved and speeded on its way.
I am also delighted to see that it will be a duty on English Heritage to advise the national Cathedrals Fabric Commission on any application referred to it. In other ways, the expertise of English Heritage will be available. I am grateful for this opportunity to say a few kind words and I wish the Measure well.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, I am very glad to be able to speak in this debate to give the Government's view of this important Measure. I congratulate the right reverend Prelate the Bishop of Chichester for the hard work that he and the officers of the General Synod have done in bringing forward a system to operate efficiently and yet sympathetically to ensure the proper protection of these Church of England cathedrals.
Modern trends of secularisation cannot distort the fact that the Church has played a major part in the history of this country. The medieval cathedrals stand as a witness to this, from Durham which stands firmly on its rock as a symbol of the temporal as well as spiritual power of the medieval bishop, to the grace and beauty of Salisbury. English cathedrals stand also as symbols of Georgian elegance in the close and of the national spirit itself, emerging like St. Paul's in London like a phoenix from the flames both in the 17th and the 20th centuries. But more than all this, the cathedral is the house of God.
I would not wish the Church to give up all its freedom of action to be engulfed by secular rules and regulations. It has a task to perform, and that must be its first priority. But there must be systems to ensure that any body with such a precious inheritance will take proper care of it. So I am very glad that the Church of England has so conscientiously and with such determination brought forward a comprehensive system for looking after these marvellous buildings, balancing the duty of worship and mission with the needs of care and conservation in a way which sets an example to other denominations.

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However, I wish to leave one thought with the Church authorities. It is vital to consider the question of enforcement. Clearly, it must be for the Church to consider what provisions it wants to bring forward on this score. But I and my ministerial colleagues feel strongly that it is most important for the Church to ensure—and to be seen to ensure—that there are adequate and unambiguous provisions for controlling any breaches of this legislation.
In an ideal world, of course, no enforcement provisions would be necessary in secular or Church legislation. Everyone would honour the requirements upon them, without question. But perhaps in that happy situation we would need no legislation at all. Meanwhile, in a world where we are all sinners there must be clear provisions to ensure that the requirements of the legislation cannot be flouted without the risk of penalties. I urge the General Synod to consider that.
Members of your Lordships' House will also know that for some time now my department has been considering the way forward on the restriction of the ecclesiastical exemption listed building control, following discussions in 1986 and a further consultation paper last year. Tonight is not the right occasion on which to go into the details of our thinking on this issue, except to say that—as my comments will already have made clear—we wish to give due weight, on the one hand, to enabling worship to proceed without interference and, on the other, to ensuring that buildings of special architectural or historic interest enjoy appropriate protection. However, I hope to discuss it with your Lordships shortly to enable us to consider the way forward. Meanwhile, I again express my thanks to the right reverend Prelate the Bishop of Chichester and support this Measure before your Lordships' House.
The Lord Bishop of Chichester: My Lords, perhaps I may express my thanks to the two noble Lords who have spoken. This is the end of a long process over cathedrals and it is gratifying to find the Measure so warmly welcomed.
On Question, Motion agreed to.

Home Grown Cereals Authority Levy (Variation) Scheme (Approval) Order 1990
8.10 p.m.
The Earl of Strathmore and Kinghorne The Earl of Strathmore and Kinghorne rose to move, That the order laid before the House on 24th May be approved [21st Report from the Joint Committee].
The noble Earl said: My Lords, noble Lords may be aware that it was intended that the cereals order be debated with the oilseeds order last Thursday. However, as the Joint Committee on Statutory Instruments was unable to report on the cereals order until this week, the debate on this order had to be deferred until today.
The instrument before us today introduces minor administrative amendments and clarifications to the existing levy on cereals, which is used to fund the activities of the Home-Grown Cereals Authority.
The 1987 Home-Grown Cereals Authority Levy Scheme provides for the raising of levies from cereals producers, dealers and processors in order to fund the authority's activities aimed at improving the production and marketing of home-grown cereals. These activities include the provision of market information, UK cereals export development, support for Food from Britain and research and development.
Parliament decided last year—in the Cereals Marketing Act (Application to Oilseeds) Order—to bring forward by a month the start of the authority's financial year so that it runs from July to June. This reflects the market year for cereals and oilseeds, which begins in July when the first barley, wheat and rapeseed is harvested, sold and therefore subject to the levy. The cereals order under discussion today amends the existing levy scheme to reflect this new financial year. The opportunity has also been taken to introduce a number of other minor administrative amendments in order to clarify the operation of the present scheme. These involve deletion of redundant provisions, simplification of definitions and clarification of the way in which the levy is collected. None of these proposed changes alters the main structure of the scheme and all have been the subject of consultations with the interested parties. I commend this statutory instrument.
Moved, That the order laid before the House on 24th May be approved [21st Report from the Joint Committed—(The Earl of Strathmore and Kinghorne.)
Lord Gallacher: My Lords, I thank the noble Earl for explaining the order which we support. I have noted the views of the Joint Committee on Statutory Instruments on the order contained in its 21st report and the Minister's consequential memorandum on two provisions of the order.
The Earl of Strathmore and Kinghorne: My Lords, I am grateful to the noble Lord, Lord Gallacher, for his comments. I commend the order to the House.
On Question, Motion agreed to.

Licensing (Low Alcohol Drinks) Bill
8.12 p.m.
Viscount Montgomery of Alamein: 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.—(Viscount Montgomery of Alamein.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD HAYTER in the Chair.]
Clause I [Low alcohol liquor not to be intoxicating liquor for the purposes of the Licensing Act 1964]:
Lord Mancroft Lord Mancroft moved Amendment No. 1:
Page 1, line 11, leave out ("0·5") and insert ("0·9").
The noble Lord said: I had not originally intended to speak on the Bill—I did not speak on Second Reading—as I did not regard it as the most

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important piece of legislation. I see by the level of attendance in the Chamber that I was not alone in that thought. However, on reading the Bill carefully, I noticed one or two details that are worth examining closely. I have put down this amendment in the form of a testing amendment, as it were, so that we can consider those details.
The point that came to my attention when I read the debate that took place in another place concerned the percentages of alcohol content and where one drew the dividing line between high and low alcohol content for the purposes of the Bill. The great question is where that line should be drawn.
The part of the debate that interested me most was the discussion on the difference between 0·5 per cent. and ·05 per cent. of alcohol. That seems a narrow area until we consider it further. If one goes back, one realises that this is a compromise Bill. From the point of view of the Government it is a compromise between their desire to encourage people to drink less, or weaker, alcohol, and their need to raise revenue. From the point of view of the brewers it is a compromise between the healthy desire to show profit for their shareholders—I do not quarrel with that—and their desire to show their social conscience by promoting lower alcohol content beers. I am a little more cynical about the latter point. The difference that we must think about is the difference between the 9 per cent. strength that I have referred to in my amendment and the 5 per cent. that exists at the moment.
It does not take a mathematical genius—that is fortunate, because I am not such a genius—to work out that the difference between 9 per cent. and 5 per cent. is less than twice, whereas the difference between ·05 per cent. and 5 per cent. alcohol content is 10 times.
Viscount Ullswater: I should remind the noble Lord that he is talking about 0·5 per cent.
Lord Mancroft: That is quite correct, but I am talking about the difference between ·05 per cent. and 5 per cent.
Viscount Montgomery of Alamein: I regret to tell the noble Lord that he is wrong because his amendment seeks to change the strength in question from 0·;5 per cent. to 0·9 per cent.
Lord Mancroft: That is entirely correct, but if the Committee will allow me to finish I shall explain my point, which is quite simple although it has now become suddenly rather horrible. In my amendment the difference is between 0·5 and 0·9 per cent. which is a difference of less than twice. In the discussion in another place, the difference was one between ·05 and 0·5 per cent. As I have said, the difference betwen ·05 per cent. and 0·5 per cent. is 10 times. In another place and again here, it was decided that those two percentages could be quite happily lumped together in one block as low alcohol content. However, the reality is that ·05 per cent. constitutes a non-alcoholic content. A loaf of bread or a glass of apple juice contain ·05 per cent. alcohol but we do
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not suggest that those products should be licensed. However, at the moment it is suggested that 0·5 per cent. is too far away from 0·9 per cent. to be included in the same bracket.
The Committee may say, with justification, that I am splitting hairs and that this is all rather facetious. But there is a rather important point here. It is that many people come into the same bracket as myself. I am an alcoholic which means that I am allergic to alcohol. That is not really a big deal. I do not mind it too much. However, it means that I must not drink alcohol. If I drink alcohol it will start the whole process of my disease again and I shall go down the tubes, which is where I do not wish to go. However, if I stick off the alcohol life is pretty rosy. There are quite a few of us who fall into the category of wanting to keep our lives rosy.
On more than one occasion I have entered a restaurant and asked for non-alcoholic beer. The staff say they have a non-alcoholic beer, but they produce a low alcoholic beer. There is a world and a galaxy of difference between the two. However, there is no difference whatsoever between a low alcoholic beer with 0·5 per cent. of alcohol and a low alcoholic shandy with 0·9 per cent. of alcohol. One can taste the alcohol. One knows there is alcohol in there, and it has an effect. There is a brand of beer produced by Guinness which contains 0·5 per cent of alcohol. I should point out at this stage that I have no axe to grind for or against Guinness, although it appears that other brewers have such an axe to grind. If one consumes a beer with ·05 per cent. alcohol one is not consuming any alcohol at all. However, if one drinks a beer with 0·5 per cent. of alcohol, one is consuming an alcoholic drink. It seems to me, therefore, that it is unwise to lump those two categories together. If Members of the Committee and Members of another place think it is all right to lump the two categories together—I do not quarrel with that if that is what they want to do—there is no reason why those two or three brands of drink which contain 0·9 per cent. of alcohol should not also be lumped in with the other two categories.
The Government, the brewers, Alcohol Concern and others have got together and have produced a compromise which is good enough for all of those bodies and whoever else took part in the discussions. The only person it is not good for is the consumer. He has been fooled again. It is not a major point, but you cannot fool all of the people all of the time. I beg to move.
Viscount Montgomery of Alamein: I have listened with considerable interest to my noble friend's speech. The first point that I want to make is that he must not confuse levels of attendance with levels of alcohol. There is very wide concern about the issue, and that is one of the reasons why the Bill has been brought before the House.
My noble friend made some very interesting comments, particularly at the beginning of this speech, which I thought argued cogently in favour of the Bill as it stands. As he pointed out, the Bill is a compromise measure. It has been subject to very wide consultation with a large number of organisations, including those concerned with the excessive consumption of alcohol.

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My noble friend explained his own position very sincerely. Therefore, I found it rather strange that he should be proposing an amendment which has the effect of doubling the proposed minimum level of alcohol. Be that as it may, the point at stake here is that the measure has received wide consultation. There is a great deal of support for the position as it stands. A very long timescale is allowed for its introduction in order that the labelling can be correct so that there should be no misunderstanding whatsoever about the strength of the beverages that people are consuming and related matters at all levels in the chain of consumption, whether at the retail, wholesale or consumer level.
For those and other reasons, I believe that my noble friend's amendment is wholly unnecessary and somewhat illogical. I urge the Committee to reject it. In view of the fact that this measure has received considerable support from all parties and from the Government both when it went through another place and in this House, I shall be interested to know whether the Government are of the same view on the matter. When the Minister comments I hope that we shall hear that the Government are of the same mind as they were last week.
Viscount Ullswater: When considering the question of how the definition of intoxicating liquor might be amended in the light of the development of low alcohol and non-alcoholic drinks, the Government have always been particularly concerned to get right the percentage of alcohol by volume it would be safe to permit in drinks which could, in future, be sold without a licence. That would mean, for example, that they could be sold freely from unlicensed premises such as sweet shops, groceries and corner stores. In licensed premises they could be sold to and consumed by young people under 18 years of age.
We have always recognised that this is a fairly complex question to which there is no simple answer. We have taken the view that what might be termed the medical considerations of the issue should be regarded as paramount. Accordingly we have relied on advice from the Department of Health. The department has based its advice on the premise that the most immediate concern, where young people are involved, is over the short-term intoxicating effect of consuming alcohol. The most important short-term physical effect of consuming any alcoholic drink is to produce a rise in blood alcohol level. The higher the blood alcohol level the greater the risk of harm ensuing to the individual concerned.
Very briefly, the advice we have been given is that consumption of as little as two pints of low alcohol beer of around 1 per cent. alcohol by volume in one hour without food would cause the blood alcohol level of a fairly typical young person to rise to 30 milligrams of alcohol per 100 millilitres of blood. That is considerably above the maximum level of blood alcohol (20 mgs per 100 mls) which our advisers would regard as acceptable in such a young person. If, however, the same young person were to drink beer of 0·5 per cent. alcohol by volume, he or she could consume up to six pints in three hours
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without any food and still remain within the acceptable blood alcohol level.
On the basis of that advice, the Government consider that the threshold of 0.5 per cent. for which my noble friend's Bill makes provision is the right figure to choose in this context. It would, in our view, lead to too great a risk of young people becoming inebriated if the threshold were to be placed as high as my noble friend Lord Mancroft's amendment would have it. My noble friend Lord Ferrers made it quite clear in his Second Reading speech that the Government appreciate that it will be necessary to look at, and possibly make amendments to, food labelling laws to sort out any implications the passing of this Bill may have for the producers of canned and bottled shandies. As my noble friend said, the commencement provisions in the Bill are designed to allow adequate time for that process to take place and there are no grounds for accepting the amendment on that account. I therefore strongly advise the Committee against supporting this amendment.
Lord Mancroft: It has been a short and rather obscure debate. I thank my noble friend Lord Montgomery for taking the trouble to reply to the amendment so carefully, and also my noble friend Lord Ullswater. I am not overly impressed by the introduction of the long timescale. I do not see what that has to do with it. Nor am I overly impressed by the measures for relabelling. I am sure that it is very important, but apart from fine wines I do not believe that many people examine the labels of their drinks very carefully. If the labels are anything like existing labels one will need a magnifying glass to find out what is in the drinks.
I am also extremely unimpressed by the medical evidence. As someone who has been involved in the treatment of alcoholism for some years I know that the last place to go for accurate medical evidence is the Department of Health. Any evidence that comes from there carries very little weight on this Bench. I am afraid that the staff in the department will not be very pleased if they read Hansard; but if they take as much interest in this subject as noble Lords, they probably will not read it.
I was delighted to hear what my noble friend said about the relabelling of shandy. Having put down the amendment I have to confess that I am not a great shandy drinker, but it is interesting that the point was noted. However, as I said, it is not an important issue but I thought that it was worth raising it in order to place it in the Official Report. On that note, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Corresponding provision for Scotland]:
[Amendment No. 2 not moved.]
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

Consumer Guarantees Bill
8.30 p.m.
Report received.
Clause 1 [The Consumer Guarantee]:
Baroness Ewart-Biggs Baroness Ewart-Biggs moved Amendment No. 1:
Page 1, line 7, after ("guarantee") insert ("given in relation to a specified product,").
The noble Baroness said: My Lords, with the leave of the House and in view of the rather late hour, in moving this amendment, I should like to speak to the following amendments together: Amendments Nos. 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 15 and 16. The reason I do this is because this group of amendments deals with the consumer guarantee which was inserted into the Bill at Committee stage.
I am indebted to the noble Viscount, Lord Montgomery, and to the noble Lords, Lord Lucas and Lord Mancroft, who originally tabled many of these amendments, as well as to their advisers. I hope that, bearing in mind the background and history of this Bill, these amendments will find favour with the Minister. They do not substantially alter what has already been agreed in Committee and indeed in another place. In fact they are necessary because unless they are accepted we shall send back to another place a Bill which contains a number of technical flaws.
Amendments Nos. 1, 4, 11, 12 and 15 slightly modify the immediate implications of that consumer guarantee. First, they provide that the consumer guarantee shall only apply to such products as the Secretary of State may specify in regulations. They delay the implementation of Part I of the Bill until the first such regulations come into force. Part II of the Bill will come into force two months after Royal Assent.
These amendments do not alter the detailed terms of the guarantee. However, they permit those terms to be varied by regulation both generally and for any particular product. I am sure that that is the correct approach at this stage. Indeed, the National Consumer Council made its recommendations after extensive consultation. The evidence that it received is available in the Library of another place. Its recommendations formed the basis of the provisions which have found favour in both Houses.
Noble Lords will be aware of the views of the Retail Consortium about some aspects of the guarantee and in particular the period of time during which a consumer has to claim for a defective product is felt to be too onerous. The noble Lord, Lord Mottistone (who is not in the Chamber this evening) mentioned those concerns in Committee.
It must be said that this is a consumer guarantees Bill and not one to protect business. Its aim is to raise the quality of goods in our High Streets. The evidence made available by the National Consumer Council and the views of both Houses strongly suggest that the terms of the consumer guarantee as currently in the Bill strike the right balance for an optional guarantee. However, if the Minister is uncertain—after all, we have not had his views on this point—I would point out that these amendments allow the option to vary the terms of the guarantee.
The Government may well want to consult first and no doubt wish to get the correct balance. In my view, from all the evidence available, the Bill as currently drafted finds the right balance.
Amendments Nos. 2, 3, 5, 13 and 16 are drafting and technical amendments which do not alter anything that has been agreed at Committee. As such I commend them to the House.
Amendments Nos. 6 and 7 meet the worries of the Minister, expressed in Committee, that the Bill, as drafted, would require many products to come with a consumer guarantee. The effect of them is to make plain beyond any shadow of doubt that the consumer guarantee for which we are legislating is an optional one.
Amendments Nos. 9 and 10 introduce two new clauses which resolve two points that are not addressed in the Bill as drafted. Amendment No. 9 provides that, where both the producer and supplier offer a consumer guarantee, the consumer may only invoke one of them and, once he has made his choice, he cannot change it. Amendment No. 10 deals with the issue of title to the goods. It ensures that legal ownership in a product which is returned or replaced vests in the guarantor.
That is a very brief explanation of these amendments. I hope that they will find favour with the House. I beg to move.
Lord Trefgarne: My Lords, this Bill has had a chequered history. It has now reached Report stage in your Lordships' House and, not for the first time, a great many important new issues are proposed for debate. The rash of amendments that appear each time this Bill reaches a new stage is a poor indicator of its general state of health. The Government's anxieties are on record about the proposals on consumer guarantees. During the Committee stage in this House my noble friend Lord Ullswater made plain that the Government do not accept the policy behind this approach.
At the core of the Government's objection is the creation of long-term rights of rejection through refund and replacement remedies. This fails to strike a fair balance between the interests of the consumer and those of the producer or supplier. Some have said that there is no inequity in this approach because the regime is not a mandatory one. I remain sceptical that this is the case.
As my noble friend Lord Ullswater said, the consumer's central concern is that goods should be of satisfactory quality, and that if they are not he should be able to get satisfaction from someone. The provisions on consumer guarantees would create a statutory framework which offers the consumer different remedies in different circumstances against different defendants in the manufacturing and supply chain. I remain sceptical that this is the right approach. The Government consider the Sale of Goods Act to be the proper framework for these issues.
There is a real risk that the practical effect of these proposals on consumer guarantees would be to undermine existing protection under the Sale of Goods Act and to discourage rather than stimulate the provision of guarantees with consumer durables.

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My noble friend also indicated to the House that the Government considered these proposals seriously defective in technical terms. Indeed, I believe the sponsors of the amendments themselves acknowledge the technical difficulties inherent in addressing this issue in legislation. When he moved these amendments, the noble Lord, Lord Williams, asked whether the Government would be prepared to take away the amendments and to redraft them as appropriate.
We have considered the provisions on consumer guarantees and come to the conclusion that they are irredeemably flawed. For example, the provisions fail to address adequately how rights under the guarantee regime would relate to other rights under the Sale of Goods Act and other statutory provisions. There is no consideration of the extra-territorial implications of this regime, and the obligations of foreign producers and rights of consumers in respect of goods taken outside the United Kingdom. The Bill is silent about how refund and replacement remedies would operate in the context of purchases made under finance agreements. The creation of long-term right of rejection in the context of consumer guarantees raises many difficult questions about the basis of calculation of allowances for use and misuse and where the burden of proof would lie in cases of dispute, but the Bill fails to address those questions. Those examples are illustrative of the fundamental yet unsolved problems which lie at the heart of this approach.
In addition to the more basic problems, the proposals also contain a number of other technical defects of a less fundamental nature.
The noble Baroness, Lady Ewart-Biggs, proposed and has spoken to a number of amendments which touch on some, but not all, of these issues. While the amendments proposed by the noble Baroness address some of these points, they do not provide a complete solution and would not result in a piece of legislation which was coherent and consistent. The difficulties inherent in these proposals are such as to render them unworkable without fundamental revision. We consider the whole approach to be fundamentally and irredeemably flawed.
Baroness Ewart-Biggs: My Lords, the Minister has spoken of the Bill's state of health. I agree that it has had a very rumbustious background. However, I remind him that it was not the fault of the promoters that it took five hours at Second Reading in another place and three days in Committee. It was because at that time the Government appeared to favour the Bill. It was only at the very last instance that it was talked out in another place and only the rump of the Bill remained.
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Since the Bill was still called the Consumer Guarantees Bill when it came to this House, we thought it right to reinstate a consumer guarantee in it. That is exactly what we have done during the different stages in your Lordships' House. The Minister still opposes the idea that consumer guarantee legislation must contain a consumer guarantee within it. That is all these amendments seek.
I remind the Minister that the guarantee that we suggest is optional for suppliers. It is not inherent for a supplier to have a consumer guarantee. We have made it optional in the Bill. The Minister stated that the Bill is defective in technical terms. I remind him that we still have Third Reading. If he finds that there are technical faults he will have an opportunity to put them right at that stage.
We have before us the Consumer Guarantees Bill. Unless it contains a consumer guarantee it will be a very contradictory Bill. I commend the amendment.
8.42 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 15; Not-Contents, 3.

DIVISION NO. 1

CONTENTS

Airedale, L.

Hatch of Lusby, L.

Bonham-Carter, L.

Jeger, B.

David, B.

Listowel, E.

Dean of Beswick, L. [Teller]

Meston, L.

Ewart-Biggs, B.

Pitt of Hampstead, L.

Graham of Edmonton, L.

Russell, E.

[Teller]

Seear, B.

Grey, E.

Tordoff, L.

8.49 p.m.
The Deputy Speaker (Lord Hayter): My Lords, as it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 55 I declare the Question not decided and that further proceedings on the Bill stand adjourned.
House adjourned at ten minutes before nine o'clock.