Lords Sitting of 14 March 1990

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

The Royal Shakespeare Company: Funding
Lord Willoughby de Broke Lord Willoughby de Broke asked Her Majesty's Government:
Whether they are aware of the financial plight of the Royal Shakespeare Company, and whether they have any plans to assist this institution.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, this issue was debated in another place on 20th February. My right honourable friend the Minister for the Arts explained that it was for the Arts Council to allocate funding to individual arts organisations, including the Royal Shakespeare Company.
Lord Willoughby de Broke: My Lords, I thank my noble friend for that reply. Is he aware that a substantial part of the RSC's revenue comes from its two West End hits, "Les Liaisons Dangereuses" and "Les Misérables" and that that revenue must be regarded as exceptional? When those productions close, as they must in due course, the company will be put in an even more difficult position than the one it now faces. In the light of that situation, can my noble friend enlarge on the Government's view as to how the Priestley Report of 1984 may be implemented? In particular I refer to the assurance that,
"provision will be made for future years".
Lord Hesketh: My Lords, I can assure my noble friend that provision will be made. I draw your Lordships' attention to the three recommendations in the Priestley Report. The Government accepted the first two, but there was a further element in the third recommendation concerning linkage to the RP1. The Government felt that they could not accept that element. The Arts Council funding for the Royal Shakespeare Company will rise to about £6 million this year—an increase of 11 per cent., which, of course, is above inflation.
Lord Jenkins of Putney: My Lords, the City Corporation is also among those who help to finance the Royal Shakespeare Company. If the City Corporation increased its input, can the Minister say whether it would be possible that the Arts Council would match any such increase? Does the Minister agree that if those two provisions were to take place, they would go a long way towards solving the problem?
Lord Hesketh: My Lords, I am sure that if the Government began issuing directives to the Arts Council, the noble Lord, Lord Jenkins, would be among the first of noble Lords on the Benches opposite to protest.
The Earl of Kimberley: My Lords, does my noble friend realise that, on the occasion of Shakespeare's birthday last year, at Stratford-on-Avon the entire theatre was given a political lecture by the chief actor? After that occurrence, about half of the audience walked out. If we are to have lectures given by actors of the Royal Shakespeare Company I hope that we shall not subsidise them.
Lord Hesketh: My Lords, I regret that last year I was unable to visit Stratford——
Noble Lords: Ah!
Lord Hesketh:—and thus I was not present on the occasion that my noble friend has mentioned.
Baroness Birk: My Lords, the Minister has rather brushed aside the Question and the present plight of the RSC. Is the Minister aware that the 11 per cent. increase which he spoke about rather glibly represents only 3·3 per cent. above the rate of inflation? The Priestley Report mentioned index linking but that has not been taken up. That report, together with the Cork Report and the recent Wilding Report, have all stressed the palpable underfunding of the national company. Is the Minister also aware that the chief executive of Royal Insurance—which has given more than £1 million since 1988 to the RSC—has complained that as its private sponsorship increases so the rate of Government subsidy decreases?
Lord Hesketh: My Lords, the fact of the matter is that since this Government came into office, expenditure on the arts has increased by a third in real terms after allowing for inflation.
Lord Donaldson of Kingsbridge: My Lords, the Minister speaks about the facts of the matter, but the important fact of the matter is that one of our most splendid dramatic companies is in very serious trouble. I should be very much more encouraged if the noble Lord took that into account and told us what he, or anybody else, believes can be done to help.
Lord Hesketh: My Lords, I take very seriously the remarks of the noble Lord, Lord Donaldson. It is important to remember that the Government take the matter seriously because, via the Arts Council, they are handing over £6 million this year.
Lord Hutchinson of Lullington: My Lords, does the noble Lord agree that the only relevant statistic is that over the past five years the subsidy to the RSC has increased by 11 per cent. while inflation has increased by over 30 per cent.? Does the noble Lord further agree that the RSC is only one of the national companies, and that all of them are in a

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state of financial crisis at the moment? Can the Minister say whether that situation is as a result of the Government's economic policy in that they cannot afford to keep these companies afloat or is it the direct policy of the Government to keep them underfunded in that way?
Lord Hesketh: My Lords, the fact of the matter is—and it is not glib to call it the fact of the matter because it is the facts that count—that expenditure has increased by a third in real terms. My right honourable friend the Minister of State has recently stated the simple fact that a 22 per cent. increase in expenditure over the next three years will be available to the Arts Council. It is also a fact that that is the decision of the Arts Council. I am sure that the noble Lord, Lord Hutchinson, would also be extremely unhappy if the Government intervened in decisions made by the Arts Council.

Collision off Cowes, June 1989
2.43 p.m.
Lord Harvington Lord Harvington asked Her Majesty's Government:
When they expect to receive the report of the collision between a Red Funnel Line hydrofoil and a sailing yacht which happened off Cowes during the 1989 Round the Island Race.
Viscount Davidson: My Lords, the report into the collision between the hydrofoil "Shearwater 6" and the yacht "Amanda Jane" on 17th June 1989 was completed by the Department of Transport in July 1989. A summary report of the accident will be published but this is being delayed because a prosecution of the commander of the hydrofoil is still outstanding.
Lord Harvington: My Lords, I thank my noble friend for that Answer. I am sure that the House will be pleased to know that there is to be a prosecution in this case. Many scores of people saw this terrible accident, which might easily have involved the loss of life. Can my noble friend assure the House that the trial is likely to take place before the next Round the Island Race, which will be on approximately the same date this year?
Viscount Davidson: My Lords, I cannot assure my noble friend that a trial will take place before the date he mentions. There is a certain jam in the Crown Court at the moment. But I can assure him that the Marine Directorate surveyor recommended that a prosecution should be brought against the commander of the hydrofoil for offences under the merchant shipping legislation.
I can also tell my noble friend, which I think is helpful, that the Government consider that prosecution for breach of the collision regulations is the best way to remind those using crowded waters of the constant danger and the need for great vigilance and also, in partnership with the harbour authority, to encourage prior discussion between
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ferry operators and yachting event organisers so that essential ferry services to the Isle of Wight can be maintained while at the same time allowing these yachting events to be held in reasonable safety.
Lord Harvington: My Lords, I agree entirely with what my noble friend has said but there are occasions, particularly on this day and on other days during Cowes Week, when one cannot see the water for yachts. Does it not therefore behove those who are running commercial craft to take extra special care at such times?
Viscount Davidson: Yes, my Lords, I agree with my noble friend. But I repeat that a prosecution is the best way to stop accidents happening in the future.

North Sea Conference: Government Policy
2.45 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What policy they adopted at the North Sea Conference this month in the Netherlands.
Lord Hesketh: My Lords, the United Kingdom has been privileged to make a very constructive contribution to The Hague Conference, and the measures already announced and agreed at the conference will ensure that the North Sea is a cleaner and more wholesome sea.
Lord Hatch of Lusby: My Lords, will the noble Lord address himself to two issues that were raised at the conference: first, the dumping of industrial effluents in the North Sea, which I understand the Government have promised to halt by the end of 1998, and secondly, the disposal of nuclear waste under the sea bed?
Lord Hesketh: My Lords, the United Kingdom made a number of commitments at The Hague, and it made those commitments in an important context which noble Lords should understand. We are a major industrial nation. We have been accused on some fronts of not showing the desired amount of consideration. I should point out that the accusation has been made by countries which are not major industrial nations.
Lord Hatch of Lusby: My Lords, will the noble Lord answer my questions? I have asked two specific questions on two specific issues that were raised at The Hague last week. What is the Government's policy on those two specific issues?
Lord Hesketh: My Lords, the United Kingdom's position is very straightforward and simple. We have to provide a sensible solution. We shall end all sewage sludge dumping by 1998. We are reducing such dumping where we can. Most important of all, we accept that we have to find a solution. The noble Lord may question the Government's position with regard to nuclear waste. I should remind him that Sweden is also engaged at this moment in having radioactive waste buried under the sea.
Lord Campbell of Croy: My Lords, is my noble friend aware that there is considerable satisfaction over the arrangements made at the conference—made, I understand, at the initiative of the United Kingdom—to help the conservation of dolphins and porpoises? This is the first time that such arrangements have been made at any of these North Sea Conferences.
Lord Hesketh: My Lords, my noble friend is absolutely correct. The Government have felt for some time that not enough attention has been paid to wildlife. We are very satisfied with the result, particularly, as he pointed out, with regard to dolphins and porpoises.
Lord Graham of Edmonton: My Lords, if there has been any meaningful change at the conference it must surely call for major consultation by the Government with those who are the prime sources of pollution. Can the Minister say what steps the Government have taken to ensure that there is meaningful change in the practices of industrialists? What effect will the changes have on the practices of local authorities? Have the views been sought of the main conservation bodies, which have played a major part in encouraging the clean-up of the North Sea?
Lord Hesketh: My Lords, I have had the privilege of attending meetings held by the Secretary of State with industrialists to discuss exactly the point raised by the noble Lord. I am sure that he is aware that environmentalists are to be seen within the portals of Marsham Street and that their advice has been sought in the past and will no doubt be sought again in the future.
The noble Lord asked about local authorities. I do not have a specific answer to his question but certain regulations will be the outcome of various decisions that are made in the process of cleaning the planet, if I may use such a phrase, which of course will affect local authorities. They will have to be kept abreast of matters.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether the conference will result in a reduction of the major source of pollution of the North Sea, which is the output of the Rhine?
Lord Hesketh: My Lords, it is fair to say that sometimes—and quite wrongly—the United Kingdom is accused of being the dirty man of Europe. In fact, the evidence has to be turned to the estuaries of the Rhine, the Elbe, the Meuse and the Scheldt.
Lord Northfield: My Lords, it was reported at the conference that the United Kingdom had failed to carry out the terms of the signed agreement to stop dumping in the North Sea by the end of 1989. Can the noble Lord tell us when that failure was reported to Parliament? Were we told in advance that the Government were not going to carry out the terms of an international agreement which they had signed?
Lord Hesketh: My Lords, I do not have the exact date in this respect. However, I shall certainly provide the noble Lord, Lord Northfield, with a letter which will answer his question. The British Government have always taken the position of practicality. We are committed to the abolition of dumping by 1992 because that will be both practical and feasible.
Lord Gisborough: My Lords, in continuation of a question asked earlier from this side of the House, is there any truth in the press report that no less than 80 per cent. of pollution is from the Rhine and the Elbe and therefore that whatever we may do, even if we were to stop altogether, it will not make much difference? Surely all efforts in this connection must be directed towards that 80 per cent., quite apart from anything that we may do.
Lord Hesketh: My Lords, we must not in any way slow up our efforts in order to provide a solution to our problems. It is absolutely correct, as my noble friend said, that 80 per cent. of the pollution does not come from the United Kingdom.
Lord Hatch of Lusby: My Lords, the noble Lord speaks of the British Government acting on "practicality". Does that mean that they put practicality before their own signed word of 1987, when they agreed to finish all industrial dumping in the North Sea by the end of 1989? Is he aware that this is the first of such conferences which has not been unanimous and that there had to be a footnote added to the declaration for a British option to continue? Is he further aware that when he talks about the reputation of Britain it was the Danish Environment Minister who said:
"The United Kingdom position is unacceptable. They are playing with all our lives. I am very sorry about this, I am sorry about future generations. I think that most of my fellow ministers are angry too"?
Was the noble Lord's right honourable friend as isolated at this conference as the Prime Minister has been at a whole series of such conferences?
Lord Hesketh: My Lords, as I pointed out earlier, this Government do not have a policy of introducing 90 per cent. unemployment on Teesside. We have a policy which states that we shall stop industrial waste dumping by 1993 which is achievable. In terms of initiative, it was this Government who insisted at the conference upon the destruction of PCBs at home rather than elsewhere.
Lord Hatch of Lusby: My Lords——
Noble Lords: Order!
Lord Hatch of Lusby: My Lords, the noble Lord has not answered the question. Did the British Government sign an agreement in 1987? It was an agreement not for the end of 1993 but for the end of 1989. I want to know whether the British Government signed that agreement. If they did, why have they broken it?
Noble Lords: Do not answer!
Lord Hesketh: My Lords, if the noble Lord, Lord Hatch, had been listening he would have heard me say in my previous answer that it is not the British Government's policy to introduce 90 per cent. unemployment on Teesside.
Lord Harmar-Nicholls: My Lords, is my noble friend as concerned as I am to notice on occasions such as this the eagerness with which noble Lords opposite seem to enjoy denigrating any contributions we make to the outcome of any of these conferences?
Noble Lords: Next Question!
Lord Sefton of Garston: My Lords, surely the noble Lord realises that if he refuses to answer a simple question there is bound to be procrastination in the Chamber. Will he kindly answer the question: did we sign the agreement or not?
Lord Hesketh: My Lords, we have signed an agreement which commits us not to dump industrial waste from 1993.

Death of the Lord Great Chamberlain
2.53 p.m.
The Lord Privy Seal (Lord Belstead): My Lords, the House will be much saddened to hear of the death yesterday of the Lord Great Chamberlain the Marquess of Cholmondeley. Lord Cholmondeley had held the post of Lord Great Chamberlain since 1966 and had been a Member of your Lordships' House since 1968. On behalf of the whole House I have expressed our deepest sympathy to Lady Cholmondeley.

Business
Viscount Davidson: My Lords, with the leave of the House, I should like to say a word about the two short debates standing in the names of the noble Lord, Lord Carter, and the noble Lord, Lord Mishcon. It is customary in short debates that the mover is allowed 15 minutes and that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debates. In the case of the short debate in the name of the noble Lord, Lord Carter, this means that all other speeches should be limited to a maximum of eight minutes and in that of the noble Lord, Lord Mishcon, to 14 minutes. If any noble Lord should speak at greater length, it would be at the expense of subsequent speakers in the debate.

Business of the House:Debates, 28th March—
Lord Belstead: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Baroness Stedman and the Lord Jenkins of Hillhead set down for 28th March shall each be limited to 2½ hours and that Standing Order
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35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to each debate.—(Lord Belstead.)
On Question, Motion agreed to.

Rich and Poor in Society
2.56 p.m.
Lord Carter Lord Carter rose to call attention to the gap between rich and poor in society and to the case for a social security system that meets the problems arising therefrom; and to move for Papers.
The noble Lord said: My Lords, the Motion before the House is:
"To call attention to the gap between rich and poor in society and to the case for a social security system that meets the problems arising therefrom".
The first question is: how wide is the gap between the rich and the poor? Is it widening and, if so, is that relevant? Or is it perhaps the price that we have to pay for economic success, however that may be defined at present?
The problem is to define what we mean by poverty. Clearly poverty must be a relative concept measured by reference to the living standards of a particular society at a particular time. It was defined very well in the Supplementary Benefits Annual Report of 1978. The definition reads:
"Poverty, in urban, industrial countries like Britain, is a standard of living so low that it excludes and isolates people from the rest of the community. To keep out of poverty, they must have an income which enables them to participate in the life of the community".
To measure poverty is as hard as defining it. However, the task of measuring has not been made easier by successive changes to the relevant statistics in recent years, all of which have somehow ended up by apparently reducing the numbers in poverty. I wish that the same enthusiasm had been applied to reducing poverty as has been given to redefining it. One estimate says that over 15 million men, women and children are living on or near the poverty line. The income divide between the top 20 per cent. of men in work and the bottom 20 per cent. is now greater than it was 100 years ago. The relative pay of the lowest paid is now the lowest on record.
At the same time as the number of relatively poor has increased, the wealth of a substantial proportion of the population has certainly increased. That is a trend we certainly welcome. Tax cuts and benefits changes together since 1979 have been worth about £40 per family per week to the top 10 per cent. of earners. The bottom 50 per cent. of families have lost nearly £8·50 per week. The total burden of tax and national insurance has not decreased. In fact it has increased from 34 per cent. of GDP in 1978–79 to 37 per cent. in 1989–90.
The total burden of tax and national insurance has increased but the weight has been shifted on to the shoulders of those who are least able to bear it. I shall give just one example out of many, although one of the dangers in a debate on social security is that it will become a battle of statistics. The top 1 per cent. of taxpayers gained £22,680 per head in one year from the tax changes in 1988–89. Their

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gain in taxation alone was greater than the total income of 95 per cent. of the population. Perhaps I may use a memorable phrase of Mr. Frank Field. He said that over the past 10 years we have witnessed,
"the most significant redistribution of income to the rich since the dissolution of the monasteries".
Alongside that massive redistribution, and indeed a part of it, has been the creation of a new underclass: the long-term unemployed, lone parents, pensioners who have nothing but their state pension, and the young homeless. The underclass itself is subsumed into a larger group. There are 9 million people on income support. That represents 17 per cent. of the population and is a 50 per cent. increase since 1979. There are also the 7 million people reliant on means-tested benefits. I have referred to the redistribution in direct taxation for the top earners. I am sure that the Minister has been briefed to point out that reducing the top rates of tax produces more revenue. I see that the Minister nods. It is quite true that the share of tax revenues contributed by the top 1 per cent. has increased by 7 per cent. since 1979. That is hardly surprising as their share of income has increased by 43 per cent. in the same period.
Alongside this redistribution of the burden of direct taxation there has been an equally massive but not so obvious change in the social security system. There has been a change from collective responsibility for social provision which can be traced from before the time of Beveridge up to 1979, to a policy where there has been a real reduction in the relative amount spent on collective public provision. That has been accompanied by the erosion of rights to benefit and the expulsion from social insurance rights of quite large numbers of people. In passing I should say that I have always been puzzled by the fact that those who preach loudest about the virtues of collective security in the matter of defence do not adopt the same argument for social policy.
Social security is a vital part of our total social policy. Some three-quarters of all households will derive some of their income from benefits at some time in their lives. From the end of the war and the time of Beveridge until 1979 there was broad consensus about social security. There was the move from flat rate to earnings related benefits and contributions and the idea of family endowment through child benefit. There was the introduction of non-contributory and non-means-tested allowances for disability. There was the earnings related state pension scheme, SERPS, and the statutory uprating of benefits linked to increases in earnings. Those and other changes which were agreed by all parties in principle were designed to prevent poverty as well as to relieve it. However, the change in policy since 1979 has been dramatic. There has been a massive switch to means-tested or, as they are termed, targeted benefits. There have been reductions in the real value of benefits and the erosion of the rights to benefit. Some benefits have been made the responsibility of employers and there has been a reduced entitlement to earnings related pensions and the restructuring of income related benefits.
There has also been the introduction of the Social Fund, which is discretionary and cash limited, to
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replace benefits which were claimed as of right. Grants of £41 million have replaced benefits of £400 million. There has been the abolition of earnings related supplements to certain benefits and now there is the poll tax. The switch to means-tested or to targeted benefits brings more and more people into the poverty trap where their effective marginal rate of loss of benefit can be as high as 60 to 70 per cent., or in some cases higher, compared with a top rate of tax of 40 per cent.
The Government have always been concerned to ensure that those who receive their income through social security benefit should not receive more than those who are in work. Sir Geoffrey Howe stated in his second Budget in March 1980 that,
"One of the biggest problems is the lack of balance between social security benefits and incomes in work … Indeed there are people whose incomes out of work exceed what they could reasonably expect to get when in work".
A similar quotation on the same subject states that,
"the first and most essential of all conditions is that the situation of the individual relieved shall not be made really or apparently so eligible as the situation of the independent labourer of the lowest class".
The second quotation came from the report of the Royal Commission on Poor Law in 1834.
We know how all this has come about and I have just explained the changes, but we need to know why it has come about. What is the rationale for this change of policy from collective provision to rugged individualism? The noble Lord, Lord Joseph, will be speaking later in the debate. We know that he was one of the architects of the new thinking in the 1970s. I wish to put a simple question to him which I hope he will be good enough to deal with when he comes to speak. If he and others had known in 1979 what the effects of the changes in policy would be—that is, the increase in poverty, the increase in homelessness, the reduction in the real value of benefits, the widening gap between the rich and the poor and the creation of an underclass—would they still have gone ahead with the changes? In other words has it all been worth while?
The rhetoric of the new thinking of that time was very attractive. It urged a policy of setting people free, rolling back the barriers of the state, leaving people to spend their own money as they wished or, as the Prime Minister put it in 1984, a change from a "give it to me" to a "do-it-yourself" society. However, I wonder sometimes whether the new thinkers of that time succumbed to the occupational hazard of all politicians and became bewitched by the resonance of their own rhetoric.
I am sure that the Minister has also been briefed to point out how much more the Government are now spending on social security compared with what was spent in 1979. There has been an increase of 39 per cent. However, half of that is due to the increased number of claimants comprising pensioners, the disabled and single parents. A quarter of that increase is due to increased unemployment and only a quarter to an increase in benefits. The value of the 11 major state benefits was 26 per cent. of average male earnings in 1979 but only 19 per cent. in 1989. That is a reduction in the real value of the benefits.
We have heard a great deal about the dependency culture and the welfare net. There are those whose

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children's private education has been paid for by grandparents through tax covenants, whose tax bill has been reduced by the full exploitation of mortgage interest relief, self-employed retirement annuities, personal pension plans, personal equity plans, business expansion schemes and the judicious use of offshore funds, and whose elderly parents now have their private health care subsidised through tax relief. Those are all perfectly legitimate ways of reducing the tax bill, but I wish that those who have benefited in that way would be a little more careful in the use of phrases such as the dependency culture and the welfare net.
I cannot hope to deal with all areas of social security and I know that other speakers in the debate will wish to do so. However, I wish to spend a few moments discussing disability benefits. The Government, to their credit, set up the OPCS surveys of disability. We were told that the long awaited comprehensive review of disability benefits would have to await the publication of the OPCS surveys. We were then told that the review would not be an independent review but an internal review inside the Department of Social Security. We now have the White Paper entitled The Way Ahead. That is a deeply disappointing response by the Government. All the disability organisations without exception are deeply disappointed with it. There was no consultation with them at all during the preparation of the White Paper. Consultation took place on the OPCS surveys but there was none on the preparation of the White Paper. We welcome the increases in disability allowances which resulted from the White Paper, but which affect only 800,000 people out of the 6·2 million disabled. However, there is nothing for the 70 per cent. of disabled people over 60.
There is one particular aspect of the White Paper which concerns the future of the Independent Living Fund on which I should like to question the Minister. When this fund was set up the Government said that the problem involved only a few hundred very severely disabled people. They gave the fund an annual budget of £5 million. At that time we warned the Government that they had the figures wrong and they were not providing enough money. The fund is now helping 4,500 people and has an annual budget of £24 million. The White Paper referred to the fund's responsibility being transferred to local authorities. That is deeply worrying as local authorities have neither the skills nor the resources to deal with this problem. We certainly do not wish to have the funding for the very severely disabled pitched into the argument that now exists with the poll tax as regards funding from central and local government. I hope that when the Minister replies he will tell us what are the Government's plans for the Independent Living Fund.
I have defined the widening gap between the rich and the poor and described the changes in the social security system which we have experienced in the past 10 years and their effect. Your Lordships are entitled to ask what should be done. First, we must change the Government. Noble Lords opposite will not be surprised to know that we have that firmly in mind. The next Labour Government will reform
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the tax system and the social security system. We shall introduce a national minimum wage. That is the key to lifting the lowest paid out of income support. The top 10 per cent. of earners have seen an increase in real earnings of 48 per cent. in the past 10 years. However, the bottom 10 per cent. have seen an increase of only 3 per cent. The taxation system will be made fairer, with a lower bottom rate of less than 20 per cent. and a top rate of 50 per cent.
National insurance contributions now raise more than 73 per cent. of the amount that is raised in income tax. National insurance will be replaced by a new social insurance scheme, with a less regressive contributory system which will also be levied on unearned income. We shall increase child benefit and remove the tax on workplace nurseries. We shall limit the total value of tax breaks enjoyed by individual higher-rate taxpayers. We shall restore the principle of collective provision for social security and reduce the reliance on means-tested benefits.
We shall restore entitlement to earnings related pensions and the earnings related supplements to unemployment benefit. Retirement pensions will be increased and we shall restore the links between pensions and increases in earnings. A new scheme for personal pensions will offer pensions which will be based on each individual's best 20 years' earnings. There will be a new bonus on the basic pension for all pensioners over 75.
We shall introduce a new range of disability benefits providing help with the extra cost of disability and a guaranteed income for those who cannot work because of disability. We shall replace the invalid care allowance with a carer's benefit which will be paid at the full basic pension rate.
We shall reform income support substantially to remove its worst and most regressive effects, particularly to help those receiving transitional relief under the 1988 Act—lone parents, youngsters aged 16 and 17 and the disabled. All payments from the Social Fund will be converted into grants and we shall widen access to the severe disability premium.
I have deliberately listed just some of the reforms of the taxation and social security systems to which the next Labour Government are committed. They will not all happen at once and they will not all happen in one Parliament, but they will happen. I am not sure why that is found to be amusing. It is a clear statement of policy, but those reforms will not all happen at once—we are a realistic party. We are accused of having no alternative, but an immense amount of work has gone into our determination to reform the system root and branch. I have listed just a few of the measures that we intend to introduce.
We are determined to restore to our system of taxation and social security the principles of social justice linked to collective provision for those needs which cannot be efficiently and more fairly met by the market. To use an old-fashioned phrase, I should describe that as ethical socialism. Others would say that it is the politics of common decency. It is the policy which we shall introduce to restore the equity and social justice which have been lost in the past 10 years. I beg to move for Papers.
3.12 p.m.
Lord Joseph: My Lords, it is tantalising to have only eight minutes in which to reply to that packed speech. I should like to quarrel with very nearly all its components. To answer the noble Lord's main question, yes as someone who takes responsibility to some extent for the strategy which the incoming Conservative Government of 1979 adopted, I should have gone ahead with that strategy. I do not regret it. Of course I accept that individual components of that policy need constant refinement in order to get them right. However, in general, as I shall seek to explain in the limited time available to me, I do not regret the general drift of the Government's intentions and efforts.
I have to be quick. I shall deal first with the gini co-efficient, the measurement of difference. There is no gini co-efficient that I can find which measures international comparisons. At home it is perhaps true, although the figures do not yet give the answer, that lowering the top rate of tax may have widened differences. However, the tax revenue from the top brackets of earners has increased, not fallen. Secondly, the number of jobs has increased. Thirdly, entrepreneurship is growing, though not fast enough.
If noble Lords will in due course look at Table 5.19 of this year's Social Trends, they will find that since 1971 the marketable wealth of the most wealthy 1 per cent., the most wealthy 5 per cent., 10 per cent., 25 per cent., and 50 per cent. has fallen through 1981 and 1986 to 1987. The noble Lord is wrong on that score.
It has constantly to be said that the party opposite underestimates the importance of wealth creation. Wealth creation depends upon giving incentives to people to take risks. Noble Lords opposite constantly emphasise the rate of bankruptcy. Bankruptcy is merely one measure of the risk that entrepreneurs take. We have too few entrepreneurs, although many more than we used to have. Upon the entrepreneurs depend the jobs, the prosperity, the resources for public services on which all our policies—on both sides of the House—depend.
I believe that any government coming into office in 1979 would have had to meet huge burdens on social security in the 1980s. There was a rising number of pensioners, including a rising number of the very elderly. There was a rising number of unemployed; and let the party opposite not think that they would have escaped the rising number of unemployed which was necessary if we were to recover any profitable international competitiveness, because, in their own five years in government, unemployment rose from half a million to 1 million. There was a rising number of lone parents and a weakening of family ties and responsibility. On both sides of the House, and I believe in the Churches, we deplore the weaker family ties. I have to accept, and hope that noble Lords will accept, that there has been a failure of schools and training to prepare many of our population for life and work. The welfare spend would have had to increase hugely, whichever government was in power, in the last 10 years.'
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Meanwhile, to help meet that increased spending, productivity, which has to pay for everything, has risen sharply in the past 10 years. However, it has not risen nearly enough and not nearly to the level of competitor countries. Savings have risen among individuals, although not as much as we need. Occupational pensions have risen, and owner occupation has risen.
Any government would have had to face great challenges in order to pay for the extra social security that those trends—which would have occurred whatever the government—imposed upon the government of the time. Yet the resources have not grown quickly enough. We had a choice.
I believe that the poverty lobby and to some extent the noble Lord who has just spoken discredit what could be a good case if only they did not overstate it so wildly. The claim that a third of our population has poverty or near poverty standards of living is just not credible. It is not believed. That is why attention is distracted from the real pockets of poverty, or at least serious pressures on resources, that undoubtedly exist.
In social security, whichever government is in power, there has to be a mix of universal and means-tested benefits, plus the encouragement of personal savings, family help, owner-occupation and charity. They all have to co-exist. No one imagines that collective help is not needed. What is needed is a mix of those different resources.
Is it wise to rely excessively on universal benefits as the noble Lord seems to suggest might be the policy of the party opposite? I accept at once that many elderly people are still very hard pressed. However, occupational pensions have been rising, owner-occupation has been rising, and the savings of a large number of the elderly are significant. To rely too much on universal benefits to avoid any being hard-pressed would involve a huge contribution increase, a huge contribution cost on the workers and an even bigger wedge than now between gross and net earnings. To provide universal benefits for those who do not need them because of their own thrift or because of occupational pensions would cause the resentment of neighbours who have been thrifty, the discouragement of savings and a disincentive to workers.
We are all aware, particularly this week, of the crisis in Swedish affairs. We are certainly not Sweden. We do not, alas, have a record of prosperity akin to Sweden's, but I recommend the party opposite to read carefully a lecture entitled The Limits of the Welfare State given by Professor Assar Lindbeck on 12th October 1988 at Birkbeck College. It is worth reading. Professor Lindbeck refers to the soaring marginal tax rates in Sweden—70 per cent. for the average Swede—permanent damage to the economy and permanent distortion of incentives. He says:
"Dentists drill wells on their summer estates rather than drilling the teeth of patients".
He adds:
"Professionals and craftsmen barter services rather than exchange them for money".

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He refers to the nationalisation of the functions of the family and to the encouragement of dishonesty. Those would be some of the results of going too far in trying to develop the welfare state on universal lines.
On the other hand, I see that means-testing—targeting, as the Government call it—also has disadvantages. It causes poverty traps, the "why work?" syndrome and disincentives and it requires a huge administrative effort. However, getting the right mix between universal and means-tested benefits, the trickle-down effect from more entrepreneurs and the rising productivity that we need under any government to be internationally competitive are all necessary.
In a more nearly perfect world, all would be good managers of their own resources, but we know that they are not. Among ourselves, we are not. Those on social security are not. All would have good relations with family and neighbours in a more nearly perfect world. All social security offices would be decent and provide privacy. All social security staff would be ultra-sensitive as well as firm. In a more nearly perfect world all claimants would be reasonable, but it is not a perfect world and we can only hope to provide our component of those factors. We acknowledge that we are far from that position now.
As for Labour's criticisms, I suggest that there is some self-deception and humbug. I am not surprised that, in explaining the policies of the Opposition, the noble Lord followed the precepts of his leader and was being "vague". In the short time available to me, I must say that the end of his speech merely gave headlines and objective without explaining some of the problems. For instance, pensions may have risen when Labour was in office from 1974 to 1979 but, because of inflation, the real buying power of pensioners rose only 3 per cent. over five years. Since 1979 the real buying power of pensioners as a group has risen 31 per cent., though many elderly people are still hard pressed.
Finally, I recommend those who study such problems to read three recent books: Losing Ground by Charles Murray; Family and Nation by Daniel Moynihan; and perhaps above all Workers and Pensioners, edited by Paul Johnson. I wish that I had had more time to reply to a packed speech.
3.24 p.m.
Baroness Fisher of Rednal: My Lords, I hope that all noble Lords will have 50 per cent. extra time as has been given to the noble Lord, Lord Joseph. I do not intend to dwell on the incomes of particular groups of people because, although income is the main factor in determining vulnerability to poverty, it is not the only one. Poverty is the combination of low income, poor and often damp housing, fuel poverty, poor education and employment opportunities and bad health. They all contribute to what is generally called poverty and, in many cases, it becomes multiple deprivation. Among those groups of people are those whom we call the vulnerable groups. They are more often than not the elderly, the unemployed, the low-paid, the single-parent families and the disabled.
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We now see in this country, as a result of recent structural changes in the economy, that there is a dual labour market comprising, on the one hand, a labour market of secure, well-paid, highly-skilled jobs offering good conditions and good employment and, on the other hand, a secondary labour market offering low-paid, temporary, part-time, low-skilled employment. As a result of the growth of dual labour, poverty creeps in with regard to low-paid employment. We see the Government having to subsidise low wages through income support instead of the employer paying what one could call a decent wage. As a result of the abolition of the wages councils by the Government, there is now no protection for low-paid workers. Noble Lords will see that industries included in the recent growth in low-paid work are hotels, catering, retail and clothing. That low-paid employment will continue to grow and will obviously cause poverty. Where do we see low pay? We see it primarily among women, black people, people with disabilities and young workers.
We also see not only cuts affecting individuals through social security payments, but also cuts to public services which have a direct bearing on poverty. I hope that when the Minister replies he will not disagree that government cuts to local authorities have increased poverty in these localities. We have seen a cut in housing. I shall dwell this afternoon not upon homelessness and the money wasted on bed and breakfast accommodation, but upon the creation of poverty because local authorities have not been given the money to build houses to provide people with decent housing conditions. A form of poverty and deprivation develops if one does not have a decent home.
On the education side, there is a lack of provision for those pupils in many of our schools who do not attain high academic qualifications. We cannot all be blessed with the same intelligence and intellect. The needs of the other groups of pupils are therefore sadly neglected. We must ensure that we offer the non-academic pupils a greater emphasis on vocational education. We see truancy on the street and on the television screen. We see the police going round supermarkets picking up boys and girls who are not at school. They are bored with school because they are classified as the non-academic pupils. We deprive those students of a reasonable education and force them into poverty as they grow older.
We could also do a great deal to alleviate poverty in the education field if local authorities were enabled to extend provision in nursery schools and pre-school education. I am thinking primarily not about opportunities for women at work, but about the family itself so that it can organise itself when it is in dire need and poverty. The nursery schools offer to those families some support and often very good advice.
This morning I heard on the radio that by selling what are called cherished number plates the sum of nearly £2.5 million has been raised. A sum of £2.5 million has been obtained for about half a dozen cherished number plates. In this Chamber this afternoon we are discussing poverty.

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I hope that the noble Lord will be able to bend the ear of the Treasury to ensure that the £2.5 million raised yesterday as well as the £3.5 million raised six weeks ago from selling number plates will go to help those in greater need and who need greater help. I am sure that this debate will reveal that there is a real need for an anti-poverty strategy. Local authorities and charities see many of these problems in the localities but they are not in a position to take full responsibility for that burden. They both take as much action as they can to alleviate the problems.
However, most important is that there must be a much more positive strategy from the Government. I feel sure that this debate will outline that need in much greater detail.
3.31 p.m.
The Lord Bishop of Gloucester: My Lords, although this debate almost inevitably must break open upon party lines, its almost transparently Biblical theme of the poor must commend some kind of response from these Benches. I believe that an expectation has grown up in recent years that the voice from the Churches must be confrontational, prophetic and denunciatory. Few of us would deny that that voice has its place. Prophetic protest against injustice or oppression is too deeply entrenched in the Judaic-Christian tradition to be outlawed. It is accredited both in the Old Testament prophets and in the words of Christ himself.
If the Churches have any commonly accepted function within the community it must include speaking for the voiceless and seeking to protect and champion the oppressed. However, I am only too aware of how easy it is for well provided clerics to raise voices in that mode. I do not believe that it is the only voice that is relevant to the matter before us. Alongside what I might call the voice from without is surely the voice and word from within—what perhaps many of us in our personal lives would identify simply as the voice of conscience. It has a corporate as well as an individual aspect and the Churches need to be its mouthpiece.
Indeed, perhaps Churches which are as much enmeshed in the history and life of society as are the mainline British Churches might hope to be as effective or even more effective, speaking perhaps more quietly as the conscience of the community than speaking necessarily always as prophets. Churches speaking in that mode may gain integrity by the fact that they share the dilemmas and problems which they address. I believe that it is important to acknowledge that Churches are property owners. They have employees and for the most part identify in their membership, uncomfortably so, more with the haves than with the have-nots of our society. If the Churches sometimes appear to be unhealthily preoccupied with questions about wealth in society, it is not because necessarily they survey those questions from the distant mountain top; it is because they also live day by day uncomfortably close to them.
I believe that we are closer to poverty than many. If begging and homelessness are on the increase and if more and more families are seriously troubled because their frail and elderly relatives are unable
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to make ends meet, the vicarage doorbell will ring more often. There is certainly evidence coming from the parishes and the dioceses to give cause for worry on all those counts.
It would be impertinent of me to offer an opinion on whether in absolute terms the less well off in our society are poorer now than they were, say, 10 years ago. The economists and social scientists must try to decide on that. However, it seems indisputable that the poor are becoming relatively poorer. I offer just one statistic which has come from the recent report from the advisory group on urban priority areas of the most reverend Primate the Archbishop of Canterbury. Over the past 10 years the gross earnings of the lowest paid workers have risen in real terms by 6 per cent. The earnings of the highest paid have risen by 36 per cent.
If there is cause for concern here, I hope that it is not in the interest of a crude egalitarianism. Indeed, our underlying response should be gladness that people are generally better off as well as that unemployment has decreased. Of course we should give credit and praise to the wealth creators and the government policies which have encouraged that advance in wealth. Incidentally, I believe that it is a caricature to suggest that Christian concern is only with the distribution and not the creation of wealth. How can that be when we believe in God as creator and when Christianity affirms, as no other religion does, the value of this world, its goods and its prosperity? But surely the point is that any such general growth in national prosperity should strengthen rather than weaken our capacity as a society to deal compassionately and effectively with those who are progressively being left further behind in the race. By that I mean those who apply unsuccessfully to the Social Fund for grants or loans; the homeless young; one-parent families; and the growing number of frail, elderly people with insufficient means for their needs.
Why cannot we offer a proper answer to their needs as we grow in prosperity as a community? The issue which faces us is whether the trickle-down theory of wealth spreading through society and the reliance on private charitable giving can be trusted to deal mainly with the increasing relative poverty of some of our people, or whether the necessary compassionate action to help them must also be firmly and prominently part of public social policy in government. Many of us must believe that both will be needed for the foreseeable future.
In the end does not much of this discussion turn on how we define wealth? We pray daily in this House for the public wealth and we draw upon the primary meaning of the word which has to do with being well, wellbeing and primarily corporate wellbeing—the commonwealth. Wealth is not just money although money is part of it. Wealth, says the dictionary, is the happiness and the prosperity of the people. Wealth creation is the increase of true wellbeing in the community—fulfilment, health and a good environment. A strong and healthy manufacturing base is part of it but it is not the whole. If we double the output of pornography, how have we increased the nation's wealth?

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Therefore our gratitude to those who have initiated this debate will surely be the greater if it helps us all to sustain a rather larger and more spiritual understanding of what the wealth of our nation truly means as distinct from a narrow and materialistic concept.
3.40 p.m.
The Earl of Longford: My Lords, the right reverend Prelate has tried hard to be neutral in political terms. However, he left most of us in no doubt that he favoured the Motion. He said without equivocation—and I take this as my own text, and it has been taken by those able speakers, my noble friends Lord Carter and Lady Fisher—that the poor are getting poorer. We start from that premise.
Of course we were glad to hear from the philospher of Thatcherism. I regard the noble Lord, Lord Joseph, as one of the most sensitive men and I hope that he will be sensitive to the objections that will be raised today to his point of view which is rather an eccentric one, if I may say so. Speaking as an eccentric myself, I regard him as well qualified to speak in that capacity.
I moved a Motion calling for a greater measure of equality nine years ago. No one can deny that that Motion has been the opposite of successful because in the past nine years, as the right reverend Prelate has pointed out, inequality has become a good deal worse. I am in danger of repeating what has been said so ably, but, mercifully, I shall exclude all figures. These have already been laid before the House by the noble Lord, Lord Carter.
In preparing for this debate some of us have studied the work of Frank Field, MP, who, I venture to say, has done more with regard to poverty and helping the poor than any individual whom I can think of. Those who have not read his recent book, Losing out, might well read it now. It was referred to by the noble Lord, Lord Carter. I do not think anyone can deny certain propositions laid down by Mr. Frank Field in that book. For example, he says that between 1949 and 1979 there was a steady move towards greater income equality. That happened in the 30 years before the present rulers came to power. Since then there has been a move the other way. I do not think that anyone can deny that. I presume that it must be regarded as deliberate. I do not think that it is accidental. I do not believe that the noble Lord, Lord Joseph, would say that it is regrettable; he would probably feel that it is essential. There is no doubt that it happened.
There is no doubt that for 34 years, or whatever the period was, after the war the Conservative Party was in power half the time. Therefore this steady move towards greater equality was promoted for half the period by the leading Conservatives of the time. I shall not list them all because so many are sitting opposite. I mention such great figures, no longer with us, as the Earl of Stockton, as he became, and Lord Butler. They promoted this greater move towards equality. Then along came the philospher of Thatcherism, the noble Lord, Lord Joseph, who devised a totally different approach. We have experienced that for good or ill for the past 10 years with Mrs. Thatcher at the helm.
Lord Joseph: My Lords, does the noble Earl recognise that at the end of those 30 years we were the poor man of North-West Europe?
The Earl of Longford: My Lords, I do not recognise that. When one considers life in this country, to speak of extreme poverty is an exaggeration. If one talks about work among the poor one could not say that they were stricken. The poor are the poor now. But no one will pretend that suddenly some tremendous change has overtaken the poor in the past 10 years except that their position in relation to the rich has become very much worse. That is generally accepted.
The position has been brought about in three ways by Thatcherite rulers inspired intellectually by the noble Lord, Lord Joseph—from the highest principles, of course. The first has been to allow the free market a good run. I do not know whether anyone reads the Sunday Times. I read it faithfully. A week or so ago we were told on the front page that a representative section of the business leaders of the country were giving themselves a 28 per cent. increase in reward at a time when the Government were calling for restraint and workers were receiving 8.7 per cent. In other words, the business leaders under the free market were giving themselves three times as much as the workers. I suppose that that is applauded by the noble Lord, Lord Joseph. That is in accord with Thatcherism at its most elevated. I have heard no expression of regret about it.
Secondly, there have been the Budgets. I do not think that anyone now will disown Mr. Lawson's Budgets. I suppose that there is a slight tendency in circles opposite to regard him as a scapegoat and to take the attitude that if anything has gone wrong—we are paying fabulous interest rates and so on—it can be put down to Mr. Lawson. That would be rather churlish. By and large we have to regard the Lawson Budgets as Thatcherite. They have redistributed to their best ability the wealth of the country between the rich and the poor to a considerable extent.
Thirdly, there have been the many social security and related measures, regaled by my noble friend Lady Ewart-Biggs when she opened a debate on citizens advice bureaux in this House recently. My noble friend described various measures which have had an effect. Presumably everyone agrees that they have had some effect. I am afraid that we have to agree that the effect has been very bad.
Those who have been in the House some years and who have heard me often know that I have been involved in a centre called the New Horizon Youth Centre for homeless young people which I founded about 20 years ago. I am still a patron. It now looks after many young people. If one goes to that centre today and asks young people, "What do you do with your life", they say, "We are beggars." That is something new. Begging has become normal as a direct result of government policy.
There is much more to say but my time is up. The more that is claimed by the noble Lords opposite about the success of this Government, the more disgraceful it is that the poor should be treated in this way.
3.48 p.m.
Baroness Faithfull: My Lords, I wish to speak on four topics. I have spoken on them in your Lordships' House before. I hope to do so again, but I speak on the principle, "Try, try and try again, even if you do not succeed to start with".
Is the Minister able to say anything about the child benefit? The question has been asked before; we shall probably ask it again. The Equal Opportunities Commission has circulated its pre-Budget policies for the next year. It says:
"Child benefit, payable to all mothers in recognition of the costs of caring for children, has been frozen by Government for three consecutive years … almost 100 per cent. of mothers claim it because it attracts no poverty stigma … A decision to increase Child Benefit in the Budget would be the single most effective fiscal contribution possible to support family life".
I appreciate and understand the comments of my noble friend Lord Joseph that universal benefits are not always possible to afford even if one wanted them. When the noble Baroness puts forward a wonderful programme of measures for the Labour Party—if it is in power as the next Government—will she tell us how it will pay for them? That is vitally important because if the rate of inflation rises not everyone will benefit. I realise that child benefit is a universal benefit, and I applaud it, but if we cannot afford to pay it I am sure we can work out an arrangement whereby it goes only to the people who most need it.
My second point relates to the tax on child care. It is Her Majesty's Government's policy to persuade women to go out to work. Therefore, I speak feelingly on the care of children. Unless children are well cared for, to persuade women to go out to work will not be cost-effective. If the children suffer, it will be expensive later on in their lives. Removing tax on workplace nurseries and employer child-care payments could allow up to half a million mothers to return to work and many more to continue working after their babies are born. Many employers who are planning to introduce child care initiatives in order to recruit and retain staff are concerned that treating child care as a taxable perk undermines their efforts.
I put forward this view because if women are working there must be good child care facilities. My personal view is that I would prefer all women to stay at home and look after their children until the age of three, but that is not always possible under our present system.
My next point relates to the decision on the Social Fund taken by the Law Lords in this House. What is to be the future for that fund? Other speakers in this debate have also raised this point. To give a family a room, a flat or a house but nothing to put in it is again not cost-effective, not kind and not the best way to rehabilitate families.
My final point is perhaps a point on which I shall spend most of my time in this debate. I refer to the young, as have other noble Lords. All the voluntary organisations in the field of child care—the National Children's Bureau, Dr. Barnado's, the Children's Society, the National Children's Home and the NSPCC, which is holding its annual general meeting today—are deeply concerned about income levels
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for young people of 16 or 17 years of age. I applaud the policy of Her Majesty's Government in persuading 16 and 17 year-olds to remain at home if they can do so and if they can find a job in their own area where they can remain under the auspices of their own families, friends and the community. However, having said that, there are a few youngsters—regrettably, a growing number—who have been in care, who have no home background or home on which to depend, nowhere to go at Christmas, and so on. I contend that it is those youngsters who are sleeping in the doorways of our cities. I understand from Scotland Yard that it is the homeless youngsters who are victims of the drug trade, either as runners or takers of drugs. I implore the Government to think yet again in regard to the 16 and 17 year-olds, if not for compassionate reasons, for the reason that it would be cost-effective on a long-term basis to look after such youngsters. An examination of the histories of people in prison will show that many of them are these youngsters, and that is expensive for the country.
I have with me figures showing what the 16 and 17 year-olds are living on but I shall not give them now in view of the shortage of time. However, people ask how any scheme to help them would be administered. I believe that it would be perfectly possible to handle this through the social security system and the social services. People ask why these 16 and 17 year-olds leave home. I spoke to three girls last week whose mothers' boyfriends had been interfering with them. They had every right to leave home and it was right that they did so. However, it is equally right that we as a community should care for those youngsters.
I know that on 13th March 1989 the Minister, Mr. Nicholas Scott, made some concessions for these youngsters but it is apparent from any examination of their incomes that they cannot live on what they receive. I ask my noble friend the Minister to look again at this matter in view of what it means to our society and, perhaps more important, what it means to those youngsters.
3.55 p.m.
Lord Dean of Beswick: My Lords, the House will understand if I restrict myself to the people covered by the word "poor" in the Motion on the Order Paper. I refer explicitly in my few minutes to perhaps the poorest sector in the community—those people without even a roof over their heads. Much has been said in this House over the past few years on this subject and I know that all quarters of the House have generally pressed the Government to do something about this as a matter of urgency.
There is a forceful argument that strikes me for taking action. In the past we have periodically—week after week, month after month, during Question Time and in debates—referred to the highlighting of the deteriorating situation which was brought to national notice first by the Duke of Edinburgh's Commission, then by the Audit Commission Report and then by the Archbishop of Canterbury's Faith in the City. Now, only yesterday, we have an independent report from the Joseph Rowntree Memorial Trust produced by Professor

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John Greve. He reached the same conclusions—that the homeless situation in this country can only be dealt with by a massive building programme of houses for rent in the public sector.
I was saddened when I heard the Minister, in answer to recent Questions from myself and others in this House, say that that is no longer the role of local authorities; that they will not be building many more council houses and that the Government will not let them because that is the role of the housing associations. I have some figures showing that in 1975 the housing associations built 14,000 houses. In 1979—the last year of premiership of my colleague and noble friend Lord Callaghan—the housing associations built 16,000 houses. Since then, under the existing Government, every year the figures have plummeted downwards. The boast that the Minister keeps making—and the new Minister, Mr. Michael Spicer, made on the radio yesterday; I heard him—is of a tremendous increase in financing for the housing association movement in order to assist in solving the problem of homelessness. In fact, it will only bring them back to the figure achieved in 1979. That is supposed to be progress.
The facts are of course that even with the increases now coming through from the Government towards housing in the rented sector they will still only reach in real terms one-third of the total made available by the last Labour Government just before they lost power. There is no other agency in the country to do this. It is not the job of private builders to provide low-cost housing for people who cannot afford a home. It can only be done in the public sector.
Quite unexpectedly I heard the Minister being interviewed on the "Today" programme yesterday morning. He was giving all the answers which I have heard given by various noble Lords opposite in your Lordships' House when asked what was the cause of homelessness and what were the answers to the problem. What shocked and saddened me was the monumental indifference or lack of knowledge of the subject shown by the Minister in his answers. His failure to grasp what was happening in this country was towering.
He said that one of the main causes—and this has been referred to today by the right reverend Prelate—of homelessness in this country was the desire of young people to opt for independence earlier in their adult life. He said that it is not a phenomenon exclusive to this country but that it is happening all over Europe: young people want to leave the family home at an earlier age. When he gave that answer he reminded me of Canute sitting there hoping that things would happen. He said that those young people should go back home to mum and dad, get a job and not come to London and the other big cities. If anybody could switch us back to that kind of system, it would be ideal. I have two daughters of my own; one is married and one is not. They did not want to stay at home with mum and dad. They were lucky and were able to fend for themselves. However, many children are the victims of circumstances and let us make no mistake that many are not from good homes but are from bad homes where they have been poorly housed in areas of serious deprivation.
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Let us see what Professor Greve discovered. The findings of his report include that homelessness has doubled since the present Prime Minister came to power and the figures are still rising. One thousand families asked local councils for help with homelessness-related problems every working day. Homelessness is growing fast among young people, particularly those aged between 16 and 18 who are no longer entitled to any social security benefits. That is not the fault of anybody other than the people who are managing the affairs of the country—it cannot be. They are responsible for that situation which I believe was deliberately created. One million households, 3 million people, have been registered as homeless over the past decade and homelessness is now affecting a wider spectrum of people.
I am sorry to burden your Lordships' House, but let us look at the findings of another recent report. A new report reveals that 16 per cent. of people who rent their homes are in arrears with their payments and 5 per cent. of households face difficulties with payment. A survey on credit in Britain carried out by the Policy Studies Institute indicated an astronomical rise in debt on a general basis.
Once again I appeal to the Government. All I can say is that if the Minister's answers to the problems of homelessness in this country are those which he gave yesterday, he has no grasp of the magnitude of the problem. I urge the Government to make available money to local authorities to start building programmes once again so that we can eat into those appalling figures and once again make sure, with pride, that people are provided with reasonable homes at lower rents.
4.4 p.m.
Lord Allen of Abbeydale: My Lords, I propose to devote my few minutes to two specific issues. The first relates to the way in which the poll tax in certain respects interlocks with the social security system. Those who are poor and also disabled or very old and living on income support will be eligible to claim an 80 per cent. rebate. Although they will have to pay the remaining 20 per cent., the personal allowance under income support has been increased to take some account of that liability. However, that increase relates to the national average and in the current year has been fixed at £67·60 per year. For some reason, the increase is slightly less than that for married couples and those under 25, although they do not have to pay any less tax.
That means that someone on income support living in Wandsworth—where the 20 per cent. will be under £30—will be handed a nice bit of extra spending money. How that squares with the Government's doctrine of everyone contributing to local government expenditure, I find slightly obscure. However, if the individual is living in an area where the poll tax is well above average, there will be a shortfall.
For example, a couple with two mentally handicapped children over the age of 18 living at home who do not qualify for complete exemption could be very hard hit indeed. An extra £100 or £200 may not seem all that much these days but if

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you are living on the edge of poverty and have no capital resources, that can be a most formidable sum. The prospect of mounting debts and enforcement procedures among the very poor and disabled is singularly unattractive.
Nor, to my mind, does that fit in with the policy of community care. There could well be a reluctance to give a home to a relative if that carries with it a financial penalty which can be avoided if the individual is instead in residential care. I believe that the Govenment may well live to regret the fact that they secured the rejection of the amendment passed in this House to deal with problems of that kind.
There is one other rather different problem. I know of a couple not on income support with a handicapped son. They made structural alterations to their house to make it possible for him to continue to live at home and were granted rate relief. Their rates came down to £140. Their poll tax, even with transitional relief let alone what is to come, comes out at more than double that. That is not an isolated example and it illustrates the problem which seems not to be catered for by the social security system in arrangements which substitute a personal tax for a property tax.
My other point relates to mobility allowance. I know that the noble Lord who is to reply to the debate will not be surprised that I am raising it today. I was pleased that the Government performed one of their more graceful U-turns and extended the allowance to those who are both deaf and blind, something which they refused to do when we discussed an amendment to last year's Social Security Bill. However, that amendment, which was passed here on Report and then rejected in another place, also attempted to secure eligibility as regards the allowance for an individual suffering from severe mental handicap such that he is unable to walk without physical control by another person. What we had in mind was an individual who is, literally, capable of walking but no one can tell where he will walk unless physically controlled. He may go sideways, backwards or straight under a bus or he may lie down screaming in the highway and be quite impossible to manage on public transport.
MENCAP calculated very carefully that the total number in this group might be about 4,400, but on Report the Government said that the figure was 100,000. In another place they went one better and said that the figure was 125,000. We were puzzled, since the OPCS survey did not identify the group covered by the amendment. We were left to conclude that the Government had cobbled together a whole variety of people—the mentally ill, sufferers from Parkinson's Disease and others—and not just the mentally handicapped, which was the sole category to which the amendment related, and have also applied a less stringent test to supervision.
In reply to a Question on 12th October last (at col. 565 of Hansard) the noble Lord, Lord Henley, produced yet another figure; this time it was 140,000. He said on that occasion that the figure probably represented the total of severely mentally handicapped people in this country. Indeed, it might.
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He conceded that not all those people would be claimants, but he would not accept the figure of 4,400. In subsequent correspondence, as he will recall, he plumped for a figure of 50,000. He was good enough to say that that figure should be regarded as an order of magnitude rather than as a precise estimate.
MENCAP thinks that it is blindingly obvious that the total involved must be far below the Government's latest figure of 50,000. That figure represents no fewer than one in three of the total of severely mentally handicapped people in this country. It is ludicrous to suggest that anything like that proportion could possibly be thought to qualify under the conditions that we suggested. MENCAP still believes that the numbers involved must be well below 10,000. Some of those people may qualify for the £10 a week mobility component of the new disability allowance promised for 1992. However, I should not like the Government to think that that allowance of 10 is an adequate substitute for the full mobility allowance which these few thousand people need and deserve just as much as do the half million present recipients of the allowance but from which they are excluded because their condition has no known physical cause.
I must leave the matter there. It seems to me that here are two instances where some of the poorest and most unfortunate members of the community have reason for thinking that the social security system, whatever its merits, falls some way short of perfection.
4.12 p.m.
Lord Cocks of Hartcliffe: My Lords, others more experienced and expert than myself have dealt and will deal with detailed matters of social security benefits and kindred issues. I should like to speak for a few minutes about the gap between the rich and the poor because we often take for granted manifestations of the class differences in this country which are apparent to visitors.
The east end of our major cities is where the traditional working-class homes were built. That was no coincidence. The prevailing winds from the Atlantic, the West and South-West blew the pollution towards the east side of the cities and that was where the working-classes had to live, while the more salubrious western areas were the higher class residential parts.
Our whole approach to this subject is bedevilled by departmentalised thinking, which in turn stems from the whole nature of our education system. There is far too great an emphasis on higher education. I should very much like to support what my noble friend Lady Fisher said in this regard. If we debate higher education or the matter is touched on in your Lordships' House, the Benches are absolutely packed and every nuance of the matter is explored.
We recently had an example of that with the passage of the legislation on the Government's student loans proposals. We had a great deal of special pleading. As an example of what I am trying to convey to your Lordships I should like to give one

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example of some of the lobbying to which we were subjected. I am sure that, like myself, other noble Lords received a communication from the British Dental Association asking for support for an amendment which stated:
"Students on courses of more than three years duration shall have their loans cancelled for any years subsequent to the initial three years of their course".
The letter went on in explanation,
"The Association is anxious that the Bill should not discriminate against dental students who undergo a rigorous course of five years duration together with a long academic year of forty-five weeks. Long hours and long terms provide little opportunity for dental students to supplement their grants with part-time work".
It really needs a latter-day Charles Dickens to do full justice to that situation, which is supposed to wring our hearts. What is the reality? The British Dental Association figures tell us that the cost to the public for each dental student per clinical year is £23,000 to £24,000. What are the rewards for surviving that appalling assault course? The figures given by the General Dental Practitioners' Association show that the net income for dentists in 1989 was £24,920 per year. The review body for doctors' and dentists' remuneration in its 20th recommended report, Cmnd. 937, said that the target net income for dentists should be £29,740. We need to put such figures into perspective; otherwise we simply go into little pockets of special pleading for various groups and do not see society as a whole.
During the debates on the student legislation I wondered whether we were getting matters entirely out of proportion. I asked the noble Baroness, Lady Blatch, about comparable figures for student support in other countries. I shall not weary your Lordships with the answer, which runs to an entire side of foolscap, but the upshot was that the comparable figure for full-time and part-time students in England and Wales at 1984 prices amounted to £770 per year. For the same year the figure in the United States was £270; in Japan it was £30; in West Germany, £70; in France, £180; and in Italy, £40. We never seem to get down to the basis of how we are running this country in comparison to other countries. We struggle along with a lot of stereotypes and shibboleths. Occasionally we should take time to try to puncture some of these.
My noble friend Lord Dean returned to the theme of homlessness, which he pursues with great assiduity. I also have my theme; that we are actually paying students more public money to study away from home when it is not necessary and are exacerbating the homelessness problem. We ought to remember that only 7 per cent. of working-class children reach university, yet a very large proportion of the taxes paid in this country which go to supporting the privileged in higher education are paid by working-class people.
Hospital provision is another example. In my city of Bristol the first proposal for a hospital on its south side was in 1935. Nothing came of that because there was a monstrous redevelopment in the centre of Bristol, on a grossly unsuitable site solely because of
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pressure from the university, which wanted its own precinct, and the consultants, who wanted to be near their posh consulting rooms in Clifton. The general population who made up the patients received no consideration at all.
I believe that there is also trouble brewing for the Government over the proposed closure of Westminster Hospital, where an ill-thought-out scheme is likely to come unstuck. Although the stereotype of Westminster is one thing, there are actually thousands of working-class people who live in the area who should have more consideration.
We should remember that higher education is a privilege. Those of us who benefited from it and are in positions where decisions are made should stand back from time to time, look at society's inequalities objectively and realise that many of them have been created over the years by the products of higher education. Educated people know how to lobby and how to exert pressure to achieve their aims, which are gifts usually denied to the people who are suffering far more from the system than anybody else.
4.20 p.m.
Lord Lucas of Chilworth: My Lords, if the noble Lord, Lord Cocks, will allow me to say so, I found his speech particularly invigorating in that he drew for the first time from that side of the House meaningful comparisons. He finished by suggesting a manner in which we might make matters a little better. He said that perhaps we should stand back and look a little objectively at some of these problems. In my view that is the major fault, if there is one, with the funds which the Administration which I support on this side of the House make available.
The Government are spending about £1 billion a week on social security and next year they will spend something like £10 billion on a whole range of benefits for the family. Yet for all that we find, as the right reverend Prelate the Bishop of Manchester said in last week's debate on the citizens advice bureaux that those at the bottom of the scale go down even further. However, he admitted:
"It has been especially important to have an organisation such as the CABs in our country in recent years because of the growth in the numbers of the relatively poorest in our society. Poverty was once much more widespread in Britain than it is today".
He went on to say:
"The fact that the poorest are a minority in society means that the pressures on them are that much greater". [Official Report, 7/3/90, cols. 1186 and 1187.]
And there was nobody who dissented from that. Nor I think is there anybody this afternoon who would dissent.
But the noble Lord, Lord Carter, in his opening speech which my noble friend Lord Joseph described as a packed speech, put forward a whole range of statistics and numbers which were quite meaningless. Again the noble Lord, Lord Allen of Abbeydale—and I am sorry that he is not in his place—brought forward another range of figures, but nobody can agree about all these things. I expected the noble Lord, Lord Carter, to suggest to those of us on this side of the House exactly what his party

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would do to narrow the gap, but, sadly, he did not do so. Surely that is something that we might have heard.
I want to touch on the Social Fund about which my noble friend Lady Faithfull spoke in respect of the Law Lords' decision. It seems to me, although an enormous amount of money has been put into the Social Fund, that because it is a discretionary system there are inequalities, and I find it difficult to reconcile in my mind £75 million worth of grants to the end of October 1989 and some £200 million awarded in loans.
Again, going back to our debate last week, it seems to me rather counter-productive to load upon those who are in the disadvantaged band of our society further loans to help them out of their difficulties. I really think that my noble friend the Minister should have another look at the disposition of the moneys that are made available. I think that that was implicit in what the noble Lord, Lord Cocks of Hartcliffe, had to say in taking another objective look.
In defining the poor the noble Lord, Lord Carter, said that poverty is represented by an income so low that recipients cannot engage in the life of the community. The noble Baroness, Lady Fisher, said that poverty is low income, poor health and poor housing opportunities, unemployment and so on. The right reverend Prelate suggested a rather different definition. There cannot be one single definition.
But what we should remember—and I learned this from my association with the citizens advice bureaux—is that, however little money there is available, it is those with the least who are the least able to manage their financial matters. When you get on the wrong side and into debt, all the other problems such as homelessness, of which the noble Lord, Lord Dean of Beswick, reminded us, compound the great difficulties and push those disadvantaged people even further down in the system.
I believe it is right and proper that the department of my noble friend the Minister should pay greater attention to education and publicity in that area, as well as in the area of benefits and entitlements. Is it not surprising that so many entitlements are not taken up? For example, the family credit advertising campaign has already increased the total case load from 280,000 to 320,000. It was not the need that drove people to ask; it was the fact that under the system it is an entitlement that has been brought to their attention and they have taken advantage of it. I believe that there are a number of other entitlements, quite unbeknown to potential recipients, which should equally be made known to them.
In a free market society, in which I believe, there will always be a differential, whether it is between the disadvantaged and those not disadvantaged or whether between the so-called rich and poor. But without the kind of free market economy that this country has enjoyed in the past 10 years, the general wealth of the nation, the general upsurge in the economy, could not have been achieved; and those advantages have been passed on—though not necessarily in proportions acceptable to all noble Lords—right across the entire range of our society.
4.28 p.m.
Lord Stallard: My Lords, I should like to start by thanking my noble friend Lord Carter for initiating this debate, and at the same time I should like to sympathise with the noble Lord, Lord Joseph, in his frustration at not having enough time to develop the points that we should all like to develop in a debate such as this.
That the gap between the rich and the poor has increased during the period of office of the present Administration is an unfortunate fact of life; and the noble Lord, Lord Joseph, defended that fact of life. Ever since the 1980 Social Security Act, their first Act—I was a Member of the Committee which considered the Bill in the other place—there has been a series of cost-cutting exercises to reduce public expenditure, mainly at the expense of social security budgets. Even though the most recent uprating of benefits orders for the 1990–91 period contained one of two helpful provisions, they were designed to effect overall saving of some £320 million. That has been the pattern right from the beginning of this Administration's social security legislation.
I want to use my few minutes to talk about the problems of the elderly among whom are some of our poorest people—pockets of poverty, the noble Lord, Lord Joseph, I think, called them. I should like to ask the noble Lord who will reply to the debates whether he has had a chance to read the current issue of Pensioners' Voice, the official non-party publication of the National Federation of Retired Pensioners. Under the banner headline, "We stand aghast", the paper prints a reply from the Parliamentary Under-Secretary of State for Social Security on behalf of the Prime Minister, to whom the national federation had written and sent a petition of 110,466 signatures calling for the restoration of the link between pensions and average earnings.
I have not time to enlarge on the Government's record on petitions. But it is not very good if we remember the 5 million signatures on the ambulancemen's petition. I shall not read the whole of the reply but the first paragraph, following the customary apologies for delay in replying says that,
"we do not see uprating pensions in line with earnings as the key factor in improving pensioners' incomes. It is not simply the level of basic pension, but pensioners' total incomes which is the true measure of their well-being".
That indicates government thinking. I do not accept it. But that is what they think on the issue of pensions. I wish I had time to quote the rest of the reply to a very good case put up by the pensioners. However, it is indisputable that the breaking of the link has had a devastating effect on pensioners' incomes. The level of the basic pension would now be significantly higher had that link been maintained. The single pension would be £11 per week more than it is now, and the pension for a couple would be somewhere in the region of £17.55 more. The 7.6 per cent. increase in the state pension announced by the Secretary of State for Social Security on 25th October, based on last September's cost-of-living increase, does not compensate for the high monthly prices of between 7.3 per cent. and 8.3 per cent. experienced from April 1989, when the

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pension rose by just 5.9 per cent. Yes, the basic pension, so far as I am concerned, is a major element in the income of pensioners seeking to maintain some independence and some dignity.
It is also a fact that 60 per cent. of older people derive at least three-quarters of their income from the state pension and are therefore extremely vulnerable to these constant changes in social security benefits. Changes in housing benefit and heating allowances, in supplementary benefits and in other respects have all pushed pensioners further down the list so far as incomes are concerned. I do not have time in this debate to develop the whole social security scene, much as I should like to, and so I will bide my time until another occasion.
However, I should like to follow on from what the noble Lord, Lord Allen of Abbeydale, said. I should like to mention the latest and most savage attack on the incomes of thousands of pensioners: the community charge. In the debate about the gap between rich and poor, this must be a prime example. Even some rich people have expressed embarrassment at their latest windfall and are making their views known in public. Age Concern has received over 50,000 requests for copies of its fact sheet on the community charge. Voluntary organisations and pensioners' groups all over the country are inundated with queries from pensioners who are worried sick about the charge, coming as it does, on top of extra charges for gas, electricity, water, telephones, television licences, rents and heating and increased standing charges, promised by this Administration. Even those pensioners living alone, who were previously paying high rates, know that all these increases will more than wipe out any gain they may have been led to believe would result from the community charge. They are also worried, and they are the gainers.
The community charge benefit system is still so complex and confused that even the staff of local authorities do not understand it. They are supposed to be implementing it, but they do not understand it. I have spent hours studying it and I think I now have a basic understanding. For example, the Government have maintained that the charge will be related to a person's ability to pay through the community charge benefit system. Yet although the charge, so it is said, is intended to promote individual accountability and each person will receive an individual demand, for a couple the rebate depends on the savings and incomes of both partners, irrespective of the couple's personal financial arrangements, and any rebate is shared between the two of them: this, in the year of the introduction of independent taxation, is almost beyond belief.
The limit of £8,000 of joint savings means that a couple, most of whom have scrimped and saved to put away a few pounds to ensure a little decent security in retirement and a decent burial when the time comes, are now being severely punished for their thrift by this Government. This is not a problem which will affect the rich. So the gap gets wider with every new government initiative. How can that be defended? We are told that compensation is being made in the income support rates for the 20
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per cent. poll tax that claimants will have to pay. This compensation was added into the income support rates for 1989–90 on a one-off basis, and the £1.15 per week compensation per adult will be significantly less than the amount which many claimants living in areas with above-average areas of poll tax will have to pay.
Likewise, the transitional relief proposals are intended to provide relief for those whose community charge bills are more than £3 per week over the 1989–90 rates bills, but only so long as the local authority remains within the spending limit of the Government. As many local authorities of all political persuasions have announced community charges in excess of the Government's figures, pensioners will still face increased charges in excess of the £3 relief it is alleged they will get, if perchance they find out about it and happen to claim it. It could be as much as an extra £5 they will lose on top of that.
I have not sufficient time to examine the issue in greater depth; I should have loved another half-hour to go into the alternative social security system. We know that it must be expressly sensitive to individual needs and that it must be comprehensible to the general public as well as being capable of removing the tax benefit poverty trap. The present system does none of those things. The system mentioned briefly by my noble friend Lord Carter in his opening speech will. We are pledged to it; that is what we will bring in.
4.36 p.m.
Baroness Ryder of Warsaw: My Lords, in our society, as a consequence of its very nature, sadly there will always be a gap between rich and poor. What is needed, as much as anything else and more now than ever, is the element of caring: that people should care about the welfare of each other and that governments should care equally for every level of society, and especially for the poorest level of all.
With this in mind, I should like to bring to your Lordships' attention three matters which need our urgent consideration. First, as regards the poll tax or community charge, it is now very obvious that the abolition of domestic rates and the substitution of poll tax means that the well-to-do will benefit greatly while the poorer members of society will have to pay more. True, those receiving supplementary benefit and those on a very low income will benefit, but, in setting a figure for these rebates, do the Government really understand how much it costs to run a home today? Many people cannot even fill out the forms, let alone understand what the tax is about.
I understand that to qualify for any rebate a married couple are allowed £8,000 capital between them. I also understand that two unmarried people living together are allowed to have £8,000 each. This is not only unfair but an encouragement to an increase in immorality, with all its consequences. Could the possibility of a negative income tax be explored as a means of levelling up the income of the poorest members of society to an acceptable level?
Secondly, in regard to education, the gap between rich and poor in our education system is becoming

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wide and wider. In the private schools, small classes with fulfilled and enthusiastic teachers, and often superb facilities, combine to give the children of those who can afford to pay the best possible start in life. In the state schools, large classes, truant children, unhappy and pressurised teachers, inadequate supplies of books and poor equipment mean that increasingly the children whose parents cannot afford to pay have to start life at a crippling disadvantage. Education is the most precious gift we can give our children. In the state schools the gift is fast becoming a liability.
Furthermore, the proposed student loans system will be a heavy burden on those students whose parents cannot afford to pay for their education altogether. Would not the abolition of the loan system and the social fund and a return to a system of non-repayable grants for those who prove to be in need be the answer?
Thirdly, I turn to public and private medicine, nursing homes and residential care for the sick and handicapped. My greatest concern of all is for the sick and handicapped. Let us face the fact that there is a great difference between public and private medicine. No longer can those in the public sector expect to receive the treatment they need regardless of cost. The new provision causes serious concern that a sick person who is not in the private sector will get not what he wants but what his local health authority or medical practice can afford.
There are many people in our society today suffering from long-term diseases and disabilities who simply cannot cope in their own homes. They need dedicated 24-hour care from qualified nurses, and in an atmosphere that should be as homely and non-institutional as possible. If such people have sufficient money and can afford to pay the full cost of their care, there is a wide choice. However, if they have no money and can rely only on the DSS grant of £235, rising only to £245 in April 1990, then the choice is very limited indeed.
In very many of the Sue Ryder homes the cost per patient is over £500 per week, which has to be raised year in, year out by supporters who are becoming more and more disillusioned and bewildered by the Government's attitude. Speaking for the foundation which bears my name, we are inundated day and night by a host of demented people of all ages who are literally desperate for help. I shall gladly take any noble Lord to see the dreadful conditions in which they exist.
I should like noble Lords to imagine the dilemma and distress caused unnecessarily to thousands and thousands of silent sufferers. We may not think that they are vote catchers but, believe you me, the supporters who have to raise the money are. We should be ashamed that in this very materialistic society we have these shocking and deplorable gaps. Is no one in the Government going to show understanding and imagination and offer real help and not just make purring noises, referring to us as the private sector and often with remarks such as "good luck to you"? This gap is not only totally wrong but shocking.
4.42 p.m.
Baroness Seear: My Lords, I agree with the attack made by the noble Lord, Lord Carter, on the degree and depth of poverty experienced by certain sections of the population in this country today. Before he nods his head in too much approval of what I have just said, however, I do not accept either his analysis or his prescription. Before the Labour Party makes so much of what has happened to the change in income tax level, it should remember that the level was changed from the quite absurd—and the party admits by its present schemes that is was quite absurd—top level of tax of 83 per cent. for income and 98 per cent. for investment income.
Nobody who knew his way to a good accountant ever paid that tax but that is the unreality of the situation which Labour left behind. The level of tax was calling aloud for a very substantial change. But that does not justify a great deal of what is going on at the present time. I do not agree with the noble Lord when he advocates a minimum wage. My party has long believed in a minimum income supported by a modest but real and secure citizen's income or basic income, not at subsistence level—because that cannot be afforded—but at a level that would be certain as a fallback so that everybody would feel secure.
I know very few economists of any repute who support a minimum wage. I remind the Labour Party that it was the undue increase in the minimum wage in France which had a great deal to do with President Mitterand having to go into reverse with many of his socialist policies. However, I agree that we are ashamed at the level of poverty that is seen in our cities day in and night in particular.
I believe that there are many noble Lords on the Government Benches who think the same and I am certain that the noble Lord, Lord Joseph, is among them. The Government will say, "We should like to do more but it will cost too much". I do not wish to encroach on the discussions which will follow after next Tuesday, but I say, as a throwaway remark, that there are certain measures which the Government can take which would release resources in order to alleviate some of the worst and most blatant examples of poverty which exist at the present time.
For example, the Government could get rid of MIRAS for higher income tax payers. It is absurd that the wealthy should be allowed to receive 40 per cent. MIRAS because they are paying tax at that rate. That is an absurd allocation of resources. Similarly, the Government could change the strange principle whereby the national insurance contributions paid by employees stop increasing at a level of about £17,000. There is no reason at all why the contribution should not be raised at least up to the level at which the higher rate of income tax is paid.
I shall be puritanical for a moment and it does no one any harm to be so from time to time. I recommend that this year the Chancellor should not be afraid of increasing taxation on tobacco and drink. In both cases there is a strong health argument for increasing the taxes, both of which have been under-increased for a very considerable length of

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time. Those are three measures which the Government could undertake. I anticipate their reply: they will say, "We should like to do all these things, but we cannot find the money".
There are a great number of other provisions which many of us would like to see put into effect. As other speakers have done this evening, I wish to concentrate on two particular groups where poverty is most acute. I refer to the pensioner who does not have any substantial additional income apart from the basic pension. I am the first to agree—and I am sure that there are many in your Lordships' House who also agree—that if he or she has a sizeable occupational pension or some other form of income in addition to the basic pension, then such a person may be quite comfortably off as a pensioner. These people have got rid of the mortgage and got rid of the children and they may well have more spending power than ever before.
However, the vast majority of pensioners are not in that position. The time may come when they will be, but that is not the situation at present. The pensioner who is dependent on the basic pension is extremely poor at the present time and at an age when it is very difficult to do anything about the situation for himself.
I concentrate on that group. There are a number of measures that could be taken. We should restore the link between the basic pension and earnings rather than with the RPI. The wealth of the country has increased—I pay tribute to the Government for some of the things they have done in this respect—but that is all the more reason why pensioners should have the opportunity of sharing in the increase in national wealth. To limit the increase in pensions to the RPI rather than to earnings is a situation that we should not tolerate.
The Government should consider not taxing the basic pension. It should be removed from tax altogether. If you like, that is an instalment on the idea of a basic income, though I have not time to elaborate on that point. There would be one very advantageous effect. Not only are people on the basic pension extremely hard up, but there is also a very great deal of hardship felt by those who are just a little above that level of income. In one way or another they have accumulated some additional resources—enough to push them into paying tax. That is absurd. If the Government were to remove tax on the basic pension then such people would be in a very much better position. The additional income which they have accumulated with so much difficulty would be theirs because they would not then reach the minimum level at which tax is levied.
I wish to make one further point. I think I heard the noble Lord, Lord Lucas of Chilworth, speak about debt, although I did not hear any other noble Lord refer to it. Debt is both a consequence and a cause of poverty. It is time we tried to do something far more constructive about it. The Government should give much more positive encouragement to saving. I hope that the Chancellor of the Exchequer has been thinking about this.
My party has proposed a registered savings account into which people could take out of their
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income up to a certain level a given amount of money on which they would not pay tax until they took it out of the account. This would encourage people. At the moment, saving is channelled by our tax system into either property or pensions. It would be far better if there were a level playing field, to use an overworked phrase, in regard to savings so that all kinds of savings had the same encouragement. A registered savings account into which people could put their money would enable them to have a nest egg, would encourage people not to spend, which is highly desirable at present from a macro-economic point of view, and would also encourage them not to get into debt. I should like to put forward many other proposals but, sadly, my eight minutes are up.
4.51 p.m.
Baroness Turner of Camden: My Lords, I am grateful to my noble friend Lord Carter for introducing the debate this afternoon on this important topic. Most noble Lords who have spoken have agreed that during the past 10 years we have seen a widening gulf between those who are doing well out of the market-led philosophy of the 1980s and those who are doing less well, and in many instances very badly.
According to the Low Pay Unit, about 6 million workers in full-time employment—about 37 per cent. of the total full-time workforce—now earn less than the EC threshold figure as defined by the Council of Europe, which is 68 per cent. of average full-time earnings. Low pay subsidises the United Kingdom economy to the tune of £15 billion a year, which would be the cost of bringing the low paid in the United Kingdom up to the EC threshold. In fact the figures concerning the low paid could well be worse than I have indicated. The official statistics are based on questionnaires returned by employers to the Department of the Environment. It is fairly obvious, since this is a voluntary exercise, that the employers who co-operate are among those paying the best rates. If that is so, the figures could well be worse than the ones I have mentioned.
Moreover, the so-called reform of social security which we have seen in recent years could well have contributed to the worsening position of the low paid. The rules in relation to entitlement to unemployment benefit have repeatedly been tightened so that the unemployed are now not able to pick and choose but must take whatever is available, however low paid and however exploitative. In fact, much of the Government's social policy has been directed towards the coercion of the unemployed into low waged work in the labour market.
The Government inherited a comprehensive system of social insurance based on the contributory principle. No one claims that it was perfect. On this side of the House we agreed that it was in need of revision. But since 1979 we have seen successive social security Bills—almost one a year—and the aim has always apparently been the same. It has been to make it more difficult to claim and to remove benefits hitherto payable as of right and replace them with means-tested benefits. The Government refer to this as targeting. When it comes to the low paid, the Government have developed a series of

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incentives which have resulted in large public subsidies to employers who do not pay a living wage. Family credit is this kind of system. It is a means-tested benefit.
Recently, the Department of Employment has acknowledged the wage substitution effect when suggesting that family credit will take up any fall in wages that results from the disappearance of wages councils. These councils, some of which still remain, although with eroded powers and a feeling of being under threat, provide the nearest we have in the United Kingdom to a provision for a minimum wage. In almost all other countries in the European Community there is some form of minimum wage legislation. In this respect I disagree with the noble Baroness, Lady Seear. I trust that the time is not too distant before we have similar provisions in the United Kingdom.
Those who oppose the minimum wage on grounds of cost should consider the size of public subsidy paid to low-paying employers via the social security system. On the other hand, tightening up on conditions for unemployment pay has led to indirect support for employers who do not pay reasonable wages, because people have been forced into low paid employment. I have no doubt that this was the Government's intention all along.
Of course it will be claimed that unemployment has been reduced and that many new jobs have been created. Everyone welcomes that. But what is not often said is that a number of the new jobs are part time. I am not against part-time employment. It has to be said that, owing to the lack of support facilities—crèches, nursery schools and so on—many women prefer part-time employment. There is a lot to be said for more flexible working patterns. If, however, hours are shortened to reduce wages below minimum earnings levels, the gain to employers in saved national insurance contributions is of the order of £213 a year per employee. Given that the number of jobs of this type has increased by 1 million during the 1980s, the total subsidy to employers would be in excess of £200 million per year.
That has to be seen as part of the incentive to employers by government to maintain wages at a lower level even though it would no doubt be stated that there were some benefits for the low-paid employee as well. However, the effect for many married women is that they cease to be covered by the national insurance system if their wages do not reach the minimum level at which contributions begin. And if they work for fewer than 16 hours a week they have no employment protection either.
In making these remarks it should not be thought that I am opposed to social security support for families with children. Of course I am not. I am simply pointing out that there is a wage subsidy effect and that this is ignored by those who oppose minimum wage legislation.
As for support for the family, it remains the view on these Benches that the Government should have honoured their election pledges about maintaining
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child benefit. I do not believe that they have done so. The noble Baroness, Lady Faithfull, has already dealt with the issue of child benefit. She pointed out that there is a high take-up of the benefit because it is perceived as a right, as something to which everyone is entitled. Any genuine family policy must include its restoration. Freezing child benefit will save the Government £250 million in net terms in 1990–91. I understand that only 28 per cent. of this saving, £70 million, will be ploughed back into family credit for low income families with children.
When we come to the position of the elderly, the outlook seems bleak. It is true that there has been an increase in the number of people retiring on occupational pensions derived from their employment. That development is very much to be welcomed. Nevertheless, as has already been stated in the debate, the majority of elderly people, still look to the state pension as their main income. I understand that the figure is of the order of 60 per cent. Until 1980, pensions were uprated in line with the increase in the RPI or the wages index, whichever was the greater. I join noble Lords who have pleaded for a return to a linking with the wages index. Older people should benefit from increasing prosperity. After all, during their working lives they have played their part in creating it.
There is much concern about the financing of homes for the elderly. The Independent Hospitals Association has stated that adequate care for poorer elderly people is at risk because income support levels are not sufficient to meet residential and nursing home fees. There is a danger of a two-tier system of residential care developing, with a lower level available for those dependent on income support. I welcome the decision taken by a vote in another place last night. I hope very much that the Government will take that on board and amend their policies accordingly.
During the debate several of my noble friends have drawn attention to the problems of the young, the homeless and the underprivileged generally. I believe that the decade has seen a widening of the gulf between rich and poor. I do not want to go over the ground again but the existence of homelessness is an extreme example of the kind of conditions that have arisen since 1979. Before then, it was unusual to see young and elderly people sleeping out; however, it has now become commonplace, not only in London, but also in other cities.
Time does not permit me to enlarge upon the kind of social policies which we on this side of the House would like to see implemented to deal with all these problems. But, in introducing the debate, my noble friend Lord Carter outlined at length what our alternative policies would be, contrary to what the noble Lord, Lord Lucas, said. In those circumstances, all I can say is that we have reached a situation where, in advance of achieving a change of government, we must look at some of the problems which have been mentioned today from all sides of the House with a view to providing at least some amelioration of the conditions which are now apparent to us all.
5 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, this has been an interesting and enlightening debate and I am sure that all noble Lords will join me in thanking the noble Lord, Lord Carter, for giving the house an opportunity to discuss the subject. In his speech he fantasised somewhat about the policies that his party would pursue should it ever be returned to office. I think I should say that that is a very unlikely eventuality. It is all too easy to make promises when in opposition and it is all too easy to gloss over the cost of that profligacy. The difference is that, unlike the noble Lord's party, we have a record of action and achievement. It is a record, as I intend to point out in the few short minutes that I have, of creating wealth and spreading it more widely than ever before.
The Motion before your Lordships calls attention,
"to the gap between rich and poor in society and to the case for a social security system which meets the problems arising therefrom".
But I believe it is essential to understand the context in which we are debating this issue today. If by that the noble Lord feels that it is for the social security system to be essentially redistributive, I cannot go along with him. If he means by that that it is for the better off through taxation and the social security system to help those less well off and in need, then that I would concur and say that that is exactly what we are trying to do and what we very largely succeed in doing.
It would be quite wrong to ignore, when we come to debate these issues, that not only do we live in a society which is richer than ever before; we also live in one where wealth is spread more widely. Moreover, all sections of society are benefiting from the increased prosperity of the nation as a whole. As a society we are twice as rich as we were in 1971. Even in the 10 years since 1979 our wealth has increased one-and-a-half times. Today, thanks to the policies we have pursued over the past 10 years, which received some praise from the noble Baroness, Lady Seear, real personal disposable incomes stand at an all-time high. Thanks to our policies of tax reform, we have created a climate in which businesses can thrive and in which individual initiative and risk-taking are rewarded. The consequence has been a transformation in our fortunes, an almost unprecedented expansion in our economy, a steady increase in employment opportunities and real improvements in living standards for all groups of the population.
These figures have been quoted before in your Lordship's House but they bear repeating. Real take-home pay for a married man with two children on male average earnings has risen by nearly one-third under this Government. Over the past year alone the real take-home pay of a married man on average male earnings, including the effect of the £3 a week reduction in national insurance contributions introduced last October, has risen by over £20 a week. In the numerous families where both partners are working, the overall increase will have been even greater.
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The growth in prosperity to which I and other noble Lords have referred has been reflected in the spread of personal ownership and major changes in the lifestyles of people in all groups. One has only to look at the increased availability and ownership in consumer durables to see this. It is perfectly valid to have regard to trends in ownership of all kinds of goods throughout the range of incomes—indeed, this is a factor which cannot be ignored when considering living standards. It is not merely that colour televisions, central heating, telephones and washing machines now form part of the ordinary experience of millions of citizens in this country; the fact that such items are owned to an increased extent among all groups and not just by the so-called "rich" is itself a fair indicator of the widespread wealth to which I referred. These are not just long-term trends. The recently published Family Expenditure Survey for 1989 contained some interesting analyses, showing, for example, that amoung households headed by a retired person mainly dependent on state benefits there were dramatic increases between 1979 and 1988 in ownership of central heating, telephones and washing machines.
Over the past 10 years there has been a steady decline in the number of pensioners on low incomes. Indeed, if we look at the proportion of pensioners in the bottom fifth of the national income distribution we find that it has declined from 38 per cent. in 1979 to 24 per cent. in 1987. As a group pensioners have done well under this Government. Their average total net incomes over the period between 1979 and 1987 grew by 31·3 per cent. in real terms, which amounts to over 3·5 per cent. a year on average compared with 0·6 per cent. a year between 1974 and 1979.
Pensioners' average income from savings increased by 130 per cent. in real terms between 1979 and 1987, an increase of more than 10 per cent. a year compared with a decrease of 3·4 per cent. a year between 1974 and 1979. Pensioners' incomes increased in real terms twice as fast as those for the population as a whole between 1979 and 1987. Moreover, 52 per cent. of all pensioners and 73 per cent. of recently retired pensioners now have an occupational pension and approximately half of all pensioners own their own homes. I want to place these figures on the record because I believe it is important for the House to be aware of the very real improvements that have been made in recent years for a group which is commonly believed to have fared less well than is borne out by the facts.
Perhaps at this stage I should mention the point made by the noble Lords, Lord Stallard and Lord Carter, and the noble Baronesses, Lady Turner and Lady Seear, on the link with earnings. We believe that the link between the basic pension and earnings is not the key factor in improving pensioners' incomes. As I said, more important to pensioners is the value of their total income from all sources. Between 1974 and 1979 when pensions were increased in line with the higher of movements in prices or earnings, pensioners' average total net incomes increased by only 3 per cent. During our first eight years in office the real terms increase, as I have already said, has been 31 per cent.

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I am only too well aware that a myth is sometimes put around that the undoubted improvements in economic prosperity and personal incomes have only benefited those at the top of the income distribution. Indeed, we have heard it said during this debate that, although the better off may have become wealthier, the poor have become poorer. I do not deny for one moment that those at the higher end of the income distribution have done well. That was the proper and inevitable result of our measures to end some of the outrageous rates of tax referred to by the noble Baroness, Lady Seear, which simply drove some of our most talented and creative people from the country.
Our programme of tax reform has sought to create a climate in which businesses can thrive and individual initiative, risk-taking and hard work are encouraged and rewarded. I believe that it was right to take steps to leave people with more of their own money so that they could choose for themselves what to do with it. All the evidence points to the fact that people not only at the higher end but also those further down have responded to these improvements in incentives by seizing the new opportunities available to them, improving their own living standards and those of their families. It is for this reason that the Government make no apology for the fact that the rich have got richer. But in any society in which you do not have a complete equality there will always be differences in purchasing power. What is quite untrue—indeed, it is a dangerously misleading myth—is to suggest that as a consequence of the greater prosperity of this country the poor have got poorer. The reality is quite the reverse.
I do not deny for one moment that some people have fared less well in recent years than others. We recognise that some people, for reasons of disability or other factors quite beyond their control, have to live on limited incomes and depend on what the state provides. It is precisely for this reason that the Government have sought to protect the position of those most in need. Retirement pensioners, the sick and disabled, families with children, all have had their position safeguarded and protected. Indeed, in many cases we have been able to go further and achieve real improvements in the position of those dependent on benefits. It is precisely because we recognise the importance of providing for people in need that we have devoted an unprecedented level of resources to social security.
I believe that it was the noble Lord, Lord Stallard, as well as other noble Lords, who implied that we had cut resources devoted to social security. In the coming financial year we are planning to spend a record £55 billion on social security. That is an enormous amount by any standards and represents an increase of one-third in real terms since we came to office. It amounts to over £20 per week for every man, woman and child in the country.
We have increased spending on the elderly by some 24 per cent. in real terms and on the long-term sick and disabled by some 90 per cent. in real terms since we came to office. The reforms which we introduced in April 1988 were designed to achieve precisely the objective that underlies the Motion before your Lordships' House today in the name of
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the noble Lord, Lord Carter—namely, to create a properly co-ordinated framework of benefits which is flexible enough to enable resources to be targeted more effectively on those who need them most.
Through the new system of income support, with its structure of personal allowances and premiums, we have been able to direct specific help to groups such as pensioners, families with children, lone parents and disabled people. Spending on family credit in 1988–89 at around £400 million was more than double the amount spent on its predecessor, family income supplement. Family credit now provides a significant tax-free cash income payable to over 300,000 low income working families with children. The average weekly payment is now around £27 and in nearly every case it is paid to the mother.
Going back to pensioners, we are aware of the problem of those with no occupational pensions to whom the noble Baroness, Lady Seear, referred. That is why last October we used the new structure of income-related benefits to provide extra help for those less well off elderly and disabled pensioners. As a result of those changes, which cost some £200 million in a full year, some 2·6 million gained by up to £3·50 a week. The new structure has also enabled us to direct more help to low income families with children. The extra money being provided from this coming April for this group will bring the total amount of extra help provided to approximately 1·5 million families getting income-related benefits to over £350 million a year in real terms since April 1988.
In the short time that I have available I should like to answer various specific points raised by noble Lords. Obviously I cannot guarantee to answer every point that was put to me this afternoon as time is limited. However, I shall do my best. The noble Lord, Lord Carter, asked about the future of the Independent Living Fund. I appreciate the fact that he gave me advance notice of the question. As was made clear in the White Paper The Way Ahead that the noble Lord referred to, the wider arrangements for care in the community to take effect in 1991 envisage care packages devised by local authorities on an individual basis. We would therefore expect that people seeking help after that date should generally be able to look to local authorities. We shall be consulting local authorities on these proposed arrangements and in particular on the timetable for any transfer of existing cases and associated resources. The Government are consulting the fund's trustees, the Disablement Income Group and the Disablement Income Group, Scotland on the experience gained from running the fund and are examining whether there may be a very small group of people for whom supplementary arrangements may be necessary.
The noble Lord, Lord Carter, also mentioned the OPCS review of disability. Again the measures which my right honourable friend announced in The Way Ahead published on 10th January will introduce major improvements in the balance and structure of social security help for disabled people. They will provide an extra £300 million in 1993–94 on top of the £8.3 billion we are already spending on the long-term sick and disabled. These measures will

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help some 850,000 disabled people and carers. This is a generous response to the findings. I find it hard to see how that response can be classified as disappointing. As each of the reports of the OPCS disability survey findings were published, comments were invited and many disabled people and their organisations made comments. The proposals in The Way Ahead, which, as I said, was published on 10th January, took account not only of the survey findings but also of the comments we received. We have not only invited comments on the proposals but have sent a copy of them to a wide range of disability organisations inviting their comments. We shall, as we always do, take account of their comments in working out detailed arrangements for these proposals.
The noble Baroness, Lady Faithful], touched on child benefits, as did various other noble Lords. The Government's decision not to uprate child benefit this year has already been discussed. I do not propose to repeat in detail the arguments which I put forward when we discussed those regulations—that an increase in child benefit at a net cost of some £250 million would have given relatively small amounts to large numbers of families who cannot be said to need it. It is difficult to see how such a move could have been justified in the terms of the Motion before your Lordships today, which seeks to draw attention to the fact that it is the less well-off rather than the rich who need the help which the state can provide. More to the point, it would have done nothing at all to help the 3 million children (almost a quarter of all children) in families receiving income support and family credit because these benefits are adjusted to take account of changes in child benefit. As I reminded your Lordships earlier, the average weekly payment of family credit is around £27. It is difficult to see how a universal child benefit could ever provide this level of help for low income families and still remain affordable.
The noble Baroness, Lady Turner of Camden, implied that we were in breach of our manifesto commitment. Let me say that the future level of child benefit will continue to be determined at the annual review of benefit rates and its level will be decided in the light of circumstances at the time. That is in accordance with the existing law and it fully honours our manifesto pledge that child benefit will continue to be paid as now and directly to the mother. That is what we shall continue to do.
We are often accused—the suggestion has again been made during the course of this debate—of putting too much emphasis on the success of the economy. This success was emphasised by my noble friend Lord Joseph and I wish he could have spoken to us for longer than the time that, sadly, he was limited to. The strength of the economy was also stressed, as I was pleased to note, by the right reverend Prelate the Bishop of Gloucester. However, I submit to your Lordships that the emphasis we have placed on generating wealth has clearly paid off, not only in terms of restoring a sound economic framework but also in terms of protecting and improving the living standards even of those who are less well off.
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This policy has paid off because it has encouraged people to help themselves where they can, rewarding industry, initiative and hard work. But at the same time we have done what any caring society must do. We have protected those who cannot provide for themselves, giving help without sapping the will to stand up by one's own efforts. We have sought to put an end to the attitude which says "You won't do any better whatever you do".
The conclusion that I draw is that the most important contribution that the state can make in promoting welfare is not to be found in ambitious projects of social engineering. It is to be found in an economic framework in which people can generate wealth and resources which enable not only their own families to prosper but also enable those who are less well off to share in this prosperity. I hope that your Lordships' House will endorse that conclusion tonight.
5.20 p.m.
Lord Carter: My Lords, I am very grateful to all those who have spoken in the debate. The debate has been in the best traditions of your Lordships' House. It has dealt with a central problem of social policy; sincerely held differences of view have been expressed cogently; and there has been constructive criticism.
As there are a few moments left before we reach the end of the allotted time, I should like to take up a few points. I emphasise to the Minister and noble Lords on the other side of the House that when we spoke of poverty we were speaking of relative poverty rather than actual poverty. What is crucial is how the poor feel in relation to the rest of society.
The Minister referred, correctly, to substantial increases in expenditure on social security. However, he omitted to say that the vast proportion of that increase is due to an increase in the number of claimants and the number of unemployed; the real value of benefits has declined in many cases.
The noble Lord, Lord Joseph, said that he could not believe many of the figures that I quoted. I suggest that he discusses his problem with the Government's own statistical service because I was very careful to quote entirely from official statistics. Those statistics show that it is not true that wealth has been more fairly shared in the past 10 years.
I have to take issue with the noble Lord, Lord Lucas of Chilworth, and with the Minister. The noble Lord, Lord Lucas, said that I had not said what we would do on this side of the House. The Minister said that I was fantasising. Those remarks baffle me. I listed some 20 or more specific changes of policy that will be introduced by the next Labour Government. I did not mention all of the proposed changes, but they are all contained in our policy document.
Lord Henley: My Lords, I only used the word "fantasy" because I thought it was so unlikely that the noble Lord and his friends would ever have the chance to put those policies into operation.
Lord Carter: My Lords, we shall have to wait and see. The policies are clearly stated in the Labour Party policy and review document which is available to all.
I repeat my thanks to all those who have spoken and beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Legal Aid
5.22 p.m.
Lord Mishcon Lord Mishcon rose to call attention to the 39th annual reports of the Law Society and the Lord Chancellor's Advisory Committee on Legal Aid; and to move for Papers.
The noble Lord said: My Lords, I should like to express my appreciation in advance to all those who have put their names down to speak. So many of them carry the weight of deep authority on the matter of legal aid on which I wish to address the House.
The reports to which I refer in the Motion include a preface written by the chairman of the Legal Aid Advisory Committee. In that preface she says that the year under review is one of the most active years that the committee can remember. That is quite right, I imagine, because during that year—1989—legal aid was handed over to the Legal Aid Board in the April, there was the White Paper on legal services, there was the Courts and Legal Services Bill which is still before this House, and there was the Children Act.
That is very fine and very true. However, the sad fact is that it has not by any manner of means been the most positive year for remedying the critical inadequacies of legal aid funding and availability. As many of your Lordships have said from time to time in debates upon matters which affect the citizen and law, it is extremely easy to pass such enactments but one has to remember the principle, upon which I believe everyone in the House is united, that if there is to be justice that justice must be available to all, regardless of means.
Against that background I look first at the question of eligibility for legal aid. When the Legal Aid Bill, which became the Legal Aid Act 1988, was debated in this House I remember the beloved voice of the late Lord Elwyn-Jones pleading with the Government to consider at that time what was being done regarding eligibility for legal aid. It is not a matter which is any way cured by the annual review which takes place when the basic amount is uprated by some 5·2 per cent. That merely keeps the lower limit in line with inflation and with the increase in social security benefits.
Perhaps I may say in parenthesis that it would be an extremely good idea, which I hope the noble and learned Lord will consider and agree to in tonight's debate, if, because of its vital import, this was a matter which was properly debated once a year instead of being dealt with by way of a negative resolution.
I turn now to the size of the problem of eligibility. One remembers that the noble and learned Lord, who is always forthcoming on matters on which he feels that the public and the House should be informed, had been somewhat timid over a considerable period when pressed to say what the drop in eligibility had been under this Government. On 13th November of last year he announced that there was to be a review regarding eligibility. I believe that I am right in saying that when that statement was made at a press conference he was pressed to say what had happened regarding eligbility so far. The answer that he gave on that occasion was that, as against the oft-quoted 1987 White Paper figure of 70 per cent. of the population being covered by legal aid, in November 1989 that figure was down to around 56 per cent. That meant a drop of 14 per cent. in just over two years. Translated into human statistics, that meant that 9 million people who were covered by the legal aid scheme in 1987 were no longer covered by the scheme in November 1989.
In addition, at about the same time the senior lecturer in the Department of Statistical and Mathematical Sciences at London University published an analysis of government statistics. His report showed that during the period 1979 to 1989 14 million people, or 5.5 million households, were no longer eligible for the scheme. Those are pretty dreadful figures.
One might have thought that I should not be making this speech at this time in view of my statement that the noble and learned Lord the Lord Chancellor had said last November that an eligibility exercise—a review of the financial criteria for eligibility—was taking place. It started in January of this year against the rather morbid background of an announcement by the noble and learned Lord that the result of the review might not be with us for three years. In the midst of that period we have had to discuss the Courts and Legal Services Bill. I hope that the noble and learned Lord will disabuse everyone of the wicked thought that that review is possibly being postponed in order to enable the Bill to become an enactment without having to deal with the subject about which I am talking; namely, the huge reduction in eligibility for the legal aid scheme.
Quite apart from the lecturer at London University, the Law Society, which I hope noble Lords will agree is reliable, has made its own calculations on the issue of eligibility. It has done so on a different basis but perhaps one which is more appealing to noble Lords as showing the extent of the problem. It has prepared calculations based on accurate data. It concluded that a male head of a household with earnings of two-thirds of the national average must now pay a considerable portion of his gross earnings in contributions to qualify for legal aid, compared with no contribution at all on his part in 1979, while those with one-and-a-half times national average earnings have gone out of the scheme altogether. It is not only those figures which have hit people in this country; everyone knows that the costs of litigation itself have gone up during that period.
I reiterate that this is a serious problem and it is no wonder that the advisory committee commented on it. I should like to refer to its comments. I am sure that the noble and learned Lord will agree with me when I say that there is no point in setting up an advisory committee and asking people to give up their valuable time in order to serve on it, prepare a report and make a recommendation if the recommendation has no effect. Paragraph 8 on page 88 of the advisory committee's report states:
"The issue of eligibility for legal aid has long been a concern of the Committee. We welcome your Lordship's announcement of 13th November, 1989 of changes to some eligibility limits and a review of the financial conditions for legal aid. We are pleased that this review will address the problem of financial eligibility in general because, as we stated in our 38th Report, eligibility levels should not be allowed to drift downwards. Nevertheless, the planned period of up to three years for the review is lengthy; this is a source of some anxiety to us in that such a downward drift might gather momentum over this time. We hope that every endeavour will therefore be made to expedite the review."
It would be ungracious of me if I did not refer to the fact that, at the same time as the noble and learned Lord announced that the review would take place, he announced that there would be some changes; namely, an increase in civil legal aid eligibility for children, pensioners and people involved in personal injury cases, the total cost of which would be about £5 million. That is welcome. I do not want to be churlish and say that it was long overdue, but there were pressures for that change over a considerable period of time. However, the committee goes only a small way to reversing what I can only call those savage cuts in legal aid which have been made by the Government in the past few years. It makes no changes in the entitlement to legal advice and assistance which is restricted to the very poor and even excludes some social security benefit claimants.
What do I from these Benches ask of the noble and learned Lord with, I hope, the agreement of noble Lords in all parts of the House? First, I ask for a broad approach to restore the cuts in allowances and an increase in capital limits to take account of inflation over the past 10 years. That is the very least that we must ask for. Secondly, I ask for an expedition of that review so that it may make its recommendations before the end of the year. I should have thought that that was a perfectly reasonable period. Finally, I ask that consultation takes place with interested organisations such as the Law Society and the Bar Council or, as the noble Lord, Lord Meston, might prefer me to say, the Bar Council and the Law Society. I do not think that the time in which I hoped the review would be completed becomes unreasonable merely because I have asked for consultations.
I am conscious of the time and must deal quickly with a few other subjects. I wish to mention first the critical situation with regard to criminal legal aid. I ask the noble and learned Lord to appreciate the crisis. At the time of the uprating in April 1989—this is what I am told by the Law Society and I therefore hope that noble Lords will believe that it is reliable information—the noble and learned Lord the Lord Chancellor had available to him jointly agreed evidence in the form of a profitability survey. That
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showed—I say this slowly because I want it to have a proper effect on noble Lords—that only 40 per cent. of solicitors' firms undertaking criminal legal aid work in London and 33 per cent. of such firms in the provinces were able to avoid making a loss on the work at the rates that were then paid. The Law Society contended that that was clear evidence arguing for a major rise in rates. However, the noble and learned Lord the Lord Chancellor decided to increase the rates by only some 6 per cent., which was an effective cut in the real value of the rates, thus pushing more firms into loss.
There have been discussions leading to the uprating to be made on 1st April this year. Those discussions have only just concluded. During those discussions there were two major pieces of hard evidence available on which the Lord Chancellor could base his decision. First, there was a jointly prepared and agreed index of solicitors' overheads. That showed that for the last two years for which figures were available (April 1987 to April 1989) the overheads faced by solicitors who undertook criminal legal work rose by some 27 per cent. There was also evidence from statistics provided by the Legal Aid Board to show that the number of firms doing criminal legal aid work was now reducing. That is a reversal of a previous trend.
Based on that evidence the Law Society advocated an increase in the rates of 21 per cent. because if firms literally are going out of business in doing criminal legal work, goodness only knows where our whole system of criminal justice will end up. I invite the noble and learned Lord to comment on these matters, especially when I inform the House that in the face of that request the noble and learned Lord the Lord Chancellor has apparently decided to increase the rates by only 7.5 per cent.
I could address the House on other matters raised in the reports which are of vital interest. There is the question of legal aid for tribunals; there are the advisory regional committees, which are not being funded centrally at all and should be; there are multi-party actions; and there are other such matters which are of great interest. However, other noble Lords are to participate in this debate. There are questions of conciliation raised in the report. I see the noble Baroness, Lady Faithfull, nods her head. That is a matter of great importance to your Lordships and nobody could address the House with more authority on such a subject than the noble Baroness.
I simply draw the attention of all noble Lords to the fact that there is a crisis with regard to legal aid. The name of legal aid must continue as a matter of pride in our system of justice. It does not deserve that pride at the moment and that pride has to be restored. I beg to move for Papers.
5.42 p.m.
Baroness Faithfull: My Lords, this debate which is based on two reports poses a very real dilemma for your Lordships and in particular the noble and learned Lord the Lord Chancellor. Figures published by the Attorney General showed that in 1979 the cost of legal aid in this country was £100 million. By 1989 the cost has risen to more than £550 million.

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I am sure that the noble Lord, Lord Mishcon, to whom we are indebted for this debate, will wish me to say how money that is not now being spent should be spent and then to suggest ways in which money could be saved so that the legal aid system has a balanced budget, if I may so put it.
I support the noble Lord, Lord Mishcon, with regard to solicitors' pay. My family happens to be in the solicitor world. It is not a matter only of payments and salaries; there are rents, the cost of secretaries' salaries and the rising costs of running an office. Those costs affect everybody at the moment and not only solicitors; but in the case of solicitors it means that although some of them do not wish to stop doing legal aid work many of them have to do so because otherwise inevitably their offices would have to close. I speak with feeling because I know by how much the rents will increase.
With regard to how money should be spent and where it is not being spent at the moment, the noble Lord, Lord Mishcon, mentioned tribunals, and they are discussed on page 112 of the report. The effectiveness of legal representations in some tribunals is essential, although it is not essential in all cases. However, it would save the country a great deal of money if some tribunal cases were so dealt with. That is mentioned in the Genn report which does not recommend a blanket extension of legal aid throughout.
As has been said many times during the course of our debates on the Courts and Legal Services Bill, money could be saved in the county courts if they were more efficiently run. It could also be saved in the magistrates' courts. In an address to the Magistrates' Association in 1982 the then Lord Chancellor, the noble and learned Lord, Lord Hailsham of Saint Marylebone, estimated that waiting time on the day of hearing was costing the legal aid fund approximately £9·5 million. I suggest that money could be saved if the magistrates' courts were more efficiently run.
I know that the noble and learned Lord has sympathetic feelings toward family courts. If family courts were to be set up in this country I believe that they would save money on legal aid.
The noble Lord, Lord Mishcon, mentioned conciliation services. Newcastle University brought out a report which I think took two or three years to produce. It is in many ways a very good report and contains a great deal of valuable information. Unfortunately it was inconclusive as to whether conciliation would or would not save money on legal aid. I believe that it would. However, it is difficult to be certain when one cannot point to definite figures.
Although I have put the point to him before, I again say to the noble and learned Lord that if the Treasury were to advance a certain sum so that the conciliation service could be financed out of a Treasury grant (say for two years), one could then find out whether or not it saved the country money in terms of legal aid. That is the only way in which one can prove it, although I believe that it could do so. That mechanism has been used before in other areas, notably in the field of juvenile delinquency in setting up intermediate treatment.
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I also ask the noble and learned Lord how the Children Act 1989 is to be administered with regard to legal aid. Whatever happens I suggest that in all cases legal aid must be readily available. It is for the wellbeing of the children in the cases concerned and partly for the saving of money in respect of legal aid. I feel slightly embarrassed in that I have sitting next to me the chairman of the advisory committee. Nevertheless I ask the noble and learned Lord to tell us the future of the advisory committee. On reading the report it seems to me that the advisory committee has done much to bring before your Lordships' House and the country both the good points and the difficulties. It seems to me that it would be a great pity—considering that all the people who serve on that committee are volunteers and people of very high quality—if that committee were to be cut back. I for one would be very sorry to see that happen.
With the utmost diffidence I wish to make a suggestion which bypasses the noble and learned Lord the Lord Chancellor. I do so with diffidence and I hope that I shall not be thought presumptuous. I have been a civil servant in two government departments and a chief officer in local government. I suggest that the noble and learned Lord's department is not adequately staffed. I believe that not enough money is going into it. We depend greatly on his department. It would be difficult for me to ask the noble and learned Lord whether he could take on more staff and have more money. Therefore from these Benches I bypass him and make a plea to the Treasury that the Treasury should consider the noble and learned Lord's department. It may be necessary to have a management survey. I believe that more money is needed for the department. If more were available more work could be done. I feel sure that he will welcome the suggestion and I hope that he will not consider me presumptuous in making it.
5.50 p.m.
Viscount Hanworth: My Lords, I spoke almost exclusively on this subject on the Second Reading of the Courts and Legal Services Bill. However, I feel very strongly that the effective denial of recourse to the High Court for a large number of citizens must be stressed again in this debate. That has already been done.
The cost of a High Court action is usually so great that without legal aid only the really rich can afford it. Surely that raises a major matter of principle. We cannot rightly talk about the rule of law while that situation continues.
Fairly recently the BBC was sued for a serious matter of defamation. It managed to spin out the proceedings until the plaintiff could no longer afford the costs of continuing the action. Fortunately someone agreed to underwrite the costs; and the BBC immediately settled out of court. That is a very sorry tale, but there are other even more unscrupulous cases where, for example, a man or a firm is ruined by a trumped up case which they cannot afford to defend.
When legal aid was set up 40 years ago—and I am speaking of civil legal aid—it was available to more than 80 per cent. of the population. Today the figure

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is about 50 per cent., with a cut-off point for those earning 6 per cent. above the average male earnings.
The Government's green form scheme is welcomed, but the effect will be small since only £5 million more is being made available. Giving the county courts greater jurisdiction will help but the gap, about which I have spoken, remains a glaring example of the failure of the fairness of our legal aid system.
The Government may not substantially raise the existing eligibility level for legal aid but that is not really the point that I am trying to make. I believe that legal aid should be available to everybody on a graded basis. There are of course other possibilities but the unfairness that I pointed out can be eliminated only if everyone is to some degree able to obtain legal aid.
We now have legal aid boards, which screen applications to ascertain litigants' means and the merits of the case. Surely therefore such a graded scheme as I am suggesting would not mean setting up a new organisation to manage it. Although I have mentioned only the graded scheme, there are variations and other possibilities. However, I certainly do not support merely raising the existing cut-off level by a small degree.
5.55 p.m.
Lord Simon of Glaisdale: My Lords, the noble Lord, Lord Mishcon, habitually puts us in his debt by his cogency and skill, and perhaps most of all by his courtesy in debate which means much to us on the Back-Benches and the Cross-Benches. He has again put your Lordships in his debt by introducing this subject at this time. He has absolutely no need to apologise for the timing. Not only is the subject most important, but it throws a great deal of light on the Bill that we have been debating for so long and so late into the night and the early morning—the Courts and Legal Services Bill.
One of the interesting matters about this quite admirable report by the advisory committee—and it is a privilege to say that in the presence of the chairman of the committee—is that the report bears out in so many respects the misgivings that have been expressed about the effects of the Courts and Legal Services Bill.
Perhaps I may take up a point that was made by the noble Baroness, Lady Faithfull. I have long been convinced that conciliation would save a great deal of money, and already saves a substantial amount of money in an area which forms one of the biggest demands on the legal aid fund; namely, matrimonial jurisdiction. I concur with the noble Baroness. I should like to see a system of family courts which would integrate any conciliation system. I believe that it would cost money. All the schemes and returns that I have seen indicate that it would not be an inexpensive exercise, at any rate immediately. But I am sure that in the end it would save money. I am convinced that it would save marriages.
The most important factor in that sphere is to relieve the strain that is inherent in the conduct of matrimonial proceedings and in their consequences.
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I should like to see nobody seeking to obtain a matrimonial decree who had not sought help from a system of concilation on matters of controversy. I do not think that complete reconciliation has very real prospect at that stage. But we can ensure that those items that are susceptible to conciliation and agreement are taken out of the struggle so that nobody seeks adjudication who has not already shed the other matters of great controversy. Those generally carry greater pain for the parties than the main issue of whether a marriage should be terminated.
I have always been attracted by the structure of the French conseils d'état where one has an administrative court through which people must pass before going to the court of adjudication. That is what I should like to see in a family court: conciliation, welfare assistance and counselling, and so on, with only those matters taken to adjudication which cannot be made the subject of agreement.
The other point I wish to make as a background is this. It seems to me unreal at this moment to expect more money. The noble Baroness said—as people say so often—that the Treasury must cough up. I do not think she used so vulgar a term but that is, in effect, what she meant. However, the Treasury has no money of its own any more than my noble and learned friend's department has money of its own; all it can do is oversee the collection of taxpayers' money and ensure that it is paid out in accordance with the desire of Parliament.
However, this is a very bad time to expect more money, and one of the disturbing aspects of this admirable report is that it indicates that in many respects more money will be required merely to mitigate the effect on legal aid of the Courts and Legal Services Bill. It deals with three matters of which I shall only mention the first two. The first is the effect on the high street solicitors and the second is the effect on the junior Bar. The third relates to contingency fees which no doubt we shall be able to discuss tomorrow.
With regard to high street solicitors, the report echoes exactly the anxieties voiced in this Chamber when we were discussing the multi-disciplinary partnerships. My noble and learned friend Lord Templeman made a powerful speech when he examined the subject thoroughly and spoke with great authority. After that it was hardly controvertible that the loss of conveyancing fees would be a serious blow to the high street solicitors and would force many of them out of business.
My noble and learned friend replied that he did not share that apprehension, that he thought that the high street solicitors would be able to advertise and thereby survive. That reflects something that was put more delicately in the report when it refers to energetic marketing. However, Milton Friedman's observation that there is no such thing as a free lunch has passed as a truism into the language. Certainly there is no such thing as a free advertisement. An advertisement adds to the overheads which are passed on to the client or the customer. In that respect, therefore, there will be an increase in the cost of litigation which has already been cogently adverted to in the speech preceding mine.

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The second point concerns the junior Bar. The report again echoes the anxieties expressed by your Lordships. In fact, the advisory committee is less sombre and pessimistic than I am. The committee believes that the Bar will survive as an institution, though it expects an attenuation. I should be very surprised if there are any more than surviving pockets of what is the present Bar.
The reason for that is that so far as I am aware no one has answered the question asked by the late Lord Gardiner. Lord Gardiner drew attention to the risks that throughout face a barrister. He also drew attention to the, no longer penury no doubt, but the difficulties at the start of a career, particularly compared to the start in other professions. He asked, "Why should anyone become a barrister when he could avoid those risks and sidestep those difficulties by becoming a solicitor?" Therefore, it seems to me that the advisory committee is absolutely right in facing the clear possibility that large firms of solicitors will recruit young barristers into in-house advocacy departments. That again, as the advisory committee points out, will restrict the sources on which legal aid can draw. Moreover, it points in relation to both of those matters that it will cost money even to mitigate those difficulties; money which, as I suggested, is certainly not available at the moment and in the future is likely to have to compete with various other social causes.
We, as lawyers—the noble Baroness, Lady Faithful!, knows more about the law than any of us—obviously put justice very high, if not the highest, in the list of social causes, but there are others. One can hardly attend the House at Question Time without hearing a cry for funding, generally massive funding. It is those matters, too, that will inhibit the availability of funds even to mitigate the dangers inherent in the Bill. As the noble Lord, Lord Mishcon, said, there are many aspects to be dealt with, but I prefer to leave those matters to others and to concentrate only on the two points I have raised—the effect of the Bill on the high street solicitors and the effect on the junior Bar with its repercussions on the availability of legal aid.
6.7 p.m.
Lord Irvine of Lairg: My Lords, I confine my speech to three subjects: the eligibility limits, the extension of legal aid to tribunals (industrial, immigration and social security) and the impact that the Courts and Legal Services Bill may have on access to legal aid for those who need it; essentially the point made by the noble and learned Lord, Lord Simon of Glaisdale.
The issue of the eligibility limits is now to be seen against a background of declining usage of legal aid. When addressing the Law Society conference at Cardiff in October 1988 the noble and learned Lord the Lord Chancellor felt able to claim that over the previous five years the number of legal aid certificates issued had increased by nearly one-third. In fact, when the figures in the 38th and 39th annual reports are taken into account the increase is only 6.75 per cent. The figures appear on page 25 of the 39th report. The reason is a fall—virtually for the
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first time—in the number of certificates issued during 1988–1989.
In paragraph 121 of its 38th report—the report for the year prior to the year covered by the 39th report now under debate—the advisory committee drew attention to the research of Mr. Cyril Glasser and,
"to the probability that under 60 per cent. of households and only just over half of the population are now eligible for legal aid".
The committee continued:
"We find the position extremely worrying. We arc concerned that eligibility levels should not be allowed to drift downwards".
The committee concluded that:
"in view of the real hardship that is now faced by those of moderate means who do not qualify for legal aid we would like to see an independent review of eligibility levels and how they are determined".
I emphasise "independent review".
Therefore, in December 1988 the advisory committee was calling for an independent review. The Government took a whole year to react. In the meantime there was further research published again by Mr. Glasser and also the research referred to by my noble friend Lord Mishcon, that conducted by Mr. Michael Murphy, the senior statistician at the LSE, showing that the position was almost certainly even worse than had been assumed. I repeat Mr. Murphy's conclusion given by my noble friend Lord Mishcon that 14 million people in 5·5 million households no longer qualify for civil legal aid and legal advice and assistance compared with 1979 when the Government came into power. That is so startling a statistic from such an authority that it merits repetition.
What are the Government doing? With respect, I would say that what they are doing comes too late, will take too long and is too little. I say that it is too late because the Government have had compelling evidence before them since as long ago as 1987 of the decline in eligibility. However, it was not until November 1989 that the noble and learned Lord on the Woolsack announced a review of the financial conditions for the granting of legal aid. The review would begin its work in January of this year and would require as long as two or three years to complete its work. That is a lethargic timescale which calls for explanation. Therefore, I add my voice to what has already come from my noble friend Lord Mishcon.
That sluggish timescale gives the impression of a decision to kick the issue into touch for the balance of this Parliament. May the House be told what there is about the nature and difficulty of this review which prevents completion in six months from commencement? Typically, my noble friend Lord Mishcon was more generous than I and suggested the year end. Two to three years to most people brings an entirely new dimension to the concept of the law's delays.
I say that it is too little because the Government have not responded to the calls for an independent review. The review is to be conducted by officials from the noble and learned Lord's department and the Legal Aid Board. It should not be inhouse but

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should be independent. However, because it is inhouse, the delay is all the more inexplicable. I invite the noble and learned Lord, when replying to the debate, to say whether it is possible for him to meet the plea from his own advisory committee that the report be expedited.
The advisory committee calls attention to recent research commissioned by the noble and learned Lord's own department showing that representation before tribunals enhances the quality of justice. I refer in particular to the industrial, immigration and social security tribunals. As so often with research, it confirms what experienced practitioners know from their daily experience. There is no greater injustice which I personally have witnessed than the inequality between the unrepresented applicant worker and the represented employer in the industrial tribunals. Those tribunals daily make awards of many thousands of pounds for unfair dismissal, redundancy and discrimination on the grounds of race or sex. Their proceedings regularly involve much greater sums of money than in the county court where legal aid is available.
Contrary to what is often said to resist the extension of legal aid to these tribunals, the law that they apply is as complex, the formality of their proceedings is as great, the need for skilled professional cross-examination and legal argument is as extensive as the ordinary courts of law. There is no doubt that in many cases representation affects the results. If it affects the results, it affects the quality of justice. I should be interested to hear the noble and learned Lord say in his reply whether he has any plans for ensuring that legal aid is made available for those classes of tribunal case—and I agree with the noble Baroness, Lady Faithfull, that it should not be for every case—where equal justice will be secured only by representation.
That part of the advisory committee report has particular point because it was only about a fortnight ago that the Government announced that claims for damages for breach of employment contracts are to be transferred to industrial tribunals. At present, those claims can be brought only in the High Court and county court where legal aid is available. I have no objection in principle to the transfer of this class of case to the industrial tribunal. Indeed, it is natural that they should be there since unfair dismissal cases are already there and the issues in both class of proceedings overlap.
However, the transfer is thoroughly objectionable in view of the absence of legal aid in industrial tribunals. Is it the Government's intention by that transfer to deprive dismissed employees of legal aid for wrongful dismissal in breach of contract? I should have thought that that is an area where there is very little to fear on the costs front provided legal aid applications are properly and carefully examined to see if the claims have merit and the legal aid charge on money recovered is retained. I hope that the noble and learned Lord will find time when replying to this debate to reveal to us his current thinking on the extension or not of legal aid to those tribunals.
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Finally, I turn to Part III of the report which I venture to suggest is important. I am conscious that I am covering ground traversed by the noble and learned Lord, Lord Simon of Glaisdale. However, I do that in the very particular context of what the committee actually said and the relevance of what it said to legal aid.
The committee welcomed much of the Courts and Legal Services Bill but it struck a cautionary note. It acknowledges:
"The Legal Aid Act 1988 creates important opportunities for the future development of legal aid and legal services".
Paragraph 77 then states:
"It is vital that any re-organisation of the legal profession should complement, not detract from, those opportunities".
In particular, the committee drew attention to the risk that if the financial institutions succeed in taking over a substantial share of the conveyancing market then, as the noble and learned Lord, Lord Simon of Glaisdale, said, the viability of many solicitors' firms may well be impaired with the attendant risk that some might disappear and others might shed their legal aid work, formerly subsidised by conveyancing income, in favour of more remunerative areas of practice.
The most obvious remedy which the committee identified was to improve remuneration for legally-aided work to make it attractive and reasonably profitable. The other danger which the committee identified was a reduction in the size of the Bar due to the extension of advocacy rights to solicitors. It did not prophesy doom but it prophesied that there would be a smaller pool of independent barristers from which solicitors can choose for legal aid work. Paragraph 68 states:
"If, as we expect, the major impact of the Government's proposals is initially on the younger members of the junior Bar, the legally aided client is likely to be most affected by any diminution in the quality of service, because it has traditionally been younger banisters who have done much of the legal aid work, particularly in criminal and matrimonial matters".
That statement from an experienced committee such as this must be taken seriously.
I wonder whether the noble and learned Lord when he replies will feel able to assuage these anxieties on the basis that he has a clear structural view—and can tell us what it is—of how the size and structure of the professions of the providers of legal services are likely to be affected by the implementation of his current Bill.
I should also welcome the noble and learned Lord commenting, if he feels able, on whether he accepts the principle urged by the advisory committee at paragraph 69 of,
"ensuring that legal aid rates of remuneration do not compare unfavourably with privately paid work".
That surely is the only guarantee that those whose only access to justice is through legal aid will in practice have access to legal services of sufficient quality to be consistent with their securing justice.
6.22 p.m.
Lord Renton: My Lords, I am glad that the noble Lord, Lord Irvine of Lairg, dealt with the effect of the legal services part of the recent Bill upon legal aid because it enables me to shorten my speech to

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some extent. I should like to endorse what he has said in that part of his speech.
We are indebted to the noble Lord, Lord Mishcon, for the fair-minded and temperate way in which he laid the foundations of this debate. There is very great anxiety with regard to legal aid as it is at present. He particularly took up the points about the review of eligibility taking perhaps as long as three years. That is not an acceptable length of time because in three years many changes can take place and they are not likely in present circumstances to be changes for the better. We are likely to see a deterioration. It is therefore most important that my noble and learned friend the Lord Chancellor responds to the request made on both sides of the House that the review should be shortened.
I sympathise with my noble and learned friend the Lord Chancellor because we know that in the matter of legal aid he, like his predecessors, has to depend to some extent upon the financial position of the country. We shall know a little more after next week's Budget what luck he is likely to have, but I do not think that we should raise his hopes very high. It is largely a question of doing the best with what we have. The very thoughtful report of the advisory committee, presided over by my noble friend Lady Park, contains various ways in which we can hope for a better expenditure of the limited funds available.
Perhaps I may deal with the remuneration of the two branches of the legal profession. My noble friend Lady Faithfull, with regard to solicitors dealing with criminal legal aid work, said that they were really suffering and that some might go under. I must point out, on first-hand evidence from two members of my family who do some legal aid work mainly in that part of their practice which is in the Family Division, that the fees are very tough indeed.
It is many years since I was a junior barrister, but in the days when one appeared, whether in matrimonial cases or in civil actions in the High Court or on Assize, there was a rule which was faithfully followed: that for legal aid work we received five-sixths of what was regarded as the scale fee or a reasonable fee in the circumstances. That rule has long since gone. I do not know whether there is any hope of it coming back in the foreseeable future, but when the fee was five-sixths we were only too happy to accept legal aid work. With the high rates of taxation, there was not much difference between legal aid and the run-of-the-mill civil work. I mention that to point out that it is not only solicitors who are feeling the pinch where legal aid work is concerned; junior barristers are also doing so.
I return to the report. I do not wish to repeat what has already been said. I endorse what was said about the effect of the legal services Bill with regard to the quality and so on of those who will carry on with legal aid in the new circumstances. However, for the sake of the record we should have the report and the opinion of the advisory committee on the conditional fee arrangements quoted very specifically. I make no apology therefore for reading out what the committee actually said so that it gets into the record of this important debate.
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With regard to conditional fees, paragraph 74 at page 101 states that the committee is pleased to note that the Government rejected any type of fee involving a proportion of whatever damages are obtained. However, the committee also says:
"We remain somewhat apprehensive, however, regarding the proposal to allow conditional fees with a percentage addition to the normal costs. Although the possibility of serious conflicts of interest arising in such cases is probably remote, it should be ensured that any uplift of this type is unlikely to impair impartiality in the conduct of a case".
It is very important that we should take note of that.
Paragaph 76 is not very long and I shall read the whole of it:
"We are also concerned to ensure that the availability of conditional fees is not perceived as a reason for not maintaining legal aid eligibility levels, and for not extending legal aid to those areas where it is presently unavailable but much needed. For the reasons outlined above, we do not regard the arrangements for conditional fees as a realistic alternative to legal aid".
That paragraph expresses views that have been aired in all parts of your Lordships' House. However, I think in both branches of the profession there is still, in spite of the denial issued by my noble and learned friend the Lord Chancellor in reply to comments I made at Committee stage, this feeling—that conditional fees, when they are introduced in order to save legal aid, will not be used for extending legal aid to the desired extent. We must be very careful about that.
I do not envy my noble and learned friend the Lord Chancellor in the problems which confront him on legal aid. They are not of his creation and they are not of the creation, let me hasten to add, of his predecessors either. I hope I am not using the expression frivolously—my noble and learned friend Lord Hailsham may think I am—but the truth is that the terms of trade have altered. We must take note of that and do all that we can to mitigate the results of it.
6.30 p.m.
Lord Ackner: My Lords, it was quite some time ago that I appeared before the Court of Appeal presided over by the Master of the Rolls, Lord Denning. I had more than the usual thin veneer of self-confidence, because I had a case not only dead in point but one decided by his Lordship the Master of the Rolls. Having trotted it out with that air of confidence, he said, "Oh, but that was 17 years ago".
I do not know whether the same applies in this debate, because it was only six-and-a-half years ago that the Government produced a White Paper which was the Government's response to the report of the Royal Commission on Legal Services, and it dealt with a wide variety of recommendations by the Benson Commission, as it has been known, a large proportion of which have been repudiated within the last year by the Government's Green Paper.
I do not go back on them. I go straight to the recommendation with regard to legal aid and that is to be found on page 10, right at the bottom. It reads:
"The Government believes that legal aid should be available to assist those of small or moderate"—
and I emphasise that—
"means by giving them the same chance to pursue or defend their legal rights as those in a position to instruct lawyers privately,

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provided that it has been shown that there are reasonable grounds for pursuing or defending the rights in question".
Those sentiments are certainly not being carried out in practice now. Those of moderate means cannot afford without legal aid to litigate and they are not any longer eligible. It is not appreciated as fully as it should be that legal services are by their very nature expensive. So are accountancy services; so are any services that are labour intensive.
I had the pleasure of addressing the undergraduates at Exeter University last month, giving the annual Bracton Law Lecture, and I made the point to them, which will be well known to your Lordships, of how much costs have changed in those matters which are work intensive. I gave them, first, the example of the plumber who before the war one could pay, quite happily, five shillings, or 25p, to repair a leak in a pipe or put a washer on a tap. It now costs 100 times that, £25 in London at least, to get a plumber to cross the threshold. I also instanced the hairdresser. In my undergraduate days I went to Austin Reed's. It cost one shilling, or 5p, with threepence in those days for the tip, making 64p. The cost is now more than 100 times that figure.
Going to the other end of the scale, the most expensive firm for handmade shoes in London, in Bond Street, before the war charged 7 guineas, which is £7.35p. I phoned its counterpart that still exists and a handmade pair of brogues now, without VAT, costs over £800. Therefore the indication that a professional man now charges £200 an hour is only an indication that his figure before the war of £2 per hour has gone up in that sort of proportion.
It has not gone up to that extent at the Bar, so I understand, because, if one takes the figure appropriate for a half-hour conference before the war, it was one guinea. It is now not for the junior barrister, unless he has had to read a whole series of papers, 100 guineas. I am told that it is in the region of £50 to £70. But in legal aid. I am told, the figure which is laid down for a barrister's conference of one hour—that is, twice the one guinea, because the one guinea was for half an hour—is £28. So the cost has gone up not 100 times, like so many labour-intensive activities, but 14 times. That is all. That is an indication—and I am sure that the same sort of approach applies equally to solicitors—of the sacrifice that is being made by the profession to enable legal aid to be provided, but still eligibility is kept right down.
May I go now to the Government's philosophy as we have learned to understand it, if understand we can? It is encapsulated in that often quoted incantation: free competition will ensure through market discipline the most efficient and effective network of legal services at the most economic price.
I do not know whether my noble and learned friend the Lord Chancellor recalls a 21st anniversary dinner at Birmingham which he attended a little less than a year ago. I have a picture. I do not know whether it was taken before or after the dinner, but he was looking remarkably healthy. At that dinner Sir Gordon Borrie made the after-dinner speech and he said this, which relates so much to the philosophy which I have just quoted:
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"The free play of market forces is of no use to the significant and rising proportion of the population who cannot afford to enter the market and are not eligible for legal aid".
He went on to say:
"It is essential for the Government to give an unequivocal commitment that public support will be available to pay for essential legal services that cannot otherwise be afforded. Gradual rises in individual prosperity are not enough to make up for serious deficiences in the funding of legal advice".
The unequivocal commitment which Sir Gordon Borrie, the Director General of Fair Trading, thought the Government should give has not been given at all. All that has been provided is a promise that, in something like three years' time, a survey will have been completed. One is bound to compare the speed which has been thought appropriate to apply to the process of the Courts and Legal Services Bill, with the Green Paper starting under a year ago and the Third Reading about to be finished tomorrow, with this proposed three years or thereabouts for an inquiry into eligibility. The period spent on this vital legislation was referred to by the noble Lord, Lord Beloff, who said that it was as though an emergency powers Bill was being passed with the enemy on our doorsteps. If that degree of alacrity can be adhered to, why on earth does it take three years to carry out vital research into a matter which cannot require anything like the energy that this Bill has required?
I go next to the question of tribunals and I fully support what the noble Lord, Lord Irvine of Lairg, has said with regard to the industrial tribunals and their complexity. We finished yesterday a two-day hearing of an appeal from an industrial tribunal concerned with race discrimination. It had gone up from the industrial tribunal to the employment appeal tribunal and to the Court of Appeal, where the Court of Appeal dismissed the application with a dissenting judgment and said that the employment appeal tribunal had overlooked that the industrial tribunal had not properly performed its function, in deciding as to whether a particular point had been satisfied by the ministry, and ordered that the application be sent back.
We completed our hearing. The result is quite apparent from the fact that we did not call upon the appellant to reply. That is some indication of complexity. There is a shortsightedness by the Government with regard to saving money by denying representation. Every judge is prepared firmly to make this observation: a case which is well presented takes far, far less time and enables one to be much more likely to reach the right result, thereby economising on the need for appeals. This is so often the case where you have complex matters such as are involved in the industrial tribunals.
The last point I would make is an enquiry. When I heard there was a suggestion about an order being made by my noble and learned friend the Lord Chancellor under Section 131 of the Employment Protection (Consolidation) Act 1978 to order the cases that have hitherto been tried in the High Court or elsewhere to be tried in the industrial tribunal, I looked up the section and I find that he can make an order under the section if the claim satisfies either of the following conditions: first, if it arises or is outstanding on the termination of the employee's

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employment or, secondly, if it arises in circumstances which give rise to proceedings already or simultaneously brought before an industrial tribunal otherwise than by virtue of this section. Alternatively, if the order so provides, it may satisfy both those conditions.
If an order is contemplated which only involves satisfying the obligation that the claim arises or is outstanding on the termination of the employee's employment, that will involve sending to the industrial tribunal a wide variety of claims where legal aid is now available which have nothing to do with the employment protection litigation, which all relates to the ordinary contractual relationship between employer and employee. I merely inquire as to whether the order has yet been sufficiently worked out to discover what will be its nature. If it is of the more restrictive kind, then in my respectful submission it is obviously quite wrong to withhold legal aid from such a tribunal and now to extend its jurisdiction.
6.44 p.m.
Lord Meston: My Lords, I feel I ought to declare an interest as a recipient of legal aid fees as a practitioner, I am proud to say, on the "cab rank", although I shall never be able to stand there in the sort of shoes to which the noble and learned Lord, Lord Ackner, has referred.
My first thought on hearing of this debate was to wonder why the noble Lord, Lord Mishcon, thought it necessary to bring the legal aid horse out of the stable again so soon after it had been thoroughly flogged round the course during the passage of the Legal Aid Act of 1988, and particularly since later this year we hope to see the first substantial report of the new jockeys at the Legal Aid Board.
The thought even crossed my mind that perhaps the House might have heard recently rather too much from the legal profession; but any such doubts were misplaced. This has been a stimulating debate, and the reports we have been considering cover new and continuing areas of concern. They also touch on some familiar areas, and what is now an all too familiar area of concern is dealt with in paragraphs 65 and 66 of the advisory committee's report. That relates to the impact of the entry of financial institutions into the conveyancing market, to which reference has already been made.
Under the rather depressing heading, "Breakdown in the Network", the committee say as follows?
"some firms may disappear altogether and others may shed their less profitable but time-consuming work so as to develop other areas of practice. In either case it is likely to become more difficult for the legally aided client to find a solicitor to act for him or her."
Again, in paragraph 66 the conclusion is reached that,
"Whatever solution is adopted, it is likely to cost money if the services available to the legally aided client, particularly in rural areas, are not going to decline."
The noble Lord, Lord Mishcon, dealt with the question of eligibility, particulary for civil legal aid. I read the letter from the Lord Chancellor to the Legal Aid Board dated 29th July 1988, which was published in the board's first report of May 1989.
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In that letter he indicated that the Government did not intend the broad proportion of the population eligible for legal aid to increase. But more of a problem, I suggest, is assessing the rate of decrease and looking after the interests of those on the margins of eligibility.
If we had the Utopia suggested by my noble friend Lord Hanworth, it would be marvellous; but if we do not and we have to make the best of the existing system I suggest to my noble friend that defamation cases would not be a priority for legal aid and one of the ways forward would be to consider wider use of legal services insurance. However, the difficulty is that when one looks at the proportions of the population eligible for legal aid and the question of financial eligibility, one is looking at several moving targets and frankly, it is not surprising that there is controversy over statistical analysis.
As we were also told, on the 13th November 1989 the noble and learned Lord the Lord Chancellor announced a review of eligibility to be undertaken by a working party over the next two or three years. That review was rightly welcomed by the advisory committee. However, as has already been said, the advisory committee had earlier called for an independent review of eligibility. It is a matter for regret that there is no independent element in the working party. I also share the advisory committee's hope that the working party could speed its work in order to prevent the downward drift in eligibility gathering momentum.
We must be concerned at the closing words of paragraph 15 of the advisory committee's report:
"the decline in eligibility and the increase in the costs of litigation show clearly that there has been a 'squeeze' on those seeking access to legal services."
The whole question of accessibility to legal services is something which I understand the Legal Aid Board is actively concerned with, and to that extent perhaps we should suspend judgment. However, this relates not only to where one should go for legal aid and advice but how quickly it can be provided. At the time board took over, the speed of processing legal aid applications could only be improved. There were agonising delays, particularly in matrimonial cases, affecting not only the applicant for legal aid, but the other party to the litigation or prospective litigation, and the children. I welcome the board's efforts to set and improve targets. That must remain a major priority.
Next there is the question of what can or cannot be done with legal aid once it has been granted. As has already been said, we still cannot have legal aid to be represented before tribunals. It is almost part of the ritual of these debates to call for legal aid to be extended to tribunals, and frankly it was encouraging to read the conclusions of the authoritative research summarised in paragraphs 130 and 131 of the advisory committee's report.
To be personal for a moment, I have just completed the ninth day of an industrial tribunal case brought by an applicant in person. We have at least two more days to go. I have no doubt whatever that if the case had been professionally prepared and presented, it would have taken half the time and involved about a quarter of the paper. It is no longer

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possible to say that industrial tribunals deal simply with simple questions. The law relating to dismissal, discrimination and the Wages Act is becoming more and more sophisticated. If, as has already been said, breach of employment contract damages claims will also have to be taken to the tribunals, there is a serious risk of injustice if proper representation is now allowed.
Legal representation can save money and time in the long run, not just in the way in which cases are presented but in settling them. Despite the adversarial image of lawyers and the Bar in particular, we spend a good deal of our time trying to spare our clients the expense, delay and upset of going to court.
That leads me to consider the question of conciliation. I agree with much of what has been said, and I welcome the suggestions of the advisory committee. I am familiar with the conciliation system as it operates at Somerset House and in some other county courts. I have seen the results of mediation in matrimonial, financial and property disputes. I want to emphasise one point: whether or not conciliation is to be court based, it has to be law based. The lawyers should not be allowed to disappear completely into the background.
For conciliation to work effectively, someone will still need to collate the information and to define, if not to present, the issues to the conciliator. My misgiving about conciliation in practice is that the weaker party—that is usually the wife in a matrimonial dispute—may be insufficiently protected from pressures to reach an agreement which may be contrary to her interests. In conventional court proceedings such a person usually has that protection. There may be further pressure towards reaching an agreement, whether or not it is in the person's interests, if the Law Commission's proposals relating to divorce are accepted and agreement on financial and property matters becomes the prerequisite for a final decree of divorce.
Therefore, I suggest that, welcome as it is, the move to conciliation still must involve a role for the lawyer. I welcome the suggestion in the advisory committee's report that the legal aid charge (that is the statutory charge securing the costs of the litigation) might not apply in respect of the costs of conciliation. That takes me to the question of the statutory charge. Reference has been made to the taxpayers' money. When one deals with the statutory charge one is dealing less with the taxpayers' money and more with the litigant's own money.
The rationalisation of the charge has removed one of the matrimonial lawyer's procedural nightmares. However, I suggest that there are further areas for rationalisation. First, the £2,500 exemption which has been around for a great number of years. It is still of some use in matrimonial cases but it will become an anachronism if it is not kept in line at least with the social security capital disregard.
The question of interest now operates on the amount charged against the matrimonial home. That is interest which now rolls up on the amount charged.
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It will need careful scrutiny, particularly if house values continue to fall and commerical interest rates continue to rise. There is still the anomaly that the charge cannot be deferred if it is secured on a home which is recovered and preserved for an unmarried mother with children, for example, in Law of Property Act proceedings, or for a child under the new proceedings introduced by the Family Law Reform Act 1987. I urge the noble and learned Lord the Lord Chancellor to look at these and other areas of potential hardship particularly now that the legal aid fund can charge interest and will recover its money in the long run.
In this week's New Law Journal there is a very interesting article entitled "In defence of the Green Form" by Dr. Sheila Hill. She concludes with a paragraph which is worthy of being read to your Lordships:
"In view of the precarious position of the legal aid system as a whole, it is incumbent upon critics to base their attacks on reason rather than conjecture and assertion. It is unhelpful to exaggerate the inadequacies of the legal aid system or the practitioners who operate it. It may make good headlines, but it will not help to preserve or to improve the system for those clients who have no choice but to use it."
That reminds us that legal aid is not a public service so much as a private one which is publicly funded, depending on the willingness and the ability of the lawyers who operate it. During the passage of the Legal Aid Act there were repeated references to a second-rate service. I hope that we shall never hear that phrase used again.
6.56 p.m.
Lord Prys-Davies: My Lords, the 39th Annual Report of the Law Society is the last report which will be issued by that body. We should thank the Law Society for its stewardship of the legal aid system for 39, or is it 40, years? It seems that it was left to the Lord Chancellor's Advisory Committee to draw attention to our misgivings and to the areas which are the justified cause of concern.
The principal issue which has emerged in the course of this debate is that too many people are now outside the scope of the legal aid system because the qualifying conditions are too low. It is surprising that that should be so because I believe there is a greater awareness by people of rights which are to be defended or of decisions which need to be challenged. There is an increase in the number of marriage breakdowns and in the number of people charged with criminal offences.
It is not surprising that more money is being spent on legal aid than ever before. A further point was powerfully made by the noble and learned Lord, Lord Ackner; namely, that inflationery pressures are also at work. Nevertheless, the dreadful fact remains that only about 56 per cent. of two-parent families with two children were eligible for civil legal aid in the year 1988–89, which is well below the 70 per cent. which applied in 1986–87 when the White Paper was issued and which had been established in 1979 by the late Lord Elwyn-Jones whom we remember tonight with great affection.
My noble friend Lord Mishcon dwelt at length on the significance of the fact that so many people are

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now excluded from legal aid. People with modest capital and income who are now just outside the reach of legal aid feel very strongly that they are excluded from benefits of the legal aid system. I have a feeling that this issue will not go away.
It is also my belief that there is broad agreement that the policy should be to restore as quickly as possible the 1979 level of eligibility. Reference has been made by many noble Lords to the review announced by the noble and learned Lord the Lord Chancellor on 13th November which is not expected to complete its work for about two or three years. A great deal of anxiety has been expressed that it should take two or three years to complete all aspects of the review. We therefore earnestly hope that the statement of 13th November does not mean that the Government propose to do no more for the time being in order to bring people within the scope of the legal aid system. My noble friend Lord Mishcon has urged that the noble and learned Lord should ask the review team to report on the need to uprate the financial condition before the end of the year so that people are not denied the means to defend their rights and challenge decisions. We await with great anticipation the noble and learned Lord's response to my noble friend's question.
I now want to turn to another issue which is beginning to emerge. The 39th Annual Report shows that for the first time since legal aid was established there was a fall in 1988–89 in the number of solicitors' offices receiving legal aid payments. This is the first time that this has happened in 39 years. That piece of evidence is to be found in appendix 4C of the report on page 68 and is again referred to on page 124 of the advisory committee's report. In 1988–89 legal aid payments went to 11,558 solicitors' offices, compared with 11,617 offices in 1987–88. One could say that that is a small fall, but I believe that the actual fall is almost certainly larger than the figures suggest. I say that because of the time lag involved. Payments will continue to come into a solicitors' office for about two or three years after the office has ceased to undertake new legal aid work.
It is agreed that too many people are unable to obtain legal aid because they are outside the financial criteria. If appendix 4C has picked up the beginning of a trend and that trend continues, there is now the possibility that even where a person obtains a legal aid certificate, it may in future be more difficult to find a solicitor who will accept instructions under the certificate. Appendix 4C is consistent with the evidence of the Law Society and the CAB that solicitors are withdrawing from legal aid work because the remuneration is below that for private work. That point has been made by a number of speakers in the course of the debate.
Before I leave appendix 4C I want to mention that it also shows that large firms are earning an increasing slice of the Legal Aid Fund. This may be a worrying trend. Thus in 1988–89, 36·7 per cent. of the legal aid budget was paid out to offices receiving more than 120,000 a year from the Legal Aid Fund. I have compared this figure with the figure for the years going back to 1985–86. In 1987–88, 31·06 per cent. of the payments went to large firms, compared
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with 23·7 per cent. in 1986–87 and only 18 per cent. in 1985–86. In that four-year period the slice of the fund paid to the large firms has increased from 18 per cent. to 36·7 per cent. It would be helpful if the noble and learned Lord could tell the House what is the true significance of this trend, bearing in mind the widely felt concern voiced by many noble Lords during the course of the debate and during the passage of the Courts and Legal Services Bill that the smaller high street firm, if it loses a substantial slice of conveyancing work as a result of the new legislation, will not be in a position to continue to cross-subsidise legal aid work.
I should now like to mention another important issue which has been highlighted not for the first time by the Lord Chancellor's Advisory Committee and has been underlined by my noble friend Lord Irvine of Lairg, by the noble and learned Lord, Lord Ackner, and by the noble Lord, Lord Meston. I refer to the failure to ensure that legal aid is available for more representation before tribunals. Reference has been made to the authoritative report last year on the effectiveness of representation at tribunals. It is well worth reminding ourselves that the team discovered that 150,000 cases a year were dealt with by tribunals. The research team concluded that representation at tribunals is full value for money, a point made by many speakers during the debate.
That is not the only reason or indeed the main reason why legal aid should be available for a greater breadth of representation before tribunals. The decisions of tribunals such as the Social Security Appeal Tribunal, the Industrial Tribunal and the Immigration Appeal Tribunal are as likely to affect or impinge upon the lives of many families, often disadvantaged families, as the decisions of the ordinary courts of law. I should like to remind the House of three significant findings of the research team. First, it found that 46 per cent. of cases which came before the Social Security Appeal Tribunal proceeded without the appellant or a representative of the appellant being present. Secondly, it found that in cases before the Industrial Tribunal only one-third of appellants were represented by lawyers while 48 per cent. of respondents were so represented. Thirdly, the research team found that the presence or absence of representation had an important effect on the outcome of the case. The advisory committee added that it had an effect on the quality of justice administered by tribunals. Tribunals, like the ordinary courts of the country, deal with basic individual rights. Their decisions can affect the whole family. We believe that the law should therefore guarantee representation before tribunals either by lawyers or by specialist advice centres where the appellant is eligible for legal aid.
Another point should be made. If legal aid were made available for tribunal representations it could lead to another beneficial result. Experienced solicitors in private practice are not attracted to welfare law. It is possible that more solicitors might be attracted to practise welfare law—this field which has been so neglected—if representation were to be made available before tribunals.
The final matter to which I should like to refer briefly is the need to identify gaps in the provision

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of legal services in a particular community or sector and then to take steps to fill such gaps. This aspect was touched upon in one of the debates in Committee on the Courts and Legal Services Bill. The efficiency scrutiny team recommended that some body should be under a duty to identify unmet needs and to consider how they should be met. That recommendation was made three years ago. Can the noble and learned Lord the Lord Chancellor tell us whether this work is being undertaken by any body?
I think that we all agree that the introduction of legal aid was one of the great reforms of this century. But there is clear evidence that it is being squeezed from two directions. Fewer people qualify for legal aid and it may be that fewer solicitors are prepared to undertake legal aid work. If nothing is done to address those two problems a significant proportion of our people will be denied access to the courts and to the tribunals to defend their rights and to challenge decisions which affect their lives.
The Lord Chancellor's Department is in the driving seat in this respect and, notwithstanding the pessimism expressed by the noble and learned Lord, Lord Simon of Glaisdale, we give it full support in its efforts to obtain the substantial and additional resources which are required.
7.12 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I should like to begin by expressing my gratitude to the noble Lord, Lord Mishcon, for initiating this debate. I should also like to thank all noble Lords who have spoken. The subject of legal aid, and a great number of its aspects, is a matter of supreme importance to the Lord Chancellor's Department and to the Lord Chancellor himself. I certainly have endeavoured to take a close personal interest in such matters since I have had responsibility for them and I know that my noble and learned friend Lord Hailsham of Saint Marylebone did likewise when he was in office.
I am extremely grateful to my noble friend Lady Faithfull for suggesting that the staff of the Lord Chancellor's Department should be increased. I hope that her plea will be effective. However, I must be realistic on such matters. As my noble and learned friend Lord Simon of Glaisdale pointed out, neither the Lord Chancellor's Department nor the Treasury has money of its own and any money which is to be used for improving legal aid in any respect comes from the taxpayer. Of course, in deciding the level at which such matters should be set, there are very general considerations to be taken into account into which it would not be appropriate for me to enter on this particular date. But once such a decision is taken the question of priorities arises within the competing claims. As was pointed out by my noble and learned friend Lord Simon of Glaisdale, there are competing priorities between social goods, and I believe that this aspect is one which has a considerable priority. I believe that when we look at the situation realistically we shall see that the expenditure on legal aid over the period of this Government's office has been extremely large and that it has increased considerably.
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Perhaps I may first, especially in the presence of my noble friend Lady Park of Monmouth, say a few words about the advisory committee. The situation is that we now have the Legal Aid Board in position. During the debate on the Legal Aid Bill I stated that I intended to review the role of the advisory committee some 12 months after the Legal Aid Board had taken over its responsibilities; that is to say, after April 1990. That is still my intention, although I shall not be in a position to make a final decision until about the middle of the year.
The White Paper on legal aid indicated—that is, the White Paper which preceded the Legal Aid Bill—that the role and function of the advisory committee would inevitably change once the Legal Aid Board was established. I am presently discussing with the committee its future position. I recently wrote to my noble friend stating that while I cannot say at this stage what will be the final decision, I am not currently minded to keep the committee in its present form as it no longer has a central role as a lay element to counterbalance the profession's administration of legal aid. I am also concerned to avoid duplicating the Legal Aid Board's work with regard to advising me on the provision of legal aid. In that respect I should like to see the board's annual report, which is expected in June, before finally deciding on what further arrangements may be necessary.
I informed my noble friend, who is the committee chairman, that I am particularly keen that the legal services conferences should continue. Those conferences are presently arranged by the committee as a key part of its activities. I believe that they are important as a means of ascertaining and bringing together the views on the arrangements for legal aid of all those who provide legal services. I have therefore asked the committee to advise me on how the legal services conferences might be maintained and developed and to outline the responsibilities which it might continue to have regarding them. As I said, discussions between the committee and myself on the issue are taking place at present. It would be appropriate, and not just because my noble friend is present in the Chamber, to say how much my predecessors in office and myself owe to the labours of the advisory committee over the years. I believe that it has a role to play in the future on the lines that I have indicated. But, of course, it is wise not to duplicate effort in this area because the resources for such efforts are scarce.
The next matter with which I should like to deal is the general question of eligibility and the funding associated therewith. The advisory committee in its report argues that the legal aid statistics indirectly show a fall in eligibility for legal aid. As your Lordships have mentioned, and as the report also notes, in November of last year I announced a package directed towards helping some of the more vulnerable groups. It was to take effect from April of this year.
From 9th April children's means will be assessed separately from those of parents. That means that most of them will be eligible without contribution. In my view that is an extremely important improvement in the arrangements. I believe that it

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would not be right to underestimate it. As I said, it means that most children will be eligible without any contribution whatever being made. In addition, pensioners dependent upon a small capital nest-egg will receive additional protection and all litigants in personal injury cases will have the benefit of an increased upper limit.
In November I also announced a review of the financial conditions for legal aid. Your Lordships and members of the advisory committee expressed some concern that the review is planned to take up to three years before it will be complete. In my judgment that is not an unreasonable period considering the need to fit in with developments to substantive law and procedure.
The review will be staged and will first of all consider legal aid in civil non-matrimonial proceedings in the light of the changes based on the Civil Justice Review. After that, criminal proceedings will be addressed and, finally, matrimonial proceedings. Matrimonial legal aid in particular must take account of the programme of work which covers the divorce process, conciliation and the court structure. A number of noble Lords made reference to these matters, including my noble and learned friend Lord Simon of Glaisdale and my noble friend Lady Faithfull. I personally am very interested in actively pursuing the possibility of improving the quality of the entire divorce process. The Law Commission's proposals on divorce, conciliation and the court structure—what is sometimes referred to as a family court—that is required to deal with these matters are under consideration. I believe there is considerable scope for improvement in that area.
As my noble friend Lady Faithfull pointed out, the Newcastle report does not give a sound basis for supposing that legal aid funds would be saved by opting for a conciliation service on a grand scale. The report also expressed doubt about the wisdom of opting for a court-based conciliation service. Therefore there are important issues to be addressed in that connection. I do not think it would be wise to try to deal with those issues in isolation.
I shall now return to the review. I made it clear in my announcement that any recommendations made in the course of the review, where practical and appropriate, would be implemented as soon as possible rather than waiting for the end of the review period. Therefore I hope that as we go along we may be able to make improvements. There will of course be consultation on the review while it is in progress.
One of the purposes of this review will be to explore whether there are ways of helping those of more substantial means when they are faced with the prospect of litigation costs which are beyond their reach. The noble Viscount, Lord Hanworth, suggested that it might be possible to have a graded system which would cover everyone. The noble Lord, Lord Meston, described that as an ideal world. I suspect that that may well be the case, but one of the objects of the review will be to see to what extent more flexibility can be introduced into the system. It is not just a question of reviewing the limits and seeing whether they can be raised, because we review the limits annually on the same basis as social
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security is reviewed. I should say that the limits represent the limits of disposable income. Disposable income is arrived at after allowing for deductions, including for example housing costs.
I hope that one of the aims of the review will be to see whether we can have a more flexible method of dealing with eligibility. Noble Lords have mentioned huge figures regarding the number of people who have passed out of the scope of legal aid in the past 10 years. Figures have been given ranging from 10 million to 14 million. However, they do not tell us very much about the precise situation of those people. Any statistician who has put such figures forward will realise that they are based on considerable assumptions. For this purpose I prefer to look at the scope of legal aid as it has been taken up. In 1979–80, 190,000 civil legal aid certificates were granted, including matrimonial certificates. By 1988–89 that figure had risen to an estimated 259,000. That is quite an important comparison. I agree that at the very end of that period there was a sign of a small fall, but I believe that comparisons over the 10-year period, which is the basis on which the other figures have been put forward, are a sensible way to consider the matter. If one considers the matter from the point of view of money, gross expenditure on all forms of legal aid has increased from £119 million in 1979–80 to £589 million in 1988–89. That is an increase in real terms of 250 per cent. Although it is always possible to point out that more could be done, it is absurd in the light of those figures to talk of cuts or of a decline in provision for legal aid.
I should say in passing that last year I invited the Legal Aid Advisory Committee to advise me on whether there was any area presently being serviced by legal aid which might be properly discarded in favour of some more important area which was being neglected. Not perhaps surprisingly, the committee could not suggest areas that we should abandon in favour of new fields, although it helpfully suggested possibilities of savings in some areas. Perhaps the most notable of those was the magistrates' courts. I entirely subscribe to the view that any saving and any reduction in waste of legal aid money should be actively pursued. If that money were saved, it would be available for some other desirable projects.
I have already referred to my next point which was mentioned once or twice. The length of time that the review will take is, I believe, reasonable having regard to what I intend the review to do. It is not just a matter of looking at the figures and reviewing various estimates of coverage but rather of trying to see whether we can devise a better system which is more attuned to what people need than the present system. I believe that the review is likely to be speedier than a completely independent review would be. During the course of that review there will of course be consultation.
Universal legal aid with graded contributions, which I believe the noble Viscount, Lord Hanworth, referred to, was considered by the Legal Aid Advisory Committee as long ago as 1984–85. I believe that the committee decided that that method was not a very practical way of making progress.

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Some questions have been raised with regard to remuneration. I think it may not be right to say too much about this at present as I have recently intimated to the Law Society and to the Bar the proposals I have for uprating this year. However, I should point out that my department and the profession, or at least the Law Society, agreed to have a survey carried out by Touche Ross two years ago. The survey was carried out for last year's uprating. The results—I do not wish to go into great detail about them—showed that it was perfectly possible to make quite high rates of profit from legal aid remuneration, even after allowing for a notional salary for the principals in the partnerships. It is true of course that that was very much dependent on volume. It is reasonably clear that the larger the volume of legal aid work a firm carries out the more chance it has of making a profit. Towards the end of his speech the noble Lord, Lord Prys-Davies, pointed out that quite a high proportion of the money spent in legal aid goes to people who are working at levels of £120,000 or more. That of course does not represent a tremendous number of cases per week having regard to the average cost of cases. Therefore the problem I face is that studies demonstrated that at that time it was possible to make a profit of quite substantial proportions.
The legal aid remuneration system is not geared to particular firms. It is not a question of paying a particular firm for what it does during the year. Rather, it is a question of paying on the basis of agreed rates. If those agreed rates are shown to be capable of generating a profit, it is hard to take account of the fact that some firms are not able to do that.
I have, of course, considered the question of whether some different system could operate. However, your Lordships will understand that those who have a large business are not particularly keen to offer to work at a discount in order that they may see their less busy brethren rewarded more adequately. It is an extremely difficult problem. I hope that we shall be able to pursue the matter through obtaining further information in the years ahead, by agreement with the profession.
In that connection perhaps I should refer to the point of the noble Lords Lord Prys-Davies and Lord Mishcon, that there is some sign of a fall in the number of solicitors doing legal aid work. As your Lordships know, it has been declared for some time that there has been such a fall. That has been accompanied by a steady rise in the number of pay points at which money is paid to solicitors. The figures that are being used to show a drop in the number of solicitors deal with the number of payment points, they are not necessarily indicative of a drop in the number of firms. However, I agree that that is a matter which must be kept in mind, and I have certainly done so. However, I do not believe that the figures demonstrate any fall.
My time is running short but I do not believe that that matters in view of your Lordships' economy with time, and I should like to say something about tribunal representation because a good deal has been said in that connection. The situation has been
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referred to by a number of noble Lords. The noble Lord, Lord Meston, comes to us fresh from experience of one such tribunal, in which he is apparently opposed by a litigant in person. That can also occur in the courts, where litigants in person may, nonetheless, qualify for legal aid for a variety of reasons which it is not always easy to determine. I agree that at present legal aid is not available in the type of tribunal to which the noble Lord referred.
Noble Lords have referred to the research on representation at tribunals by Hazel and Yvette Genn, for whose efforts I am very grateful. They have produced a very interesting and illuminating report. I need hardly say that before there is any extension of the scope of legal aid the Government will have to look very hard at the expenditure implications.
As the committee acknowledges, there are also major policy considerations in relation to tribunals. In my view those need to be addressed before one comes to the question of finance. For example—and the noble Lord, Lord Prys-Davies, alluded to this—the researchers noted that lawyers were not necessarily more effective than non-lawyer specialists before the tribunals which they examined and that the provision of legal aid as such across the board was therefore not necessarily the right solution.
The questions about tribunals do not relate merely to their diversity. There are questions now as to how far the Franks criteria of informality and simplicity can be sustained by tribunals administering complex law. That is not to say that one should immediately abandon the approach which has traditionally informed tribunal procedure and go over fully to armed combat between lawyers, but it is a matter which certainly needs careful consideration.
It is also apparent that some appeal tribunals—for example, social security appeal tribunals—to a considerable extent provide an opportunity to correct initial decisions based on insufficient information. That suggests that the focus should not in all cases be directed simply at the tribunal in question but also at the preliminary information-gathering stage.
Those are merely illustrations of the large and complex issues affecting tribunals which I am seeking to study with my colleagues. The precise way forward is difficult to identify, for the reasons I have given.
Some reference has been made by the noble and learned Lord, Lord Irvine of Lairg, and my noble and learned friend Lord Ackner to Section 131 of the Employment Protection (Consolidation) Act 1978. That provision empowers me to enable industrial tribunals to hear certain damages claims arising out of contracts of employment. A difficulty sometimes—not very frequently—arises, in that claims under the contract fall partly within and partly outside the jurisdiction of an industrial tribunal, which is inconvenient to the parties. An order under the Act would enable claims subsidiary to the main claim, generally for unfair dismissals, to be heard together.

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It is true that legal aid would not be available in the industrial tribunal, but nevertheless it is hard to see that the claimant would essentially as the result of an order be in any different position from the position he is in now. It would be open to him to choose between the convenience of disposing of all the claims together or of seeking legal aid, if he were eligible, for the subsidiary claim in the county court. There has been consultation on the matter by the Department of Employment and there appears to be general support for the change. I am now considering with my colleagues the details of an order that might be made.
Reference has been made to the anxieties that the committee expressed about the possibility of a breakdown in the network of solicitors' offices and of a reduction in the numbers at the junior Bar. Perhaps I could take the second problem first. My noble and learned friend, Lord Simon of Glaisdale, posed again the question that Lord Gardiner posed many years ago. I believe that the Bar is now returning a new and informed answer to that question. It is making arrangements under which new pupils coming to the Bar may have a measure of financial help and a reasonable chance of pupillage and tenancy, and, if not one of the tenancies, then a library arrangement, which was not in contemplation in Lord Gardiner's time. I believe that those changes, far from reducing the effectiveness and availability of lawyers of standing at the junior Bar, will have the opposite effect. I believe that that will be to the benefit of the legal services in this country as a whole.
So far as concerns the network of solicitors' offices, the problem is said to arise from the proposals in relation to conveyancing. Those arguments have been developed considerably during the passage of the Courts and Legal Services Bill through your Lordships' House. I have no reason to suppose that solicitors will not be able to compete effectively with the institutions. I do not believe that it would be appropriate for me to go into the matter in detail here because we have discussed it in connection with the Courts and Legal Services Bill.
However, I believe that the overall effect of that Bill will be, at the very least, to provide an opportunity to reduce costs. My noble and learned friend Lord Hailsham I am sure would wish to attribute that to Part I of the Bill, which implements the Civil Justice Review. I believe that the opportunity for reductions of costs will not be confined to that part.
I believe that the figures I gave concerning the money that has been expended on the provision of legal aid services demonstrate the commitment of the Government to the provision of those services. I believe that what we have done in seeking to improve the administration and delivery of legal aid is of the first importance. I believe that the administration of legal aid by the new Legal Aid Board which has now taken over from the Law Society is showing signs of considerable improvement. There is plenty of scope for more improvement, but I believe—this point was made by the noble Lord, Lord Meston—that to get the administration into good shape must be the first
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priority. It is no good having a great scheme available if the delays are so long that one cannot take advantage of it. I believe that administration is very important.
I should like to echo what the noble Lord, Lord Prys-Davies, said about the Law Society's stewardship of the scheme over 40 years. The scheme grew a great deal in its hands and it handed the scheme over with great grace to the Legal Aid Board, which addresses the problem of administration very effectively. It is important that, for example, in cases relating to children, applications for legal aid should be speedily disposed of. I certainly hope that we shall be able to make effective arrangements in connection with the implementation of the Children Act.
The debate has raised many interesting questions, many of which I shall have to keep in mind in the future. However, as matters stand at present, we have no reason to be ashamed of what we have done, as the figures demonstrate.
Lord Mishcon: My Lords, I should like to re-emphasise my debt of gratitude to all noble Lords who have contributed to the debate. Whatever the doubts that the noble Lord, Lord Meston, might have had about the relevance of the debate at this time, he found them removed by the debate. I am most grateful not only to noble Lords, but to the noble and learned Lord the Lord Chancellor for the care which he has exercised in replying to the debate. I know that he will forgive me—he always does—if I point out that I find some matters a little hard to take.
On the eligibility issue, it is rather absurd and unreliable to talk about figures or percentages of those who are eligible and those who are no longer eligible. The noble and learned Lord's White Paper quoted a figure of 70 per cent. of people who were eligible, yet, in November, the noble and learned Lord quoted a reduced figure of 56 per cent. Either those percentages should not be quoted at all or if they are quoted—perhaps I may put this most deferentially—they should be frankly accepted, especially when the figures are contrary to the Government's wishes.
On the question of tribunals, it is not as though there are now fresh issues. The matter has been urged from all quarters of the House over a substantial period of time. If my memory serves me correctly, when the Legal Aid Bill was debated the principle of assisting representation at tribunals by way of legal aid was admitted as one that the Government should take on board. It was then argued that it was a question of priorities between the various tribunals, but the principle was admitted and it was merely a question of when the Government could afford it. Fresh reasons are now given which seem to postpone the matter ever further. I had hoped that we should at least have reached that stage of government policy when we discussed the Legal Aid Bill.
On the question of the three-year period, I admired very much, as I always do, the noble and learned Lord's advocacy. However, if ever I had to go before a judge and tell him that an action should not be

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heard for three years and use the same language as the noble and learned Lord used about the period of time that would be taken for the review, I know that I should get short shrift from the learned judge when I made that submission. I should be ordered to get moving, to be a little more efficient and to ensure that the case was ready within a reasonable period of time.
Having said all that, I repeat my appreciation. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

London Local Authorities (Miscellaneous Provisions) Bill [H.L.]
7.45 p.m.
Baroness Gardner of Parkes: My Lords, I beg to move that this Bill be now read a second time.
The main provisions of the Bill cover parking control in Part II, special treatment premises in Part III, entertainment in Part IV and a number of different items under the miscellaneous provision in Part V, including burglar alarms, scaffolding on buildings and class of use. Part VI covers liability of directors as related to the other particulars in the Bill.
Although I am convinced that the provisions of the Bill cover only necessary powers and will be of great benefit to the people of London, I am aware that there are petitioners against some parts of the Bill. The Royal Automobile Club, the Freight Transport Association and the Royal Scottish Automobile Club are petitioning against Part II of the Bill. I am not entirely clear where the Royal Scottish Automobile Club stands in relation to central London, but perhaps it feels that a precedent might be set and it does not wish the same thing to happen in Edinburgh. Otherwise, I cannot see its relevance if it is true to its name. It is interesting to note that the AA is not petitioning. I understand that the AA now supports the view that local authorities should control parking in London.
There are many points in the petition that do not show an understanding of the present situation in London. For example, there is a great deal of talk about how we must have only one parking system for the whole of London. When I was on the Greater London Council, we did not hold the view that there should be one regulation for the whole of London. I represented part of outer London where we found that the main need was for parking control for one hour in the morning when communters would fill the area so that residents could not move their cars in or out of their own homes. By introducing that measure, people moved into the good large car park attached to the station which they had previously not bothered to use because it was easier to clutter up everyone else's streets. There has always been a clear need for different timings. The hours of restriction in Covent Garden are now quite different from anywhere else in London. In the Victoria area residents' parking is enforced until 10 o'clock at
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night. That is proving a great success. It is good for local authorities to have more control in that respect.
That approach frees the police and the wardens to deal with the major roads, which are so important in keeping the traffic moving, rather than the minor roads. The Department of Transport has estimated that the cost of illegal parking in London is now over £200 million in lost benefit. It is believed that there are about 350,000 illegal parking acts in central London every day lasting more than 20 minutes each. We are not talking about the person who pulls up for one second. We are talking about people who are illegally parked for more than 20 minutes. There is a great need for something to be done in that regard.
The RAC view is well intentioned and aimed at helping its members. The RAC state that there would be two separate groups of people looking after matters. The situation would be even more chaotic if the police continued to look after yellow lines and local authorities looked after residents' parking, as was once the Government's view. Surely some local authorities would start busily to remove the yellow lines and make more areas which they could satisfactorily control, or the illegal parkers would all move off the meters and residents' bays on to the yellow lines. I can envisage all kinds of possibilities.
There are no petitioners against Part III. I am pleased about that because that part of local authority control was brought forward under the Local Authorities (No. 2) Bill. There was strong petitioning against that measure at that time. Part III concerns complementary medicine and other forms of special treatment premises. Fortunately, the way the Bill has been drafted means that all those categories which felt that they had legitimate cause before—and I, too, thought that they had legitimate cause—are now covered because it includes any group which will have a proper code of practice and a list of members. The whole idea of this part originally was to prevent the use of premises for prostitution or other immoral or undesirable purposes. Under the exemptions in Clause 8 of the Bill there will be exempt:
"any member of a professionally constituted body of health practitioners, with a register of members, who are subject to codes of conduct and ethics and a disciplinary board and have professional indemnity insurance"—
it is very important to ensure that the public are protected against claims for negligence—
"and the body concerned has given proper notice to the borough".
So far as I understand, we have now resolved the question of treatment centres and there are no petitions against that section.
The cinema bodies are petitioning against Part IV—entertainment. I do not think that the petitions which oppose Clauses 23 and 25 are at all unreasonable. However, the cinemas resent the fact that they will have to pay the cost of having the premises inspected. At present the premises are inspected for fire and safety entirely at the expense of the local authority. The changed community charge means that that cost will be borne entirely by the community charge payers. It seems to me only right that cinemas should pay the correct charge. There is

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a degree of misunderstanding in that they seem to believe that they will be able to be charged anything, but that is not so. They will only be able to be charged the actual cost of the inspection. That seems very fair.
There is no petition against Clause 24 but I am pleased that it is included in the Bill. It covers private clubs and private places of entertainment, such as small rooms used in upstairs premises. Certainly Westminster knows that many such places exist in the centre of London and I am sure that they also exist in other places. At the moment they are subject to no safety controls at all because they are private and do not have to conform to any standards.
Part V has caused the strongest reactions on both sides. There are two petitions against it: one from the Building Employers' Confederation, which covers a number of different points, and another from Slough Estates. The building employers are opposed to the 20-minute cut out on intruder alarms. In this regard I recently looked at a cutting from the Hampstead and Highgate Express of November 1989 in which it was reported that the residents of West Hampstead eventually took the law into their own hands and smashed a burglar alarm which had been making their lives a misery by ringing persistently. Understandably, I suppose, the man who did it would not give his name. He said that the alarm had gone off in the middle of the night three times in the past month and he had decided that it was time for action. Most of us have had the experience of finding a burglar alarm going off when somebody is away for a long weekend. It can be extremely irritating if there is no way of obtaining access and cutting it off.
The building employers also found it onerous to be asked to take responsibility for scaffolding, and in particular for ensuring that it could not be used as a means of entry in order to burgle the adjoining houses. They think that that is an unreasonable condition to put upon them. I do not find it at all unreasonable. I had to rebuild my own house. The one concern of all my neighbours around was about burglary and entry by means of the scaffolding on my structure. It is common for burglaries to take place when building works are being carried out in the vicinity and scaffolding is convenient for people to shin up easily and thereby pop into any house nearby. It is very upsetting.
Someone has to take the responsibility. The building Employers' Confederation discusses whether it should be the scaffolder who may have left the site or the owner. That kind of point should and quite clearly will be discussed in the committee to which this Bill will be committed. It is important to sort out who will be responsible. Presumably the responsibility will pass from one to the other. There will be a responsibility on persons to produce the correct form of scaffolding in the first place but clearly it would be unreasonable to ask them to come back and maintain the lighting or whatever once they had finished that part of the work. The Building Employers' Confederation in its statement says that although the obligation is on the scaffolder now to ensure that the scaffolding is lit, the scaffolder is never there but someone else sees that it is done. So apparently these things are worked out quite
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reasonably between the various sections of the building trade.
Those two items were of minor importance and not of the most overwhelmingly major importance in the petitions from the Building Employers' Confederation and Slough Estates. In each case those bodies are very disturbed about the suggestion of a change of class of use. In fact Slough Estates is completely and frankly financially interested. It makes no bones about it—it is its one upset. It feels that it will cause a loss of value. The Building Employers' Confederation put forward a number of other reasons such as the need to retain land for building and so on.
It all boils down to the fact that in 1987 there was a change in the Use Classes Order which brought together office and light industrial premises and put them into the one category. It meant that no planning permission was required to change a small workshop into an office. It is much more profitable for people to let or own office space than it is to let small workshop space. I have had letters on this matter. The first that I should like to mention comes from the noble Baroness, Lady Young, who said that she would have liked to have spoken in support of Clause 29 but she could not be here this evening. In particular she draws attention to the Savile Row tailoring industry. She writes that:
"recent rent reviews have shown a five-fold increase and landlords are declining to renew leases because it is more profitable to let to an office user".
She explains that, as we all know:
"Savile Row has been the centre for British tailoring of the highest quality and is important for future export growth of British menswear. It is essential that a bespoke tailor should have his workshop adjacent to the place of sale".
There is also the possibility under this legislation that Westminster City Council in particular, which is probably the most adversely affected area because that is where office premises are most sought after, would have the opportunity to create specialist industrialist zones. For example, in Covent Garden there are many small hand craft workers who could all lose their places because they would simply be priced out.
Just as I came into the House I was handed a letter from a tailor in Savile Row. There is the Royal Warrant in one corner of his letter paper and on the other—which I found rather interesting—is the warrant of the late Emperor Napoleon III. I have not come across that before on notepaper. His case is much the same as that put by the noble Baroness, Lady Young. He writes that the purpose of this Use Classes Order was:
"to aid economic development by allowing landlords to change the use of their property without the need to obtain planning permission … The result of the changes … however has been to drive out these specialist workshops as landlords take the opportunity to refurbish or redevelop property for more lucrative office space."
He again confirms what the noble Baroness, Lady Young, said about landlords refusing to renew leases. He states:
"The loss of light industrial space will have a detrimental effect on the whole character of the West End and diminish the special role that it plays in the country's economy. Although the changes in the Use Classes Order were designed to encourage economic

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development, it seems that in London they are actually having the opposite effect".
He again mentions that,
"the West End is unique [as] the shopping capital of our country. The workshops of the Savile Row tailors and other industries contribute to the magic of the West End. They help to attract people from all over Britain and the world"—
I confirm that—
"who are drawn by the diversity and quality of its shops and businesses".
Everyone knows that the Department of the Environment has commissioned a review. They also know that the result will be too late to prevent the break-up of the industrial composition of the area. That is why it is so important that the Bill should proceed rather than wait for a review, which will be a case of closing the door after the horse has bolted.
Quite a different letter came from the Association of Photographers. Its address is EC1, not very far from my surgery. It stated that very soon no one will be able to have a small studio because such premises will simply not be available. In that very different part of London people are finding exactly the same difficulties as in the West End.
It has always been the desire in planning terms to retain a mixed economy. When the GLC was moving so much so-called non-conforming light industry out of London, we saw a tremendous reduction in the small workshops and places where people could work close to where they lived. We have a shortage of employment for people who are not suited to office work but who wish to be occupied in other ways and who have skills and crafts which add a fascination to the capital. I therefore believe that it is most important that we should consider the Bill very carefully tonight.
Moved, That the Bill be now read a second time.—(Baroness Gardner of Parkes.)
8.2 p.m.
Lord Ezra: My Lords, the Bill, the Second Reading of which has been so ably introduced by the noble Baroness, Lady Gardner of Parkes, contains an interesting miscellany of provisions. I do not imagine that we shall wish to speak on all of them. My noble friend Lord Tordoff will be concentrating on Part II, on the parking provisions. I should like to concentrate on three clauses—audible intruder alarms, Clause 27; scaffolding licences; and class of use. I was struck with the importance of all three.
There is not the slightest doubt about the nuisance caused by burglar alarms that go off for long periods in built-up areas. Indeed I asked a Question on that on 16th October last. The noble Lord, Lord Rea, who will be answering the debate tonight, was kind enough also to answer on that occasion. I asked whether there was a need for the existing code of practice—which seemed to be very largely ignored in practical terms—to be made mandatory and in particular to make it obligatory to have cut-off devices.
I live in the City of Westminster. I have complained several times to the council about these nuisances. I find that I am not the only one. In
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1988—which I presume is the year for which it has the latest statistics—it received 300 complaints. The issue of burglar alarms that keep people awake is one about which it receives the largest single volume of complaints. I have not the slightest doubt that it is an important provision. I am delighted that the City of Westminster is putting it forward. I hope that the Government will support it.
When answering my Question, the noble Lord, Lord Reay, stated that he had every sympathy for the views expressed. That does not commit him to anything more than sympathy, but that is what he stated. I believe that the fitting of a cut-off device after 20 minutes is essential. The notification of installation to the police and local authority is also important. The selection of two keyholders is again a vital element. I believe that there should be provision to enter premises by force in certain circumstances, if these devices continue to go off in spite of all these provisions.
I have noticed what the Building Employers' Confederation said in its petition. However, I feel that the trouble caused to people living in these areas is so paramount that I hope a solution will be found and that the measures that are proposed will not be minimised.
On licences for scaffolding, I again fully support what is proposed. I am chairman of a local residents association in Westminster. There is growing concern about the security risk of having scaffolding around, not only to the building that is being renovated—damage can there be done only to the structure—but with regard to neighbouring premises to which greater access can be given. It is essential that the question of security should be safeguarded in the way proposed.
Finally, on the class of use, again I have every sympathy for what is proposed. We are losing too many of these small businesses from London. London is becoming filled with office space and so-called luxury flats. I should have thought that in order to maintain the diversity of activity in the capital there should be a safeguard for small businesses which over the years have developed great skill and renown. As the noble Baroness pointed out, they contribute considerably to our export trade and are a great attracton to tourists. I am fully in support of returning to the position before 1987 whereby this class of use was protected.
I do not agree with the view apparently taken by the Department of the Environment that we should wait for the result of the inquiry. That could take some time, and in the meantime businesses could be closed down. For those reasons I fully support those three provisions in the Bill.
8.8 p.m.
Lord Lucas of Chilworth: My Lords, I am grateful to my noble friend Lady Gardner of Parkes for her explanation of the Bill for which she seeks a Second Reading tonight. But I fear that she is under a number of misconceptions with regard to Part II. I regret that I shall have to explain why I fear that. It would also be fair, although according to our conventions not strictly necessary, for me to remind

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your Lordships that I am a member of the Royal Automobile Club public policy committee.
When considering Part II of the Bill it is necessary to remind ourselves that the Secretary of State is responsible under the Road Traffic Regulation Act 1984 for regulation of traffic on trunk roads in London. It is the boroughs which are responsible for regulation of traffic on non-trunk roads. But the police and traffic wardens, who are responsible for the enforcement of those regulations on all trunk and non-trunk roads in London and across the country, come under a different authority, the police authority.
My noble friend stated that she could not understand why the Royal Scottish Automobile Club was concerned in this matter. Purely and simply, the Scottish interest is that for the purposes of legislation, the 1984 Act, to which I have already referred, applies in Scotland as in England. There is, therefore, a real interest because anything changed in England by virtue of this Bill could have an effect in Scotland; hence the interest.
We know, do we not, that there are about 8,125 miles of roads in London, including about 250 miles of trunk roads. There are 20 bridges and two tunnels. There are 35 local authorities. My right honourable friend the Secretary of State for Transport in his consultation document Traffic in London proposes a special route network upon which parking, loading and unloading and so on would be curtailed. The proposals apply to 224 miles of trunk and about 86 miles of non-trunk or borough roads. If the 35 local authorities were to acquire their own independent powers—Part II of the Bill allows for that—the various powers of enforcement would create an absurd, if not bizarre, situation. There could be 35 different regimes covering trunk and non-trunk roads with differing policies and priorities between the boroughs.
Chaos and confusion would reign. The proof of that lies in the experience that we have with the night-time and weekend lorry ban which operates in London. I believe there are 22 boroughs which participate and 35 which do not. Nobody knows where they are with mile upon mile of roads covered by different regimes. That is a nonsense.
In this Chamber we are continually talking about bureaucracy. Were Part II of this Bill to be allowed in its present form—in any form, I suggest—there would undoubtedly be a duplication of powers; not an extension or a substitution but a duplication. The Bill would confer on local authority civilian staff powers that are presently only available to the police and traffic wardens. In fact the power for local authority staffs to clamp or remove vehicles would exceed the powers currently available to the police and traffic warden authorities. I do not believe that that is a situation to be entertained. It would completely undermine what the Department of Transport is aiming for—an overall transportation policy in London covering Underground, bus, road, rail and so on.
Your Lordships should be greatly concerned that Part II would create a precedent. It would almost certainly encourage other local authorities across the
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country to seek similar powers of traffic enforcement, again quite independent from the police and the warden service. This would compound the confusion and possible inequities I have spoken about that arise from the fragmentation of an enforcement function. We already have great difficulties as we move across the country in terms of lighting and sign posting. This Bill would add to those difficulties. We could have every local authority throughout Scotland, England and Wales having its own set of rules and regulations—an impossible position when seeking to control and direct traffic.
Finally, I should perhaps draw attention to the diversion of revenues. As drafted, the Bill provides that revenue arising from the additional parking (penalty) charge would go to the boroughs. That could give rise to almost any situation in so far as charges are concerned. Local authorities are under tremendous pressures on their spending and their revenue-raising activities. This Bill would give them a golden opportunity to run riot on the revenue-raising possibilities from motor vehicle transportation.
It is not only I who object to this. The Government in their paper Traffic in London, paragraph 7.17, state:
"There are also objections in principle to allowing local authorities to use income generated by fines and penalties to enforce permitted parking controls. The proposals would require an entirely new legal mechanism to ensure the collection of unpaid charges. This could involve substantial costs and could take a long time to implement. During this period uncertainty about the future role of the police traffic warden service would remain. The proposals are therefore rejected".
I believe that I have outlined to your Lordships sound reasons which have given rise to the Petition of the Freight Transport Association, the Royal Automobile Club and the Royal Scottish Automobile Club. I hope the Select Committee will reject Part II of the Bill.
I want to touch on two other areas covered by the Bill. They relate to charges. We had before your Lordships a few weeks ago a private Bill from the borough of Merton which included power to raise charges for the fixing of traffic directional signs on street furniture. This was rejected largely because it would give rise to almost uncontrolled charging by local authorities for a variety of services. In Part IV of this Bill, to which my noble friend Lady Gardner referred, we come to one of these areas. Again I have to say to my noble friend that she has missed the point. This part of the Bill refers to the cinema licence fee. She said that the petitioners resent paying the cost of inspection for fire and other safety-related purposes. That is absolute nonsense. They do not resent paying for that.
Baroness Gardner of Parkes: They are not paying it.
Lord Lucas of Chilworth: If they are not paying it, why was it necessary for my noble friend to say that they resent paying it? They have given no indication of resenting payment for inspection of fire and other services. What they resent, and what is in the Petition, is that the Bill in Clauses 23 and 24 alters

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the current cinema licence fee arrangements which are set by the Home Office.
The threat that the cinema operators fear is derived from the fact that, uniquely among other leisure activities which are licensed by the local authorities, the cinema is subject to censorship. The censorship is imposed by the cinematograph licence. A substantial number of district councils sought to involve themselves in local film censorship activities following the enactment of the Local Government Act 1972. They were then dissuaded from so doing by the high cost to themselves of setting up the necessary procedures.
Disguised in the Bill before your Lordships this evening are these new powers under Clause 24 which, if allowed, mean that the local authorities would then be able to take over the censorship role and charge in the licence fee the huge costs involved which they rejected in 1972. The net result would be that we should have, as it were, a totally unacceptable erosion of the credibility and acceptability of the British Board of Film Classification. That board has the support of the Home Office and, indeed, the film industry. It would disrupt the present national system of film distribution, promotion and exhibition that is based on the existing categories which are allocated to individual films by the British Board of Film Classification.
Lastly, the result would be the closure of a material number of cinemas and an intolerable and unnecessary burden on the remainder. This is at a time when the cinema industry is recovering and proving itself to be a vital social amenity, particularly in some of the deprived inner city and other areas which face social problems. That is the reality of what Clauses 23 and 25 would achieve. It is no good my noble friend suggesting that that is a resentment at paying quite proper charges to have safety and other inspections.
I merely wish to touch upon Clause 29, about which both the noble Lord, Lord Ezra, and my noble friend Lady Gardner of Parkes have spoken. To my surprise I have also received letters from the Association of Fashion Advertising and Editorial Photographers and from four firms engaged in the tailoring business. I should certainly like to underline what my noble friend Lady Gardner said about the maintenance of some light industry and manufacturing industry in the area. We have heard so frequently, have we not, of the necessity to maintain our manufacturing industry. Whether it is the manufacture of shirts or of suits, it does not matter. It is manufacturing—exporting—and it goes towards reducing the balance of payments deficit.
I have little doubt that the committee to which this Bill will be committed will look at all those points. However, I certainly suggest that Part II is confusing, totally unnecessary and quite contrary to government intentions. I am quite sure that the other areas can be taken care of when counsel for the petitioners put their case in more detail.
8.25 p.m.
Earl Attlee: My Lords, I agree with much of what the noble Lord, Lord Lucas of Chilworth, said, especially as regards parking in central London. If I understand correctly what the noble Baroness said, it was that each borough needed to make its own parking arrangements, and she quoted Covent Garden. However, there is nothing to prevent different parking arrangements being made for different areas of London. I should have thought that that was the obvious thing to do.
I was very interested in what the noble Lord, Lord Ezra, said about scaffolding. I had not actually thought of that aspect. With regard to intruder alarms, I agree that they really are terrible. I know about them to my cost because I was a keyholder in London and I lived about 12 miles from the premises for which I held the key. I have been called out by the police, sometimes at two o'clock in the morning. I had to get into my car, drive up to London, check the building, switch the alarm off and reset it. I believe that on every occasion it was a false alarm. Therefore, the cut-off point of 20 minutes is a very good thing.
One aspect worries me. If you have been for a few drinks or been to a party with the other keyholder and have both had a few drinks, what will happen when the keyholder is called out? You would both have to say that you could not come because you had been drinking and did not wish to break the law. I do not know what would happen in that case, but such things happen.
There was a very bad rail crash at Eltham Well Hall a few years ago. I had been to a party some distance away from where I lived in Finchley. I heard the news. I had not driven to the party, and I then had to go to London. Therefore, I had to hire a chauffeur-driven car because I had been drinking. Subsequently, I was up all night and did not arrive home until the following morning. I know that that is not exactly the same situation as an intruder alarm but it is the same sort of problem. If you get stopped it is no good saying to the police, "I am sorry, I had to come because I am the keyholder and the other keyholder has gone on holiday", or something like that.
In our locality we have a neighbourhood watch scheme. The alarm of some neighbours across the road is sometimes triggered off by the dog and can ring for a very long time. Luckily, that bell is quite quiet and is not too disturbing.
As regards scaffolding, it is obvious that if there is scaffolding people will use it. I thought that if there were ladders you had to put boards up against them and I presume that you could put barbed wire around the scaffolding. I do not know about that.
I intended only to speak about Clause 29. Like the noble Baroness, I received a communication from the Association of Photographers and as I came into the Prince's Chamber this evening I also received a communication from Napoleon III's tailors. I also received a letter from Mr. Barry Reed. He is the chairman of Austin Reed and I have known him for many years. He shows the same concern as other bespoke tailors, although his business is a sufficiently

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large one and for him the problem is not so great. I should like to read out one paragraph of his letter:
"The new rules had potentially disastrous consequences for all the craft industries located in Central London, in particular the tailors of Savile Row. Now that their workshops can be converted to office space without planning permission, it has meant that all recent rent reviews have shown a five-fold increase. Worse still. landlords are declining to renew leases because it is more profitable to let to an office user".
You can obviously charge more for an office than for light industrial use. I agree with other noble Lords who have already spoken that it would be a great shame for those craft industries to die out in central London because many are world famous.
There is one other point which I should like to make. We know that the Department of the Environment is currently reviewing the Use Classes Order 1987. One letter which I have received stated that since 1987 in their rent review clauses leases refer to B1 users. There is a fear about what will happen if an existing lease refers to that under the old 1987 Act. Will these people be covered by the new Clause 29? If not, they will be in the same position as they currently are.
8.31 p.m.
Lord Tordoff: My Lords, I rise with the feeling that I ought to change my tailor!
We are grateful to the noble Baroness for the way in which she introduced this Bill. It is a wonderful compendium of different matters. When I looked at the part which said "scaffolding licences", I thought perhaps she was bringing the gallows back to Tyburn, and I read that rather carefully. I then realised that it was about something quite different.
I am glad that she raised the point about security of scaffolding. I remember during the 1979 election, when operating from our party's headquarters in the National Liberal Club in Whitehall Place, there was a considerable amount of security for our party leader and others going in and out of the building. Passes were checked, and certain gentlemen appeared with odd bulges under their jackets. The front of the building was being cleaned. Suddenly, halfway through the campaign, scaffolding appeared at the window of the room in which we held our daily press conference. At that point I realised the security threat which could be posed by scaffolding. I am sure the noble Baroness is also quite right in relation to scaffolding on private premises.
As my noble friend Lord Ezra mentioned, I want to deal with Part II of the Bill. The noble Lord, Lord Lucas, dealt with this part at considerable length. I find myself somewhere between the position that he takes and the position the noble Baroness takes. He is perhaps being a little harsh on the Bill. I have considerable sympathies with the views of local authorities in this matter.
The problem of enforcement of parking regulations in the Greater London area is serious. It is a problem we touched on a few weeks ago when discussing a Motion that I had the honour to introduce to your Lordships' House on the traffic situation in London. The question is whether this Bill, as it stands, achieves the purpose of improving
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enforcement. It goes some way towards it, but some of the objections raised by the noble Lord, Lord Lucas, are valid. They have been set out by the RAC and others and no doubt will be set out in much greater detail and more eloquently by learned counsel—who will be better paid than I am—when it goes to the Select Committee. I do not need therefore to go into it in any great detail.
I shall touch on the question of money raised from fixed penalties going to the local authority. I sympathise with the local authority in that matter. If, by doing that, they can obtain better enforcement, then I would be in favour of it. It is the question of duplication and the confusion in the minds of vehicle users which is the problem.
The RAC, in their petition, say that vehicle users will not know from one area to another whether the local authority and its officers are empowered to levy the additional parking charge, issue fixed penalty notices or clamp or tow away their vehicles. It is that lack of clarity in the minds of the parking public which is the problem with the Bill as it is laid out.
Some local authorities are already taking the law into their own hands. My good friends in the excellent administration in the borough of Richmond on Thames, Hampton Wick and Twickenham, where specific traffic problems are experienced, operate a system of private traffic wardens using notice of intended prosecution with £12 fines. They believe that they are able to pursue that system through the local government general duties provisions. They support Westminster's bid to put it on a firmer legal footing.
Overall, I accept that the problem will be that we shall have a patchwork of applications of the regulations as we move from one street to another; not all of us are exactly sure where the boundaries of one borough or another are drawn in this great city.
That takes us back to the basic question that I raised in the previous debate regarding the need for an overall traffic authority for Greater London. I cannot help but return to that point. With 33 boroughs—or however many there are—we often find difficulty in administering the traffic and parking regulations in an area which is not 33 separate entities, but is a whole city; admittedly, as the noble Baroness said, there are a number of areas in the city. I thought the noble Earl, Lord Attlee, clearly made the point that it should be possible in Covent Garden to have different regulations even within an authority covering a much greater area.
I endorse what was said on the subject of small businesses in the city. It would be a great tragedy for the city if tailors were forced to move out, whether in Savile Row or anywhere else. There are others which are not quite so upmarket, but which ought to be preserved. There are also a number of other small businesses which should not be turned into offices if the city is to live as a genuine entity.
I am afraid that I am ambivalent about the parking restrictions. I see what they are trying to achieve, but I fear that some of the problems the noble Lord, Lord Lucas, mentioned may arise if the Bill goes through in this form. I hope that the Select

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Committee can iron out these difficulties before it comes back to your Lordships' House for Third Reading.
8.37 p.m.
Lord Underhill: My Lords, knowing that I am interested in traffic conditions and transport matters, my noble friend Lord McIntosh of Haringey—who deals with local government and environmental issues—discussed this Bill with me. He made it quite clear that he will leave Part II, on traffic, entirely to me, and that he has no strong views on any other aspect of the Bill. Therefore the noble Baroness need not convince my noble friend Lord McIntosh. He is quite happy for the Bill to go to Select Committee, and for them to deal with the matter.
I hold much the same view as the noble Lord, Lord Tordoff. I can see what the Bill hopes to achieve and I greatly sympathise with it. Regarding Part II of the Bill, strangely enough, no one has been in touch with me. I have heard nothing from my friends in the RAC; nothing from the AA; nothing from the FTA. I thought that nobody objected to the Bill and I was surprised to hear tonight that the RAC raised strong objections to it.
Part II of the Bill tries to achieve what all of us want—that is, more effective parking enforcement. Although I do not want to live in Greater London, from the standpoint of the Bill perhaps I should like to be in Greater London. I live in the Epping Forest district council area, where there are a number of police stations—they seem to be more like report stations. We hardly see a traffic warden and we suffer from illegal parking. That badly needs regulation enforcement. If this Bill is passed and I lived in the area, I should like to see the council do something about the parking situation.
On my reading of the Bill participation is optional. A council will be a participating council if it decides to participate. It is not compelled to carry out the provisions. A parking charge, in addition to the initial charge and the excess charge, seems a fairer way of trying to achieve enforcement.
I recognise that one could have different regulations in neighbouring boroughs; but, as the noble Lord, Lord Lucas, stated, we have different regulations for trunk roads—which are administered by the Department of Transport—and local roads, which are administered by local authorities. We already have that differentiation. There are clear definitions of what is a specified person and a proper person; and Clauses 6 and 7, regarding the removal and immobilisation of vehicles, seem to be satisfactory. I notice also that the fully authorised officer is clearly defined in Clause 2.
There are two Acts affected by the Bill. We have the Road Traffic Regulation Act 1984 and the Road Traffic Offenders Act 1988. I have not the slightest doubt that aspects of these two Acts will be considered by the Select Committee. I am quite happy for the Bill to go forward and for those matters which have been raised, particularly those mentioned by the noble Lord, Lord Tordoff, and the
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doubts which I have as well, to be left to the Select Committee to iron out.
I have not the slightest doubt that the Department of Transport has its views and will obviously either present a paper or appoint a witness to put its views before the Select Committee. I believe that the Bill is trying to do something in Part II. I should like to see it go forward to the Select Committee and for the points that have been raised to be ironed out there, because what we want is enforcement in a number of boroughs which do not have it.
I have criticised, as has the noble Lord, Lord Tordoff, the absence of a strategic traffic authority in London, but while we do not have that the Bill goes some way towards it. Therefore I should like to see it go to the Select Committee for it to deal with some of the points that have been raised.
8.42 p.m.
Lord Reny: My Lords, it may be helpful to the House if I intervene briefly to give an indication of the Government's view on the Bill. In general, the Government have no objection to the principle of London authorities, as they are empowered to do by statute, promoting the Bill seeking additional general powers for the London area. There are, however, a number of provisions in the Bill which give rise to considerable concern in departments. Like my noble friend Lord Lucas of Chilworth and, I think, the noble Earl, Lord Attlee, the Department of Transport and the Home Office have serious misgivings about Part II of the Bill, which concerns new arrangements for parking controls.
The Bill proposes a new "parking charge" in place of the fixed penalty for overstaying the "excess period" at a parking meter or other designated parking place. The Bill would also allow local authority officers to issue fixed penalty notices and to secure their enforcement, whereas at present only the police and traffic warden force may do so. The Bill would further allow local authority officers to authorise vehicle removal and wheel-clamping for breach of parking and traffic regulations. In all these respects, the Bill seeks to divert receipts from fees and penalties to the authorities concerned.
The Government fully accept the need for effective enforcement of parking controls. To that end they have themselves brought forward proposals for change in London in the light of lengthy consideration of the issues with the local authority associations and the police. The proposals were set out in a consultation document Traffic in London, issued by the Department of Transport last December. The period for consultation concluded on 28th February. Replies are still being considered.
In the Government's view, it would be premature to proceed with the proposals in the Bill before the outcome of a consultation exercise on these very issues has been settled. Therefore, the Secretary of State for Transport, with the support of his right honourable friend the Secretary of State for the Home Department, intends to oppose these provisions in a report to the committee on the Bill.
The Home Office has also a number of concerns about Part III (Special Treatment Premises) and Part

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IV (Entertainment) of the Bill. Part III introduces a licensing system for special treatment premises, which includes massage, manicure, acupuncture, tattooing, cosmetic piercing and chiropody. Neither the Home Office nor the Department of Health has any objection in principle to the proposed powers, although the Home Office takes the view that additional restraints on legitimate trade should only be imposed where there is a clear evidence of need. The Home Office is also concerned about the inclusion of a licensing condition relating to fire precautions which it considers are adequately covered by general legislation.
As to Part IV of the Bill, this seeks to amend the general Acts which deal with the licensing of theatres, cinemas and places of private entertainment. These proposals would have the effect of creating differences between the licensing regimes which apply in participating boroughs in London and those which apply in other parts of the country. The Home Office would want to be satisfied before agreeing to changes of this kind that a difference in treatment can be justified. If not, the better course would be to consider whether any changes of national application to these Acts are necessary. Departments have also raised with the promoters other points of concern in respect of provisions relating to audible intruder alarms (Clause 27), scaffolding licences (Clause 28) and planning: use class (Clause 29).
On Clause 27, both the Department of the Environment and the Home Office have reservations about the provision which imposes restrictions on the operation of audible intruder alarms, a subject to which the noble Lord, Lord Ezra, returned this evening. He very fairly reminded your Lordships of the sympathy which I had expressed on the last occasion on which he raised the matter. But even then I think I drew the attention of the House to some of the difficulties which surround any proposals that have been brought forward; although I must say that I had not anticipated the problem that the noble Earl, Lord Attlee, brought to our attention of keyholders who had all been drinking.
The proposals in the Bill have implications for the security of property and for police powers and resources. The Department of the Environment and the Home Office have doubts as to whether the provisions as they stand are realistic or practicable.
Lord Ezra: My Lords, I quite understand that these departments could have reservations. But I hope that at the Committee stage, if they express those reservations, they will put forward alternative proposals to safeguard people who want to preserve their sleep.
Lord Reay: My Lords, if the noble Lord had contained himself for a moment, I would have said that we accept that burglar alarms can be a serious source of noise nuisance. The Department of the Environment is carrying out a review of noise. Burglar alarms have been identified as a topic for special discussion. The review working party is expected to produce its report in the late summer, and it is hoped that this may contain what, in our view, may be some more practical solutions for
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dealing with the problem of noise from burglar alarms.
Clause 28 empowers a highway authority to include in scaffolding licences which it issues under Section 169 of the Highways Act 1980 two specific terms. The first is to prevent unauthorised persons from having access to scaffolding or climbing it. The second is to protect the security of the building.
While the Department of Transport can understand the reasons for this clause, they believe it to be superfluous. Subsection (1) of Section 169 of the 1980 Act already provides that,
"a licence may contain such terms as the authority issuing it thinks fit".
Therefore, and subject to the appeal system in subsection (3) of Section 169, there is no limit to the terms which may be included in a licence. Therefore, there is no point, in our view, in arbitrarily providing for two specific terms, as to do so could be regarded as devaluing other terms not included in the clause. The department, therefore, sees no need for Clause 28.
As to Clause 29, the Government are well aware of concerns about the Business Use Class (B1) of the Town and Country Planning (Use Classes) Order 1987 which have led the promoters to include this provision. In particular, the Department of the Environment has received representations suggesting that the Business Use Class is fuelling redevelopment pressures for offices, particularly in inner London, and driving up rents to levels which long-standing occupiers of light industrial and workshop space cannot afford. This is a problem which my noble friend Lady Gardner of Parkes, in particular, dilated on at some length.
The effect of Clause 29 would be to subdivide the Business Use Class (B1) for the purposes of development control in London. In so doing, however, the clause conflicts with present government policy, which is to allow flexible use of premises, and thus foster enterprise, where that can be achieved without significant adverse effects on the environment or local amenities. It would also pre-empt the findings of independent research into the effect of the order, sponsored by the Department of the Environment, of which mention has been made, and the results of which are expected in the summer. Furthermore, to abrogate the provisions of the order selectively by means of a private Act would be procedurally undesirable. For these reasons, the Secretary of State for the Environment opposes Clause 29.
I have to say that on this and other outstanding issues, if suitable amendments cannot be agreed with the promoters, we shall have no alternative but to submit departmental reports to the Select Committee opposing these provisions.
8.50 p.m.
Baroness Gardner of Parkes: My Lords, I should like to thank those who have participated in this very interesting debate. I feel I must respond to a few of the points that have been made. I am delighted that the noble Lord, Lord Ezra, has given general support to the proposal, and I shall say no more about that. However, I must respond to my noble

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friend Lord Lucas of Chilworth, although I am pleased that he supported Clause 29.
My noble friend's comments on the cinema situation make me believe that he did not read the petition. He said that the people had no concern about the fees—yet they keep referring to that matter all the way through. They bring up, for example, the fact that at present the maximum fee is £173·15. Then they go on to say that, as petitioners, they attach importance to control by the department of these fees. They then describe the difficulties that might arise if excessive fees are proposed. They also refer to,
"the prospect of the sums in question and the fees".
And so it goes on. I could read out point after point along those lines; but nowhere in the whole document do they say anything about censorship. If there was a real fear of censorship, in order for the committee to consider it, as I understand it, that point should have been included in the Petition. I think this point must be a slight red herring.
On the question of censorship, I do not think that there is cause for alarm. I sat on the film viewing sub-committee, which was the censorship body of the GLC, and it was the most agonising duty I can recall. Always, if I was rung up and told that they could not get a quorum, I knew that not only was it going to be a pretty awful film in terms of pornography but so unattractive and badly filmed that none of the men wanted to go and so all the women ended up having to view it. If people were compulsorily obliged to sit through such a quantity of awful films as I have seen there would be no need to worry about censorship because it would turn them off immediately. I believe that censorship in terms of the cinema is a thing of the past. I do not see any suggestion of it in this Bill; nor is there any suggestion of it in the petition.
Parking is a different matter. It does not seem to be appreciated that at the moment local authorities already have the power to tow away vehicles. Outside London they can charge for it but they cannot charge for it inside London. So already there is a difference in the situation as between outside London and inside London.
I recall very clearly a debate in this House, followed by a free vote, when we were considering the introduction as a pilot scheme of wheel clamps. Very different views were held. I was always a great supporter of wheel clamps and I think they have been a success. However, I remember the noble Lord, Lord Mishcon, whom I always think of as the man with the golden words, making an impassioned plea about the case of a priest who would not be able to visit someone on their deathbed or a rabbi who might be similarly prevented. It was a fascinating speech to listen to but of course it totally ignored the fact that anyone who was in danger of being wheel-clamped was in the wrong and was parking illegally. Your Lordships will remember that in the end the scheme went through.
I mention the point because the scheme was introduced in a very small area even of one borough in the first instance and when it proved a success
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there it was extended to another small area of the same borough. From that we have gradually seen it spread. During the debate a statement was made to the effect that other boroughs might see how good the scheme was and other parts of the country might see how well it worked and wish to introduce it; surely that is no bad thing. If it is seen to work so well that other parts of the country view it as a success, surely that means it is effective.
Perhaps also it may not be appreciated that Westminster already has its own traffic wardens, wearing their own uniform and operating in charge of resident parking areas together with other arranged areas. So again what we are suggesting is not new; it is just a variation or extension of what is there already. The very fact that these trunk roads are so important and will require a great deal of additional policing if they are to be turned into priority routes and kept clear means that the staff will not be available for the work they are now doing in areas off those important priority routes. I believe that this is a logical and common sense approach.
One very important point I must respond to is the view expressed that a local authority would run riot in terms of revenue raising. First, it will not have the powers to do that, and, secondly, there is well-established case law which sets out clearly that it will not have the right to charge whatever it likes.
The noble Lord, Lord Tordoff, made some interesting points about parking. He referred to a patchwork. It may be a patchwork, but I think there is a need for a patchwork arrangement rather than uniformity because conditions can vary.
What is important, and what perhaps can be sorted out at the Committee stage, is clear signing of what type of area the motorist is in. I have said in your Lordships' House on other occasions that I should like to see agreement on an international sign for wheel clamping. Outside my home in London I find myself regularly telling foreign visitors not to park there because they will be wheel clamped. If there could be a small international symbol on, say, a lamp-post, no one would need to warn them and of course they would not stay there and risk the danger of wheel clamping. The same applies to any other sort of parking area. Over the years I have seen many areas where cars have been allowed to park in one street just outside a certain type of zone which begins in the next street, and there has been a clear sign saying, "You are entering a restricted parking zone". Signing is terribly important.
As regards an overall traffic authority for London, many of us think that this is the only way we shall ever get agreement on a borough-to-borough basis, because it is very natural for us all to want to pass our problems on to the next borough, and only an overall strategic view will help that.
My noble friend Lord Reay said that the Government were concerned that the receipts would be going into local authority coffers, but of course such receipts would be used for traffic control and would enable a better standard of traffic flow for other people. I believe that that is why the AA have changed their attitude and are now supporting this. They want to see traffic in London moving, and a reduction in the costs.

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Intruder alarms were also mentioned, and the noble Lord said there were now powers to deal with them. The present powers which the local authorities have spring from the Control of Pollution Act 1974. One has to have persistent activation of the powers and the procedure is very cumbersome. Notices have to be served and offenders taken to court. It is not at all something about which one can achieve a very rapid result, so I do not feel that the present situation is satisfactory. The local authorities would not be bringing any of these matters forward if they were not unsatisfactory.
The noble Lord also said that the Government wish under the B1 category to foster enterprise and I think the letter that I read out earlier made it quite clear that, although everyone accepted that the intention was to simplify this industrial office use, exactly the reverse effect was taking place. In particular, the procedure is killing small enterprises. The Slough Estates petition said they have 1,300 businesses in London and a portfolio of 664,000 square feet. One must appreciate that people like Slough Estates have had what I would call windfall profits from this change of use, because there is an automatic and great increase in the value of rental from industrial premises. We really cannot allow that to go on for any length of time.
I hope that the House will agree to refer the Bill to the Select Commitee, on which five noble Lords will sit and all the opposed sections of the Bill will be carefully examined. There will of course be submissions from both sides and everybody will be heard. I am grateful to all your Lordships who have participated in the debate.
On Question, Bill read a second time, and committed to a Select Committee.

Town and Country Planning Bill [H.L.]
Reported from the Joint Committee with amendments, and recommitted to a Committee of the Whole House.
Planning (Listed Buildings and Conservation Areas) Bill [H.L.]
Reported from the Joint Committee with amendments, and recommitted to a Committee of the Whole House.
Planning (Hazardous Substances) Bill [H.L.]
Reported from the Joint Committee without amendment, and recommitted to a Committee of the Whole House.

Planning (Consequential Provisions) Bill [H.L.]
Reported from the Joint Committee with amendments, and recommitted to a Committee of the Whole House.
House adjourned at nine o'clock.