Lords Sitting of 20 February 1991

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

Lord Griffiths of Fforestfach
Brian Griffiths, Esquire, having been created Baron Griffiths of Fforestfach, of Fforestfach in the County of West Glamorgan, for life—Was, in his robes, introduced between the Lord Harris of High Cross and the Lord Deedes.

Gilt Edged Stocks Issue
2.48 p.m.
Lord Donoughue Lord Donoughue asked Her Majesty's Government:
Why the United Kingdom monetary authorities have felt constrained to renew the issue of gilt edged stocks.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): My Lords, the decision to issue gilts on 23rd January, 4th February and 18th February was taken to assist market management by the Bank of England and is fully consistent with the Government's funding policy.
Lord Donoughue: My Lords, I thank the Minister for that Answer. Is he aware that the latest respectable City forecasts from Kleinwort Benson show the domestic deficit, the borrowing requirement, becoming £11 billion in the next year? The necessary funding for that is forecast to be £20 billion. Is he further aware that in last year's Budget speech Mr. Major stated—and I quote this in order not to do him a disservice—that he deplored previous governments who,
"spent more than they were prepared to raise honestly from taxation"?—[Official Report, Commons, 20/3/90; col. 1014.]
Later, in the Independent newspaper, he said that he would prefer to raise taxation rather than return to deficit.
Can the Minister inform the House whether the Government will honestly raise taxation to cover this huge deficit, or will they run a disreputable deficit like their predecessors?
Lord Strathclyde: My Lords, I do not know whether or not the noble Lord's forecasts from the City are respectable. However, I do know that in the Autumn Statement the Chancellor of the Exchequer forecast a public sector debt repayment of £3 billion. As I am sure the noble Lord knows, a new forecast will be published in the Budget Statement on 19th March.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the latest issue, far from being a market adjustment, is the first visible and minute acknowledgment from the Government that their policy of privatising the public sector borrowing requirement has failed? It has so far reduced the
542
finances and cash flows of industry, with likely losses and reduced profits to be made in the forthcoming year, that a public sector borrowing requirement will be inevitable in default of any increase in taxation.
Lord Strathclyde: My Lords, I am afraid that the noble Lord is quite wrong. In recent months there have been substantial purchases of gilts from the private sector by the banks and building societies. The full fund objective means that such purchases have to be funded by sales of gilts by the authorities, thus adding to the amount of gilt sales required. That is why there has been an issue of gilts; nothing else.
Lord Gisborough: My Lords, does my noble friend agree that the party opposite is expert at borrowing, if at nothing else? Does my noble friend further agree that it is expert as regards approaching the International Monetary Fund?
Lord Strathclyde: My Lords, my noble friend is absolutely correct. Noble Lords opposite who were in another place at that time will no doubt know considerably more about that matter than we do.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that today's figures show that we are now officially in recession? Would not the right policy be for the Government to run a public service deficit, coupled with substantial reductions in interest rates?
Lord Strathclyde: My Lords, as the noble Lord knows, that is of course a decision for the Chancellor of the Exchequer when he makes his Budget Statement in March.
Lord Peston: My Lords, I was surprised by the remarks that the Minister made in reply to his noble friend. Surely the Minister is aware that the overwhelming majority of the national debt of this country was incurred by Conservative governments, mostly to finance wars over a long period of time. It would be wrong of the Minister not to acknowledge that. Having endeavoured to help the Minister, I must say that I thought I heard him say that the recent issue of gilts was part of the Government's funding policy. Will the Minister tell us what the Government's funding policy now is, and particularly what it will be, as the Government themselves have pretty well acknowledged that the Budget will go into deficit in the coming year?
Lord Strathclyde: My Lords, I do not think the Government have suggested any such thing. On the point about funding policy, my right honourable friend the Prime Minister said in his new year interview in the Financial Times:
"The objective is to balance the budget over the medium term, not in every single year. If damaging and destabilising tax changes are to be avoided, this could mean moving into modest deficit when output is below trend and modest surplus when output is above trend".
I do not think I can express the position more clearly than that.
The Earl of Lauderdale: My Lords, can my noble friend remember any date on which the party opposite when in power repaid one single penny of the national debt?
Lord Strathclyde: No, my Lords. However, this Government have repaid debt to the tune of some £26 billion over the past 11 years.
Lord Peston: My Lords, I do not like this shilly-shallying, but if noble Lords opposite insist on this kind of nonsense I hope I may point out, without boasting—
Noble Lords: Question!
Lord Peston: My Lords, I shall get to my question in due course, but the Minister normally likes to understand what the question is about before he endeavours to answer it; that is why I am endeavouring to help him. I speak not for myself but for the noble Lord, Lord Jenkins. Does the Minister recall that the last Chancellor who brought the Government's finances into some kind of equilibrium was a Labour Chancellor of the Exchequer? That fact gives us no cause for shame. While we are on this subject, is the Minister aware that what his right honourable friend the Prime Minister stated in the Financial Times interview was a complete departure from what his own predecessors had been saying for the past 10 years, which was that the Budget should be balanced every year and not just over the cycle? The Government have quite clearly made a U-turn.
Lord Strathclyde: My Lords, we have as a long-term objective sought to obtain a balanced Budget every year. However, as experience has shown, that is not always possible. Our long-term aim has been to achieve balanced Budgets, and in that respect we have been considerably more successful than the previous Labour Government.
Lord Mackie of Benshie: My Lords, do I understand in my simple agricultural way that the Government need more money? Is that because they have overspent or because they have not earned enough?
Lord Strathclyde: My Lords, the answer is essentially that we are balancing the amount of Government income and spending on the basis that we are repaying some of the gilt edged stocks which are maturing in the current year.

Middle East: Arms Control
2.56 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
Whether it is their policy to include in the post-war settlement in the Middle East the removal of all weapons of mass destruction from that area.
Lord Reay: My Lords, our policy on the proliferation of weapons of mass destruction is well known. After the Gulf conflict is over, our aim is to work with others to improve security in the Middle East and to make progress on arms control.
Lord Hatch of Lusby: My Lords, the noble Lord will no doubt know that the Foreign Secretary discussed a similar question two days ago in another place. To a certain degree, he appeared to be looking ahead positively. Is it the Government's policy, in
544
looking ahead, to plan for on-site inspections of nuclear, chemical and biological weapons throughout the whole of that region? If so, does that mean that the nuclear weapons that we know are held by Israel—which is the only nuclear power in that region—will also be subject to on-site inspections?
Lord Reay: My Lords, our policy is to work to curb the proliferation of weapons of mass destruction. We advocate progress by means in particular of the Nuclear Non-Proliferation Treaty, the Chemical Weapons Convention and the Biological Weapons Convention. As regards Israel's nuclear capability, we believe that all states in the Middle East, including Israel, should sign the non-proliferation treaty and place their nuclear facilities under International Atomic Energy Agency safeguards.
Lord Cledwyn of Penrhos: My Lords, does not the noble Lord agree that the Government should be more prudent in authorising the sale of arms to other countries? What is the policy of Her Majesty's Government in relation to the sale of arms? What is the latest position with regard to the Soviet initiative, because these are related matters? Furthermore, has Tariq Aziz returned to Moscow?
Lord Reay: My Lords, I am afraid that I cannot reply to the final question that the noble Lord the Leader of the Opposition asked, as I do not have that information. I shall endeavour to address myself to the terms of the Question which concerns the peace settlement after the present conflict in the Gulf is over. As regards arms sales, it is our view that countries must be able to defend themselves and to spend money on arms to maintain their security. However, the concentrations of arms which we have seen in the region give cause for concern. We believe that all arms exporting countries should exercise restraint in arms sales, above all those which could assist the construction of weapons of mass destruction.
Lord Beloff: My Lords, does my noble friend agree that the obvious desired end, that Israel should be a subscriber to a major arms agreement, is likely to come about only when Israel's neighbours declare that the state of war which has existed between them and Israel since 1948 has come to an end, so following the admirable example of the late lamented President Sadat which has borne such fruit?
Lord Reay: My Lords, the fundamental principles which we hold to with regard to peace in the Middle East is the right of all states in the region, including Israel, to live in security, and with self-determination for the Palestinian people.
Lord Mellish: My Lords, is the Minister aware that some of us feel that it would be ludicrous if after all the destruction that has taken place in an effort to put down that man Saddam Hussein at the end of the day he was left with weapons of mass destruction and was allowed to get away with it?
Lord Reay: My Lords, the noble Lord's view will be shared by other people. Our aims in the conflict in the Gulf are well-known and are in pursuit of existing United Nations resolutions.
Lord Mayhew: My Lords, what role do the Government foresee for the International Atomic Energy Authority in the post-war Middle East? Can the Minister say whether the agency's inspections have continued in Iraq since the invasion of Kuwait? Finally, why do the Government oppose the extension of those inspections to nuclear facilities in Israel in accordance with Security Council Resolution 487?
Lord Reay: My Lords, we encourage increased adherence to the Nuclear Non-Proliferation Treaty, which carries with it the obligation to accept IAEA safeguards on all nuclear activities.
Lord Campbell of Alloway: My Lords, does my noble friend agree that it is not profitable, or indeed possible, to answer the type of hypothetical question posed by the noble Lord, Lord Hatch? Does he agree that all one can hope for is that after the resolution of the present crisis, arms dealing in the Middle East may be controlled by international agreement, which is always difficult to achieve?
Lord Reay: My Lords, the proliferation of weapons of mass destruction, particularly but not only in the Middle East, gives considerable cause for concern to us and to many others. It is a matter to which we are giving a great deal of thought.
Lord Williams of Elvel: My Lords, with reference to the second supplementary question of my noble friend Lord Cledwyn about the movements of Mr. Tariq Aziz and in view of the great interest in the matter, will it help the noble Lord if I tell him that the Soviet Union announced about an hour ago that he had not left Baghdad for Moscow, that he was not expected in Moscow tonight and that the Soviet Union had invited him to give the Iraqi response to the Soviet embassy in Baghdad?
Lord Reay: My Lords, the information which the noble Lord has given may well be of interest to the House, but it remains outside the terms of the Question.
Lord Cledwyn of Penrhos: My Lords, it may remain outside the terms of the Question but it is nevertheless a matter of such public importance that if the noble Lord has any information he should give it to the House.
Lord Hatch of Lusby: My Lords, I welcome the reply given by the Minister to my first Question, which is a probing question. I also welcome the fact that the Foreign Secretary is already, and rightly, engaging in preparations for the period after the war. However, does the Minister agree that the simple continuation of the non-proliferation treaty as it has been applied so far will not be sufficient to prevent the arming and re-arming of countries in the Middle East and elsewhere? Does he also agree with my noble friend the Leader of the Opposition that the only way to prevent that is to introduce a ban or restrictions on the export of arms so that no weapons of mass destruction can again be accumulated in the region and to ensure that those which already exist are destroyed?
Lord Reay: My Lords, the non-proliferation treaty has served us well. No doubt there are flaws in the existing international arrangements but we must make the best use of what we have.

Property Repossessions
3.4 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they will introduce legislation to prevent repossession of the houses of those who cannot meet their mortgage repayments due to high interest rates.
The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch): My Lords, no. The lender must have security in the event of default. If the law were changed to remove that security, mortgages would cease.
Lord Molloy: My Lords, while I thank the noble Baroness for that compassionate reply, is she aware that already 100,000 families are homeless and that people are being made homeless at the rate of 800 a week? Is she aware that that creates enormous burdens for local authorities which have to try to rehouse some of those people in bed and breakfast accommodation? Is she also aware that many of the houses from which those people have been evicted are still empty? Will the Government consider extending the period for paying back the mortgage and reducing the amount required immediately in order to give those people a chance to stay in the homes which they set out to buy with so much pride?
Baroness Blatch: My Lords, the Question on the Order Paper asks whether we will introduce legislation to prevent repossession. Legislation is not required to permit some of the measures which the noble Lord suggested. Those changes can come about within the existing legislation.
Lord Gisborough: My Lords, is my noble friend aware that building societies are falling over backwards to avoid repossessing homes and are very happy to reschedule loans? Does she agree that it is very important that borrowers contact building societies as soon as possible and do not leave it until the last moment?
Baroness Blatch: My Lords, my noble friend has made a very important point. It is not in the lenders' or anybody's interest that homes should be repossessed. The Council of Mortgage Lenders has produced a code of practice and has appealed to people to get in touch with the lender when they first have difficulties. Local authorities are aware of the code of practice. The Government have made £11 million available to citizens advice bureaux to help counsel people who are in difficulty.
Lord Stallard: My Lords, will the noble Baroness comment on the building society policy of pursuing borrowers for the difference between the repossession price and the amount that is outstanding?
Baroness Blatch: My Lords, the noble Lord referred to what a lender does at the very end of the line after all other avenues have been pursued. If

547
people in difficulties seek advice early a range of measures is available to them: deferring interest; extending the period over which a loan has been taken out; income support relief for people on income support to meet at least half of the interest for the first 16 weeks and all of the interest on a loan thereafter; and, where feasible, advising people to rent out part of the property. At the end of the day, when all else has been considered and where a person whose home has been repossessed is in a position to meet the bill, that bill has to be met by somebody.
Lord Stallard: My Lords, with respect, the noble Baroness has not replied to the question. I asked her about the people who have been through all those stages and the building society then pursues them for the difference between the repossession price and the amount that is outstanding.
Baroness Blatch: My Lords, the lender allows someone to borrow money at a rate of interest. If that debt cannot be met and a charge is outstanding on the lender, that money has to be retrieved somehow. If it is from the borrower, then the borrower becomes liable.
Lord Stoddart of Swindon: My Lords, is not one of the morals of the problem that people buying houses should not be encouraged to take out loans larger than they can manage to repay? Have the Government any advice to mortgage lenders in that regard?
Baroness Blatch: My Lords, there is considerable advice along the lines suggested by the noble Lord. Many of those who have borrowed money to buy homes and are now in difficulty—0.47 per cent. of borrowers—have overextended themselves. That very important advice is given to everybody.
Lord Dean of Beswick: My Lords, in reply to my noble friend Lord Molloy the Minister said that legislation was not required to deal with the situation. Every day 150 owner occupiers have their homes repossessed. Does the Minister understand the devastation felt by those people? They will probably suffer the effects for the rest of their lives. Can the Government give some hope of a scheme to alleviate that suffering and to relieve the terrible burden that those people and their families are expected to bear?
Baroness Blatch: My Lords, the figures are of concern to the Government. For that reason the issue is being addressed. However, context is important. There are 9.4 million people with mortgages. Of those mortgages 0.47 per cent. are in fact the subject of repossession. That is not commensurate with the figure given by the noble Lord. Only 9 per cent. of all homelessness is due to repossessions, again a figure not commensurate with the one given by the noble Lord.
Lord Dean of Beswick: My Lords, I am sorry to intervene again. The noble Baroness says that my figures are not commensurate with hers. That indicates to me that she considers them inaccurate. They are not inaccurate; they are quite specifically correct. The noble Baroness uses a very small percentage of the global figure as a justification that
548
things are all right. Does she not understand that when the unfortunate people who come within that small percentage lose their home the figure becomes 100 per cent. and not 0.4 per cent?
Baroness Blatch: My Lords, I agree with the noble Lord that repossession is a cause of distress to that person. However, a great deal is being done to advise people properly, in particular those who over extend. Only 9 per cent. of homelessness is caused by repossessions. That is the figure that I want to put into perspective. The other figure to keep in perspective is that 98.5 per cent. of people who take out a mortgage are in fact coping.
Lord Cornwallis: My Lords, is the Minister aware that building societies are by no means in the forefront of those seeking repossession of properties? Is she further aware that once the keys have been pushed through a building society's door and surrendered, there is very little that the mortgaging company can do? The people have made themselves homeless. Building societies are doing everything in their power by way of counselling, advice and telephone contact to keep people in their homes by whatever method possible. Can the Minister make clear that the worst thing that people in difficulty can do is voluntarily to surrender their keys?
Baroness Blatch: My Lords, the noble Lord makes a very important point. The worst thing that a person in difficulty can do is surrender the keys. The best thing that they can do is take the earliest possible advice. We know that some people, with all the advice in the world, still seem to get into difficulties. For that reason the Council of Mortgage Lenders has produced a code of practice. We have increased funds to the Citizens Advice Bureaux to help, advise and counsel people in difficulties. Local authorities are also playing a part. I am aware of the work being done by individual building societies. A great deal is being done to help people avoid getting into difficulties in the first place.
The Lord Privy Seal (Lord Waddington): My Lords, I hope your Lordships will accept that we ought to move on. If we are to limit Question Time to 30 minutes, we must leave some time for the last Question.

The Coal Industry
3.14 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Whether they have any further proposals for the coal industry.
Lord Cavendish of Furness: My Lords, the Government have given substantial support to the coal industry over the past 11 years. We have approved over £7 billion of new investment and have also provided for grant aid around £17 billion, including provision of over £6 billion deficiency grant under the Coal Industry Act 1990. It is now up to British Coal's mineworkers and management, working together, to make the best use of this investment to

549
transform the corporation into a competitive and profitable enterprise. As to the future, the Government remain committed to returning the coal industry to the private sector. But no decisions will be taken on the future structure of the industry until after the next general election.
Lord Dormand of Easington: My Lords, is the Minister aware that British Coal has said for the first time that if cheap coal imports continue many United Kingdom pits will close permanently? Is he further aware that the chairman of National Power has been reported as saying that the company will seek international tenders for all its coal needs as soon as it is privatised? Given that the generating contract with British Coal will end in 1993, that the increase in productivity has been massive—by the way, the Minister did not mention that—and that British pits have reserves that will last for at least another 200 years, is it not time that the Government took action not only to safeguard jobs but to safeguard the security of supply in this country?
Lord Cavendish of Furness: My Lords, the coal industry is indeed making good progress, with productivity up over 85 per cent. from pre-strike levels. Further productivity gains are essential. I believe that the industry has the investment, technology and skills to achieve them. It remains the Government's policy not to restrict coal imports. We believe that restricting them will not bring long-term security to the coal industry.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether the coal industry has explained to the Government why in many cases it is more economical for a consumer of coal to import it from many thousands of miles away in Australia or South Africa than to buy it in this country?
Lord Cavendish of Furness: My Lords, I know that there are discussions at regular intervals and I imagine that that point has been explained.
Lord Mason of Barnsley: My Lords, with regard to the future of the British coal industry, can the noble Lord tell us what steps the Government will take to restrain National Power and PowerGen from buying coal mines overseas with a view to importing increased tonnage of cheap coal? Secondly, will the Government oppose the proposal that National Power and PowerGen intend to reduce their take of British coal in 1993 from 75 million tonnes to 60 million tonnes, thereby reducing the coal industry by nearly one-third and incurring another 18,000 job losses?
Lord Cavendish of Furness: My Lords, I must apologise to the noble Lord and to the House. I was not aware of either of those proposals. The coal industry has shrunk at a consistent rate since before the First World War, as much under Labour as under Conservative administrations. I point out the very considerable help given by this Government to mineworkers and mineworkers' communities when pits have closed. That has been done through various avenues.
Lord Ezra: My Lords, does the noble Lord agree that among the measures necessary to safeguard the
550
future of coal is the need to ensure that it is burnt as environmentally acceptably as possible and that the clean coal technology can go a long way in that direction? Would he indicate the extent of the support that the Government are giving to the development of this technology?
Lord Cavendish of Furness: My Lords, in the time allowed to me I can say that we are committed to the development of coal technologies. It has not been without its problems. In the current year there has been an exceptional expenditure of £11.3 million, mainly covering the Grimethorpe project. That will return to an annual rate running at about £2.7 million. A coal task force has been set up to examine the longer-term implications. I hope that that will particularly examine collaborative effort since there are such advanced technologies in the United States and elsewhere.
Lord Peston: My Lords, can the noble Lord tell us whether he has read an article in this week's Economist —a paper which is not normally sympathetic to Her Majesty's Opposition—in which it is said that British Coal managers are fed up with the Energy Department's dithering which has made it almost impossible to draw up a long-term company strategy? Is he aware of that statement in the Economist and would he care to comment on it?
Lord Cavendish of Furness: My Lords, I do not think that the Economist is necessarily friendly to Her Majesty's Government. I have not read the argument but I shall do so and will comment.
Lord Dormand of Easington: My Lords, in view of the reply given by the noble Lord to my first supplementary question, would he say that there are no circumstances at any time in which the Government would restrict coal imports?
Lord Cavendish of Furness: My Lords, there are no plans to do so at the moment.

Business
3.19 p.m.
Lord Denham: My Lords, I should like to say a word about this afternoon's short debates standing in the names of the noble Lords, Lord Allen of Abbeydale and Lord Annan. As the mover is allowed 15 minutes and as the Minister should rise to reply not less than 20 minutes before the scheduled end of each debate, all other speeches in both short debates should be limited to a maximum of seven minutes.

Medical Injuries: No-Fault System
3.20 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale rose to call attention to the case for a no-fault system for medical injuries; and to move for Papers.
The noble Lord said: My Lords, I recall being surprised many years ago when I was asked to join the Pearson Royal Commission, which had been set up partly as a result of the thalidomide disaster, to inquire into problems of compensation for personal injury. I

551
should have been absolutely astonished if I had then been told that 18 years later I would be addressing your Lordships' House with some of the problems still unresolved.
On 1st February the other place held a Second Reading debate on Mrs. Barnes's Bill aimed at setting up a no-fault scheme for medical accidents. Today's debate is not about that Bill, defeated as it was by a government majority assembled in considerable numbers on a Friday. Your Lordships' House is discussing a wide-ranging problem of great difficulty, complexity and importance. I am grateful to all noble Lords who have put down their names to speak. Indeed, the House will have the benefit of a great deal of expertise, if not from the opening speaker.
I understand a medical injury to be the impairment of a person by a physical or mental condition arising in the course of medical care. The impairment may be a foreseeable and acceptable outcome of the necessary treatment. On the other hand, it may be the result of a medical accident, whether or not due to negligence. It is about such mishaps that I am speaking today. If at present things go wrong the patient's remedy is to sue his doctor in tort for damages. In order to win he must prove that on the balance of probabilities the doctor was negligent; that is, that he had failed to act in accordance with the practice accepted as proper by a responsible body of medical men skilled in that particular art.
That raises a number of problems. First, it is not so easy to reconcile the confrontation involved in any such proceedings with the traditional relationship between doctor and patient. The doctor is even in some difficulty in saying that he is sorry for fear of prejudicing legal proceedings. It has been common to experience difficulty in obtaining access to medical records and in finding doctors who are willing to testify against a colleague. The delays can be horrendous. When one reads of a substantial award being made seven or eight years after the event it is worth pausing to reflect on what those long years of waiting might have meant to the families involved.
Secondly, there is the aspect of cost. An individual who does not qualify for legal aid and who is not very rich will think more than once before embarking on a course which, if it fails, can impose an enormous financial burden. From the point of view of the health authority it is not easy to know the total of the sums paid under court orders or out-of-court settlements, the amounts shelled out by authorities in legal fees, and the cost in terms of legal aid, court time and administration.
Some health authorities view with alarm the size of the demands that settlements are likely to make on their resources. The rising insurance premiums payable by doctors for work outside the NHS, as is now the arrangement, are quite a story on their own. There is reason for thinking that some extra expense is caused by defensive medicine; that is, action taken in case there might be legal proceedings and allegations made that not all precautions were taken.
552
It is difficult to obtain hard facts but I hope that we shall hear expert opinion on the matter as the debate proceeds.
It is sometimes argued that proceedings in court achieve the purpose of rubbing in doctors' accountability. But the worst cases are settled out of court. Those disputed in court tend to be the more marginal cases in which there is a reasonable defence.
The final item in this gloomy catalogue is the provision in the Law Reform (Personal Injuries) Act 1948 which states that in awarding costs the courts are obliged to ignore the availability of service under the NHS and assume that any medical treatment is private. In the recent debate even the Secretary of State for Health conceded that that was not very satisfactory. Indeed, it would be difficult to find anyone who believes that the present arrangements are totally acceptable although not necessarily going so far as to utter the widely-held view that it is all a rather elaborate lottery in which a few large prizes are awarded after a wait of several years.
It is only fair to say that some improvements are on the way, including the welcome changes flowing from the Civil Justice Review and the Courts and Legal Services Act. Soon new legislation will help with access to hand-written medical records. I understand that the discussions that the noble and learned Lord the Lord Chancellor is having with the Law Commission—to which the Minister recently referred at Question Time—cover the possibility of looking at structured payments all these years after the Pearson Report.
The Health Minister has talked of discussing the problems of defensive medicine with the presidents of the royal colleges. In the recent debate in the other place he did not reject a suggestion previously made by my noble and learned friend Lord Griffiths that some kind of arbitration procedure—that is, a tribunal of two doctors and a legal chairman and conducted on paper—might be made available as an alternative to court proceedings.
All of that still assumes that negligence must be proved. In the debate the Secretary of State did not say that the approach to negligence cases suggested by my noble and learned friend Lord Griffiths was, in his view, only second best and that his preferred course was a no-fault scheme. Other eminent lawyers have come out in favour of such a scheme. So have representative bodies of doctors, obstetricians, gynaecologists—who, incidentally, have their own problems of recruitment—midwives, nurses and consumer organisations. Although there is no unanimity of view about the type of no-fault scheme that should be adopted and how, for example, accountability should be handled, the fact that there is such widespread support for the principle among so many responsible people and organisations suggests that the concept cannot be lightly brushed aside.
After all, "no-fault" is not a novelty in this country, although anyone reading the Commons debate would never guess that. Pearson pointed out that compensation for industrial injuries is, in essence, a no-fault

553
scheme. So are the arrangements for volunteers taking part in clinical trials. So was the Vaccine Damage Payments Act 1979. Even now the Lord Chancellor has a working party examining the possibility of a no-fault scheme for minor road traffic accidents. The difference between the award to haemophiliacs and no-fault payments is scarcely visible to the naked eye.
I say straightaway that the Pearson Commission did not include medical accidents among the categories where it believed that "no-fault" should be introduced at that stage. The report kept the issue open and recommended that the Government should watch how the schemes in Sweden and New Zealand (Finland should now be added) worked out in practice. The main reason why the commission came up with its rather wet conclusion—I believe that this chapter is the worst in the report—was that it could not see how to surmount the problem of causation. It believed that it would be as well to see how those other countries overcame the problem.
There can be unlooked for complications after an operation or as a result of the use of drugs. It can be difficult to decide whether such a mishap was indeed foreseeable and acceptable or whether it was an accident in the sense that I have explained. There has been the rather strange history of vaccine damage. Another perplexing example could be deciding whether cerebral palsy was caused at birth or whether it was congenital. It is easy enough to point to the problems and to forecast anomalies, although the argument about anomalies is very dangerous for any defender of the present system to use. Many believe that it would be wrong to abandon the whole concept because in what would after all be a minority of cases, there could be problems on the issue of causation—an issue on which the Scandinavian schemes managed to form judgments.
No one suggests that the right to go to court with claims based on negligence should be abandoned. However, there is much support for the idea of providing in addition an option to go to a tribunal where it would be necessary to prove causation and to show that the outcome was an accident in that it was not foreseeable and acceptable. However, it would not be necessary to prove negligence. Hurdles could be erected to keep out trivial cases and there could be restrictions on the awards. If, as a consequence, awards were not quite as glittering as some court awards, they might be more plentiful and could be given more speedily. It can be argued with some conviction that the overall net cost need not be forbiddingly large.
A tribunal could be on the lines of that suggested by the noble and learned Lord, Lord Griffiths, for negligence cases or on more elaborate lines as proposed in the Bill of Mrs. Barnes. She drew heavily on the precedent of the Criminal Injuries Compensation Board. In the debate the Health Minister kept arguing that that was not much of an analogy since the board dealt only in small awards of £2,000 to £3,000. He said that several times. In fact —I have sent a note to the Secretary of State—it assesses cases on the basis of common law damages
554
subject to a limit on the allowance of earnings and the full deduction of social security payments. Last year it made one award of £768,512 and another of £834,703.
For my part I do not claim to know the answer to some of the problems and today I do not put forward any hard and fast scheme. Indeed, in the time available it is possible to touch on only some of the issues. For example, I can do no more than mention one possible further complication; that is, a draft. EC directive seeking to reverse the burden of proof where there is an allegation of fault against the supplier of a service. However, this is not a subject that will simply go away. I ask the Government to take seriously the widely held anxieties and to put in hand, by whatever committee of inquiry seems to them best, although not one limited to lawyers or doctors, a detailed investigation into the pros and cons and the possibility of arriving at a solution for the problems which we all know exist and which cause widespread confusion and disap-pointment to doctors and patients alike. My Lords, I beg to move for Papers.
3.35 p.m.
Lord Campbell of Alloway: My Lords, it is always a privilege to follow the noble Lord, Lord Allen of Abbeydale, who today has rendered a signal service not only to your Lordships' House but also to the country. The noble Lord proposes the introduction of a new dimension of social justice—no more and no less. He takes a non-political stance, although political decisions would be required to carry into effect his proposals, whatever their form. However, as the noble Lord says, the problem will never go away.
This is as an option to litigation for medical negligence in the courts of our country. Under the noble Lord's broad proposals, compensation may be awarded only if the medical treatment or advice caused the injury. The measure of compensation will be established on accepted common law principles, albeit with some discount as negligence is not in issue. The scheme covers only medical situations and is strictly limited in that regard. It is not concerned with product liability and makes no changes whatever to substantive law. It bears scant resemblance, if any, to the National Health Service (Compensation) Bill which failed to have a Second Reading in another place earlier this month. I could never have supported that Bill for many reasons given in another place.
If the serious attention of Parliament is to be attracted to reforms, it is of no avail whatever to hoist a no-fault flag and beat the NHS drum. The problem is complex and difficult as the noble Lord, Lord Allen, acknowledged. One can but rely upon the gentle art of persuasion and offer proposed means of implementation for the critical examination of, and objective discussion by, your Lordships.
To that end, this tentative contribution, as indeed it must be having regard to the distinguished list of speakers who are to follow, is arranged under four headings. I shall probably not have time to deal with the last of them in the seven minutes available. The first is the justification for reform; the second is the

555
means of operation; the third is causation; and the fourth is the relationship between the scheme and the courts.
As to the grounds of justification, the legal complexities of a medical negligence action inhibit any reasonable prospect of obtaining compensation by the vast majority of those who have suffered from such injury. A barrier exists which precludes success or argument as to the state of the medical art. If the treatment or advice was given in accordance with—and I underline this—any respectable body of medical opinion, that can kill it, as can the contention of those who gave the treatment that the drug or product used in the treatment which caused the injury was used without negligence.
The second ground of justification is the fear of a medical negligence action which has led to defensive medicine; namely, reluctance to take the sensible and appropriate risks to the detriment of the patient; and the resort to over elaborate precautionary methods to avoid that risk at the cost of NHS and private patients. Thirdly, the heavy cost, the uncertainty, and the delays of two to five years involved in these High Court actions, usually supported by legal aid, are totally unacceptable. Fourthly, there is the mounting burden of professional insurance premiums which add assuredly in the USA and in this country, one-third to the cost of medical treatment. The cost of the provision of those medical services is increased either to private patients or to the NHS to that extent. That is wholly unacceptable.
Lastly, the sense of overweaning injustice and frustration on the part of those injured by medical treatment must be recognised by any government of this country sooner or later. Something has to be done. The question is what.
I have spoken for my seven minutes. There is no more that I can usefully say to your Lordships.
3.41 p.m.
Lord Pitt of Hampstead: My Lords, I should like to thank the noble Lord, Lord Allen of Abbeydale, for giving us the opportunity to discuss this important subject.
The present tort-based system of compensation for the victims of medical injury is harmful, unpredictable and unjust. Similar needs receive dissimilar treatment. A no-fault compensation scheme would relieve the patient of the necessity of lengthy and expensive legal cases, and base compensation principally upon the injured person's needs.
The emphasis of such a scheme should be on reimbursement of identifiable financial loss or of expenses as a result of a medical mishap, together with reasonable recognition of unnecessary pain and suffering. Instead of those few individuals who are able to establish that the care they had received had been negligent being awarded very large sums of compensation, a no-fault compensation scheme would offer a choice to the individual.
Patients suffering unforeseen injury during their medical care would be compensated reasonably for a
556
damage that they have endured and, where appropriate, dependants compensated for financial loss. It is important to remember that there are a large number of medical accidents where nobody is at fault. The current legal system is slow and expensive, with average delays of four years and some of seven years. In the case of children damaged at birth 20 years is the time allowed for the legal process to begin.
For those patients not eligible for legal aid, the risk of serious financial damage if the action is unsuccessful compels them to abandon all hope of compensation and not to proceed with the claim. Even if they proceed, the amount is a lottery. Even when the case is proven and damages awarded, a high proportion of the damages will be absorbed by legal costs.
The present system destroys the proper relationship between the doctor and the patient by introducing a confrontational element. That encourages conceal-ment and lack of frankness on the part of the doctor, just when it is most undesirable. It is the sincere hope of the medical profession that whatever other benefits might result from a no-fault scheme, the absence of the threat of litigation would ensure much greater openness in explaining to the patient the nature and cause of any mishap, encouraging accountability by the doctors to the patients who are, after all, the people most entitled to require it.
I would not wish such a scheme to protect professional staff if errors have been made. Those patients wishing to prove professional negligence should always have the route through the courts open to them. The present fault-based system does not give accountability. The greater the degree of incompetence or plain negligence, the more certain it is that the case will be settled out of court, saving the doctor from any adverse publicity.
As the health authorities pay the indemnity for hospital doctors, an individual working in an NHS hospital suffers no financial penalty in either legal costs or damages. The medical profession takes that very seriously and is involved with considering how best to deal more effectively with incompetent doctors. The BMA has worked with the Government to introduce compulsory medical audit and the General Medical Council is actively looking at the issue and considering new disciplinary measures.
I am glad that the noble Lord, Lord Allen, referred to the new directive of the European Commission. I shall be interested to hear the Minister's views. However, the proposals do not seem to resolve the delay, expense, uncertainty and disruption caused by a fault-based compensation scheme. I hope that the Government will listen to the professional organisations and the consumers, and will consider seriously the proposals put forward for a no-fault compensation scheme.
3.48 p.m.
Lord Walton of Detchant: My Lords, I too wish to congratulate the noble Lord, Lord Allen of Abbeydale, on his initiative in arranging for us to debate this issue, which I believe requires urgent attention.
I accept many of the arguments advanced by the Secretary of State in recommending that the Private Member's Bill recently introduced in another place should be opposed. Nevertheless the problem is one which cannot, and must not, be brushed aside. Since the report of the Pearson Royal Commission in March 1978, the position relating to claims alleging damage through medical acts or omissions has become increasingly serious.
I commend to your Lordships four important documents. The British Medical Association and the Royal College of Physicians have each produced cogent reports recommending the introduction of a no-fault compensation system. The Royal Society of Medicine hosted a conference in 1989 and the proceedings of that meeting, organised jointly with the BMA, were published. A copy of that comprehensive book is now in the House Library.
Perhaps I may also commend a research note entitled Compensation for Medical Accidents—is 'no-fault' a better way?, published by the House of Commons Library Research Division under the authorship of Keith Cunninghame and Helena Jeffs in January of this year.
In the UK, claims under common law alleging medical negligence are still guided by the judgment of Mr. Justice McNair in the case of Bolam v. Friern Hospital Management Committee in 1957 in which he said, as the noble Lord, Lord Allen, pointed out,
"A doctor … is not guilty of negligence if he has acted in accordance with the practice accepted as proper by a responsible body of medical men skilled in that particular art"
Medical negligence is part of the wider tort of negligence. But the present operation of the system is exceptionally slow, expensive and depressing to both sides and does not always operate fairly. Some have suggested that the existing system assures medical accountability. That is clearly not the case. Most cases in which negligence has plainly occurred are now settled out of court and are not followed by action which would be likely to influence the practice of the offending doctor. Admittedly, as the noble Lord, Lord Pitt, pointed out, the GMC is now discussing whether to introduce a system of performance review followed by remedial action in the case of doctors whose standards of practice have fallen below an acceptable level. But that action is no part of the present legal system, although it could be facilitated under a no-fault compensation scheme.
There are many cases where damage, including irreversible brain damage, has occurred through medical accidents where no question of negligence arises and in which there is therefore no prospect of compensation. As has been pointed out, it is also important to note that many actions in which negligence is alleged, now pursued in the civil courts,
558
are legally aided; and many injured individuals whose income exceeds the threshold allowed under the legal aid system are deterred from pursuing claims for financial reasons.
In Britain the claims received by the medical defence organisations, which until recently insured all doctors, doubled between 1984 and 1987. Until Crown indemnity for doctors working in the NHS was introduced, annual subscriptions to those organisations rose from £40 per annum in 1978 to £1,350 in 1989. A specific area of concern relates to accidents at birth and suits against obstetricians. Those have been facilitated by a change in the legal aid rules which mean that a child can now obtain legal aid on the basis of its own income and not that of its parents. Recently Sir Donald Acheson estimated that, whereas the number of such cases grew from 50 in 1983 to 200 in 1989, the figure is now likely to rise to around 600 a year, many resulting in large settlements which, under Crown indemnity, will fall to be paid by NHS health authorities with a consequential reduction in the income which can be devoted to patient services.
A side effect of that problem has been a fall in the recruitment of young doctors into obstetrics and gynaecology. Some feel that the Bolam principle may have been stretched to the limit in dealing with some such claims, not surprisingly perhaps in the light of the tragic consequences of perinatal brain injury. Fortunately we have not yet reached the appalling situation which at present exists in many parts of the United States of America where defensive medicine has become the rule. So-called malpractice insurance there costs many doctors in surgical and obstetric specialities in excess of 50,000 dollars a year and, because of the danger of malpractice claims, many refuse to carry out certain procedures which, though usually beneficial, carry a significant risk. Fortunately we have not yet reached the situation here which exists in America where a doctor may drive around with a sticker on his car saying,
"Support a lawyer—send your son to medical school".
The Royal College of Physicians and the BMA suggested that to institute a system of no-fault compensation would relieve the patient of the necessity of proving fault and would base compensation principally upon the injured person's needs. They believe that it would lead to the rapid resolution of claims much more than under the present tort-based procedures. As was pointed out, the present situation tends to destroy the doctor/patient relationship. A no-fault system would have the advantage of making compensation available to those individuals suffering damage as a result of totally unpredictable medical accidents.
The Government have already made ex gratia payments for no-fault compensation in the case of infants suffering brain damage through vaccination against whooping cough, and more recently in the case of those unfortunate individuals developing AIDS through the use of factor 8 concentrate in the treatment of haemophilia. Reference was made to the

559
EC draft directive which, if introduced, would compensate for defective services; the plaintiff would then be relieved of the obligations to prove negligence.
As others have said, I believe that the Government should now establish a high level committee with appropriate medical, legal and lay representation to examine the present system and its major deficiencies and to make recommendations.
3.55 p.m.
Lord McColl of Dulwich: My Lords, the increase in medical litigation in this country has led to the fear that we may be heading towards the unfortunate American legal system. However, it should be pointed out that the American legal system is quite different in having contingency fees, which allow lawyers to make no charge if they lose the case but to take as much as half the award if they win. I believe that that system was invented by the British around 300 years ago. About 100 years later they saw the error of their ways and outlawed the practice. However, before the reform could be effected, the American colonies had gone off on their own and found themselves lumbered with the contingency fee system from which they are unable to escape. The danger of this country following the American legal road is remote.
It has also been argued that if the present increase in litigation continues doctors will practice defensive medicine. My impression is that there was more defensive medicine in the 1950s than exists today. As students we were taught that we had to X-ray a patient's head if there was any question of that patient having suffered a head injury, as there had been a judgment in the early 1950s which gave rise to the impression that it was negligent not to have an X-ray under those circumstances but not negligent to miss a fracture even if it was clearly visible on the X-ray. As a result of that curious state of affairs, millions of skull X-rays were taken quite unnecessarily. In the past few years that practice has been discontinued. In one's teaching of medical students today one concentrates on the importance of practising good medicine with courtesy, openness, effective communication and believing in the old adage that the customer is always right.
There are many disadvantages in having a no-fault system. First, it will lead to more hassle for all concerned. In addition, after the compensation has been agreed the patient will be free to sue in the courts. Secondly, it will exclude equally handicapped children who are born with some congenital defect. Thirdly, it is illogical to have such a compensation scheme in medicine and not in other walks of life. However, there is one place where such a no-fault compensation scheme might be appropriate, and that is in regard to injuries resulting from road traffic accidents where it is notoriously difficult to assess who is to blame. Fourthly, separating negligence from the scene would still leave the patient with the difficulty of establishing causation, and establishing causation may be just as difficult as establishing negligence. Fifthly, it would create yet another layer of suffocating bureaucracy with which we could well do without.
560
We should try to improve the present position. A large number of medical negligence cases are preventable. The wrong part is still being removed. X-rays are being labelled right and left the wrong way round. These are all preventable lesions. Every operation site should be marked with an indelible pen with the name of the operation. That practice has never given rise to any problem except on one occasion where the surgeon expected to carry out a hernia operation. Unfortunately the patient had had tattooed across his neck a dotted line with the words, "Cut here". Happily, he recognised that the handwriting was different!
Some believe that giving too much explanation of what may go wrong before an operation may put the patient off. However, nowadays we regard that as too patronising. We have to be much more open and put the patient completely in the picture. The delays in the legal world have been unduly prolonged and ways are being found to speed that up. Making access to medical records easier has been an important contribution in this field. It would be easier still if patients were allowed to keep their own records.
Lastly, serious consideration might be given, where appropriate, to making yearly payments in negligence cases instead of a huge lump sum. I understand that during the past 10 to 15 years the courts have been able to make an interim award, with a review some time later where the prognosis is in doubt. It might be useful to extend that practice to inflation-proof yearly payments. As usual, I am grateful to the noble Lord, Lord Allen of Abbeydale, for initiating this debate. I am sure that it is shedding more light on this vexed problem. But I fear that a no-fault system for medical injuries would make matters worse than they are at present.
Lord Campbell of Alloway: My Lords, before the noble Lord sits down and for the sake of clarification, perhaps I may ask him whether he accepts that the scheme proposed by the noble Lord, Lord Allen of Abbeydale, would not allow for two bites at the cherry, so to speak? One has to elect whether to operate under the scheme proposed or under the courts. Again, in order to save confusion and a waste of time in this debate, will my noble friend accept that the principles of causation will be those which operate in the courts at present? They would present no difficulties. Does he also accept that the only excision of complexity would be the problem of establishing negligence? I ask those questions to avoid confusion.
Lord McColl of Dulwich: My Lords, if things were that simple there would not be the problem that we have today.
4.2 p.m.
Lord Irvine of Lairg: My Lords, when the other place debated Mrs. Barnes's Bill, the debate concentrated on her specific proposals. While vigorously opposing her Bill, the Secretary of State acknowledged that few people in the debate had:
"been willing to say that the operation of the law is satisfactory in respect of medical negligence cases and the definition of who is responsible for what at present".
He added:

561
"I count myself among that consensus"—[Official Report, Commons, 1/2/91; col. 1260.]
Later he said that he agreed:
"that, in many respects, the present arrangements are perceived as unfair. There is a basic perception that such compensation claims are a lottery".—[col. 1261.]
He avoided saying what the Government proposed doing about it, and contented himself with attacking Mrs. Barnes's Bill and with a disquisition on how he claimed that court proceedings are being streamlined and speeded up.
The basic question is one of principle; it is nothing to do with court procedures. It is whether a patient whose medical treatment goes badly wrong should have to prove that the doctors were negligent in order to recover any compensation. The courts have made it extremely difficult for patients to win against doctors. I do not need to align myself with the cynic's view that here we have one profession, the lawyers, or, more accurately, the judges, laying down the law in order to protect the medical profession. It is sufficient to say that the case for a system of no-fault compensation is the greater if the law is in fact so weighted in favour of the medical profession that very few victims of medical injury can recover when things have gone badly wrong. The vast majority who suffer medical injury go uncompensated. The proportion of successful claims is far and away lower than for all negligence cases.
The courts allow the medical profession to set its own standard of care. They decline to choose between rival bodies of medical opinion. A doctor is not negligent, as has been said, if he is acting in accordance with a practice accepted as proper by a responsible body of medical opinion, even if another body of medical opinion takes precisely the opposite view. The courts have given many reasons for declining to lay down a higher standard of care; that it would increase the likelihood of litigation and so destroy the trust which is the basis of the relationship between doctor and patient; that it would lead to practitioners avoiding taking risks that may be necessary for the patient's benefit; that it could lead to doctors refusing to treat patients; that it could create a disincentive to innovate; that it could increase litigation and so increase the cost of the provision of medical services; that it could lead to fewer people entering the profession; and that it would be unnecessary anyway because of the high professional standards current among medical practitioners.
Your Lordships may assess the judicial approach from two short quotations from two of the judgments of the Court of Appeal in a leading case in 1980. The first judgment states:
"If medical men are to be found liable whenever they do not effect a cure, or whenever anything untoward happens, it would do a great disservice to the profession itself, Not only to the profession but to society at large, Take heed of what has happened in the United States. Medical malpractice cases there are very worrying, especially as they are tried by juries who have sympathy for the patient and none for the doctor who is insured. The damages are colossal. The doctors insure, but the premiums become very high and these have to be passed on in fees to the patients. Experienced practitioners are known to have refused patients for fear of being accused of negligence. Young men"—
there is no mention of young women—
562
"are even deterred from entering the profession because of the risks involved. In the interests of all, we must avoid such consequences in England".
The second judgment held that a higher standard of proof should apply than in other civil cases because of the gravity of a negligence allegation against a professional man. The judgment says:
"The Defendant's professional reputation is under attack. A finding of negligence against him may jeopardise his career and cause him substantial financial loss over many years … the public interest is put at risk".
A similar solicitude for the medical profession runs through the decision of the courts on the need for the patient's consent to surgical procedures. In the United States the prevailing doctrine is that consent must be an informed consent. I emphasise "informed". Every adult of sound mind has a right to determine what is to be done with his own body. True consent to what happens to oneself requires an informed exercise of choice. That in turn requires the doctor to inform the patient of the options, and the risks accompanying each option.
That doctrine is rejected here. If English jurisprudence has a doctrine it is that the "doctor knows best". The same principle as applies to diagnosis and treatment applies to warning the patient of risks inherent in treatment that the doctor recommends. The doctor need give no more information than would accord with the practice accepted as proper by a responsible body of medical opinion.
What this comes down to is that the judiciary allows the medical profession to set the standards by which the medical profession is to be judged. The Secretary of State has himself acknowledged that the existing state of the law is unsatisfactory, He was adamant that Mrs. Barnes's Bill was not the way forward. This debate gives the Government the opportunity to inform your Lordships' House what the Government believe is the way forward.
The Government responded to the haemophiliacs cause because of public pressure on behalf of a sympathetic case. But all cases where medical treatment goes badly wrong are sympathetic cases. The Government were playing politics by responding to a popular case. They were not addressing principle. I hope the noble Baroness, Lady Hooper, will address principle when she replies to this debate and that that will be the reward which the noble Lord, Lord Allen of Abbeydale, deserves for bringing this important subject before the house.
4.11 p.m.
Lord Richardson: My Lords, I am grateful to the noble Lord, Lord Allen of Abbeydale, not only in a general sense for introducing this debate but particularly because he referred to, but did not expand on, the subject of defensive medicine. It is difficult to attack the idea that is held in the minds of some that defensive medicine is inevitable and that it is widely spread. I do not wish to suggest that for a moment. I do not think there is any firm evidence to suggest it, but the possibility is extremely clear. If I give one or two examples perhaps I may be able to convince the House.

563
The expenditure of time that is so important in all medical matters—time representing money in a big way as well as goodwill—is very great. The noble Lord, Lord McColl, referred to X-rays. Unnecessary defensive X-rays cost the patient's time. They cost many people's time. They cost perhaps a surplus amount of irradiation for the patient. It takes time to visit the laboratories to have tests done which may have to be repeated and confirmed. Again, time for all concerned. The keeping of extensive and carefully edited notes so that they can stand up to critical scrutiny rather than serve as a help to the doctor or his colleagues on referral; that takes time. Referral itself takes up a very great deal of time. There is therefore the possibility that in defensive medicine one will in the future see patients' essential needs being treated, with the doctor looking over his shoulder to some extent rather than looking straight at the patient's face.
There is already an alarming situation that could be called evasive medicine rather than defensive medicine. It was referred to by the noble Lord, Lord Allen of Abbeydale, who mentioned obstetricians. The president of the Royal College of Obstetricians and Gynaecologists, Mr. Stanley Simmons, is a man of enormous professional experience and expertise. Furthermore, he is a man who has been concerned with medical matters at national level for many years. He is a man of strong and tough mind. He is deeply concerned about the future of his particular branch of the medical profession. He tells me—and this has already been referred to—that not only is recruitment diminishing but, disturbingly, early retirement is developing among those engaged in obstetric practice. His college has been foremost in developing medical audit. It is going forward well at the present time. Having applied those principles to examining the performance of its own fellows and members, he can declare that standards have never been higher, that they are ever ascending and that, as they ascend, the number of complaints and the number of cases involving action for compensation has increased. It seems therefore that those concerned are in a trap and they are beginning to think of opting out of it.
Perhaps an illustration might relieve the anxiety that some people are feeling. The Chief Medical Officer, Sir Donald Acheson, gave an eponymous lecture at the Royal College of Obstetricians and Gynaecologists. His subject was "Is the specialty doomed?". If the answer is yes, how would those young spouses feel; how would parents feel; how would grandparents feel? Looking around this House, I cannot believe that any except myself are great-grandparents. Nevertheless, how would great-grandparents feel? The answer must be that that specialty will continue to endure and will be supported by every effort to reap the fruits of its own expertise, which is ever increasing for the benefit of all and which we in this House hold to be so very important.
4.17 p.m.
Lord Airedale: My Lords, the noble Lord, Lord Allen of Abbeydale, confined his Motion to medical injuries just in the same way as, not very long ago, the noble Lord had a Motion in similar terms, but confined it to road accident injuries. It may be that the noble Lord in his wisdom considers that one's chances of success are greater if one does not try to get everything all at once. However, the problem about proceeding with any matter piecemeal is that, if one succeeds, at the moment of success one creates anomalies. I hope that the noble Lord does succeed and that the anomalies will be pointed out. I hope that people will shout from the house tops, "What about the unfortunate people whose injuries were not medical injuries? Why do they not get the special compensation that is promised for the victims of medical injury?". I am bound to say that I should like to see compensation for these injuries becoming a first charge upon the welfare state. It is a good Christian principle that we should attempt to share one another's misfortunes.
In and after World War II we had, as many noble Lords will remember, the war damage compensation scheme. If one's property was destroyed or damaged one had a claim upon the public purse for compensation. Surely physical injury is more important than damage to property! I should like to think that what can be done in respect of damage to property in war time can surely be done in a wealthy nation in respect of personal injury in peace time. I am not suggesting any more than the noble Lord, Lord Allen, that the law of tort should cease to apply in these personal injury cases. Where there is fault of course let the case be fought. Let the Secretary of State be standing behind the litigant in the same way as at present the insurance company stands behind the litigant. Any damages recoverable could be paid by the Secretary of State into the National Insurance Fund and thereby reduce the charge upon the public purse for making good all the compensations.
Numerous problems arise in regard to the question of compensation itself, the amount, its calculation and the method of payment. I should like to draw to the attention of the House the case of Kelly v. Dawes which was tried in July 1989 in the Queen's Bench Division. The learned judge, Mr. Justice Potter, went into the difficult question of compensation and set out all the problems and the means of overcoming them. I had hoped to go into this question in some detail, but just as Cecil Rhodes said on a famous occasion, "So much to do but so little time", I have to say, "So much to say but so little time". I refer your Lordships to Mr. Justice Potter who said it all much better than I could have myself.
4.22 p.m.
Lord Hunter of Newington: My Lords, I should like to add my thanks to the noble Lord, Lord Allen of Abbeydale, for introducing a vitally important debate. We are all looking forward to hearing what the Minister has to say.

565
As has been said, in the United States it seems that the image of the dedicated and hard-working physician toiling long hours for the good of his patients has been replaced by hardened attitudes of patients, many of whom have had less than optimal interactions with their physicians and unrealistic expectations of what modern medicine can accomplish. Physicians are also keenly aware that their patients often fail to recognise that the average physician in the United States still works 2,500 to 3,500 hours per year, much of it stressful, rather than the standard 40 hours a week which amounts to 2,000 hours per year. Is something of the same happening here?
The Motion mentions medical injuries, but there are two legal aspects of this. One is failure to treat or negligent treatment and the other is failure to warn. Because of the difficulties which I shall mention, many people are of the considered view that there should be a no-fault system for medical injuries. We have heard eloquent arguments in that regard. There are many reasons for this, ranging from failure to warn to failure of treatment. As I have indicated, other factors contribute to the disaffection of physicians and patients. An important one is the demands for documentation and justification of expenditure, which is very clearly indicated in the new medical contract. It is a substantial burden. Another is the increase in professional liability insurance. These must be taken together with the changing status of the physician and the confusing picture of the law.
I should like to confine my remarks to considering in more detail the failure to warn patients. The recent decision of Lord Caplan in Moyes v. Lothian Health Board is one of the few "failure to warn" cases reported in this country. The patient, Mrs. Moyes, suffered pain down the left side of her face and it was feared that she might have vascular disease. She had the diagnostic procedure known as an angiogram carried out and she suffered a stroke. Mrs. Moyes sued the Lothian Health Board on the basis that it was vicariously liable for the negligence of its employee doctors. The substance of her action was that the doctors had failed to warn her of the risks of stroke inherent in this procedure.
The decision of the House of Lords in the Sidaway case in 1985 as to the extent of a doctor's legal duty to warn a patient of risks inherent in a medical procedure is confusing and no clear rule emerged from a deeply divided court. Lord Caplan stated that Sidaway had not changed the law so that the duty of a doctor in "warning" cases was to be determined on the basis of expert evidence of professional practice, as stated in the well known case of Bolam. Lord Caplan subsequently accepted this proposition. He reconciled the different approaches by stating that,
"where the skill or knowledge, or specialist experience of the doctor is a material factor, standards will be regulated by the standards of responsible members of the profession".
He added that the court should not take too narrow a view of the,
"ambit of medical expertise—the doctor's skill in handling his patient may be as much a product of his clinical experience as diagnosis or the prescription of medicine".
566
Only if the doctor has failed to take "reasonable care for the safety of his patient" will professional practice not be determinative, as, for example, where a doctor fails to warn of a "decidedly substantial risk" so that "the patient's safety is obviously imperilled".
On the facts in the Moyes case, the very small risk of stroke would not have satisfied this and so it would not have been negligent of the medical profession to fail to warn Mrs. Moyes. I am advised that confusion reigns—we have heard much of it tonight—and that there are controversial legal views, to some of which I have referred, which the Law Lords might some time address. Perhaps I may say that I am grateful to the Centre of Medical Law and Ethics at King's College for some of the information contained in my speech.
Perhaps I may summarise the reasons why there should be a no-fault system of medical injuries and accidents and failure to warn. The law is confused. The experience in America of litigation is frightening in the extreme. Professional liability insurance is increasing rapidly. Such a situation can only tend to contribute to the patient/doctor conflict, and yet there is no doubt that patients should be compensated for accidents, including failure to inform if this can be accurately found.
4.28 p.m.
Baroness Oppenheim-Barnes: My Lords, I should like to thank the noble Lord, Lord Allen, for initiating this debate. I follow the noble Lord, Lord Hunter, with humility. I bring neither legal nor medical expertise to this debate but deep feelings and some personal experience. I do not believe that I have heard a single noble Lord defending in an unqualified way the status quo. I do not believe that it is possible for anyone in this country who has suffered a medical injury less than death or the life of vegetable to be sure of succeeding in a case of medical injury.
One of my daughters was a patient who received such an injury. She practically lost her life. She spent three months in hospital, in great pain, and suffered a number of operations. Neither my late husband nor myself were without influence—I was at the time a Member of another place—nor without resources to pursue the case. However, in the end it proved impossible for us to do so. My daughter did not particularly want to pursue the case because she did not feel that the financial aspects were important. My late husband was anxious to pursue it because he felt that in airing the case it would prevent the same error being made again. I shall return to that point in a moment.
In the event we were unable to pursue the case because the brilliant consultants who helped to save my daughter's life were reluctant to come to court to give evidence against their colleagues—and who wants to pursue a case in which the witnesses are reluctant?
In my constituency experience as a Member of Parliament for Gloucester, your Lordships can imagine the hopelessness with which I approached the task of trying to help my constituents with similar experiences. One of them certainly suffered for the rest

567
of her life, disabled and in pain as a result of the maladministration of an epidural anaesthetic, and she got no recompense whatsoever.
Having said that, I should not want to see no-fault compensation put forward as a remedy for what is an intolerable situation. I would be fearful of the American experience. I do not think that it would help those patients who are unable to pursue their cases successfully today simply to fatten the bank accounts of insurance companies and lawyers and to pass on to the health service vast costs even where the cases are legitimate ones. Those vast sums of money would deprive other patients in the long term of treatment they have every right to expect as resources are not unlimited.
Therefore I hope and pray that a middle course can be found. Certainly the present situation is intolerable. I hope and pray that wiser heads than mine can come together to find such a way so that those who have suffered physically are not, on top of that, made to suffer delay, anxiety and, in the end, despair.
4.32 p.m.
Lord Wilberforce: My Lords, I put down my name to speak in this very important debate because it seemed to me that there should be some voice, however weak, from those who occupy the judicial Benches in your Lordships' House. In saying that I certainly do not profess to represent the legal establishment and I am quite certain that my noble and learned friends, by my side or elsewhere, will not agree with everything I shall say. Nevertheless, there is a contribution which one can make.
The basis for a modern approach to this subject, I suggest, starts from the remarkable statement made by Mr. Justice Ognall in the haemophiliac case. That case, your Lordships will remember, concerned actions brought by many hundreds of people based on negligence which, on every ground of merit and humanity, seemed extremely strong. Nevertheless, the learned judge at the beginning of the trial felt it necessary and right to warn the parties and their legal advisers that in so far as their case was based on negligence it was exposed to very considerable difficulties.
We know what happened. The Government dealt with the matter on another basis and paid compensation. It has been said that that was a political decision; I do not believe that to be so at all. I believe the Government paid the money because they recognised that negligence was not the right basis on which to deal with this sort of case. A wider basis—what, for the moment, I shall call the humanitarian basis—is the right one.
It was said that the haemophiliac case was unique. So it was. Every terrible case of medical misfortune is unique. But there will undoubtedly be other cases of the same kind. A case in India involving what was called a medical mishap resulted in a very severe ophthalmic infection leading to blindness from which a number of people suffered. The case went to the
568
supreme court of India—a legal body, I would remind your Lordships—which said that the sufferers should be compensated fully on humanitarian grounds.
One is able to see the difference between that approach and one based on negligence if one considers the argument we have heard today. It is said that if we open the door now to "no-fault" in medical cases we would have to do it all over the field. That is welcome to the noble Lord, Lord Airedale, but not very welcome to the noble Lord, Lord McColl. I saw the noble Baroness nodding with approval when the noble Lord, Lord Airedale, was putting his arguments. That seems to indicate that the Government are taking the line, as they have before, that to open the door is to open the floodgates, with the consequent need to act all over the field. It is important to say that there is a very wide gulf in principle between medical cases, and possibly others with which we are not concerned today, and fault cases, based on negligence. That is the distinction between private law and public law.
Private law deals with a system which enables individuals who have suffered from a breach of duty on the part of other individuals to sue those latter individuals and recover damages. That is the private law system which governs road accidents and many other cases based on fault which lead to actions in negligence. Public law is a totally different matter. It arises where the state or a public body is entrusted by Parliament with the duty to carry out certain duties and fails to do so or does so imperfectly. That failure gives rise to a range of special remedies: judicial review, injunctions, compensation and, in some cases possibly, although it is a doubtful area, to damages.
It is vital to recognise that the National Health Service has clearly and completely passed into the public law area. The state has assumed responsibility for providing to everybody who asks for it, and free, a system of prevention and cure. There is no contract between the patient and the National Health Service: it is a system provided by the state. Therefore one has to ask whether it is right or appropriate in any way that claims in relation to failure to fulfil administrative duties should be based only on negligence. Mr. Justice Ognall—I should like to quote much more but there is not time—said:
"A government which takes upon itself the role of public provider of medical advice and clinical services is in a very different position from any commercial organisation. It is clearly arguable that its duty to innocent citizens who suffer injury under the aegis of such treatment has a moral dimension to it which should distinguish its assessment of its position from the criteria to be adopted by other defendants of a corporate character".
I believe that to be a perfectly sound principle and the principle upon which the Government acted quite rightly in the haemophiliac cases. It is one which has been recognised in other cases—the vaccine cases, which have been given as an example, and others. It is a question of putting right what has gone wrong. In other words, compensation is part of the service provided, part of the national service of putting right what has gone wrong. And the cost of doing so is part of the cost of the service. I respectfully suggest to your Lordships that far from negligence being the right way

569
to deal with these cases, it is the wrong way. I am not dealing with whether or not it may be invoked in addition. However, the proper and best way of dealing with these cases is by recognising moral, administrative and humanitarian obligations on the part of the state to compensate for what has gone wrong.
If the test is not to be negligence, it must be a case of putting right a medical mishap in the best way possible. Something has gone wrong which should not have gone wrong and has caused the injury of which the person complains. It should not be past the wit of man, in this House or outside, to devise a formula to meet that case. The Swedish scheme —and perhaps the noble Baroness will be speaking about it that in due ccurse—does that; perhaps too severely. But it does so, and I believe that the Finnish scheme does so too. Surely in this day and age we should now be putting our hands to that instead of embarking on and arguments about negligence, contributory negligence, and so on. I believe that the haemophiliac decision was right and that the principle ought to be extended. Therefore, "no-fault" is not only practically best. It is, in principle, the best way of dealing with these cases.
4.40 p.m.
Lord Cocks of Hartcliffe: My Lords, when introducing the debate the noble Lord, Lord Allen of Abbeydale, stated that he was looking forward to hearing expert opinions of other noble Lords. I cannot offer any expertise on this subject. I find myself in that situation for the second time this week. On Monday I had the temerity to speak in the debate about horse racing that was introduced by my noble friend, Lord Donoughue. I had the audacity to address your Lordships, as an ordinary punter who occasionally liked a flutter, among a plethora of other speakers who are members of the Jockey Club, owners of racehorses or race tracks, and so on. I hope that noble Lords will excuse any infelicity on the subject.
At the age of 16 I was taking my Higher Certificate (as it then was) when I became ill. I did not complete the examinations and I did not attain the qualification. The entire course of my life was changed by that accident. It never occurred to me to blame anybody or to examine the matter in great detail. When asked about it, I stated that I had had bad luck. I consider that I am extremely lucky to have been born and enjoyed the experience of life on this globe and to have reached the age that I have—I will not qualify that in any way out of deference to your Lordships. There are certain risks in life that are inherent in the mere fact of existing. One cannot protect against those risks completely.
I refer to one comment made by the noble Lord, Lord Allen. He remarked on a Government majority that was assembled on a Friday. That statement sounded pejorative but I must tell noble Lords that, as a former government chief whip in another place, I liked to have a government majority assembled whatever day of the week it was. Not too much should be made of that point.
During my life I have always believed that those of us who may be blessed with abilities or intellect that are average, or above average, have a grave and
570
serious duty to think of those in society who are not so well off. Having listened to noble Lords today I wonder where society is going. If the tenor of the debate is taken to its ultimate, matters will bear very heavily upon the handicapped people in society.
One of my few contributions towards public life in this country was to move a resolution in my local ward of Bristol West Labour Party that mentally handicapped children should be taken into the education system instead of the health system. That resolution was adopted as party policy by the Labour government who introduced the Mentally Handicapped Children Bill. The Bill fell when Labour lost office in 1970. However, I was elected to the other place in 1970 and the Bill was picked up by the Conservative Government and proceeded with, and I made my maiden speech in relation to the Bill. It was based on the idea that no child is ineducable.
To proceed along the lines that have been mentioned this afternoon would be to turn back the clock. A subtle change would be introduced into our attitude towards handicapped children, particularly mentally handicapped children. If a child has cerebral palsy, neighbours will say of the parents, "It is very unfortunate about the child but no doubt the parents received a substantial amount in compensation. Oh, they did not? Oh, really!" A very unfortunate attitude will develop.
Those of us who have our wits about us, to some extent at any rate, should think very carefully about that matter because those who cannot defend themselves have a great call on those of us who are better placed. There is a rising expectation in society which goes beyond all reason. We are lucky to live in a country with rapid industrial development and the wealth that that generates. By far the largest proportion of the world's population is not in our situation, and those people are suffering from diseases which have long been wiped out in developed countries.
Certain burdens will be placed upon professional people if we go down this road. Every decision will have to be looked at and busy doctors and dentists and other professional people will have to make many decisions in the course of a day under great pressure. Those burdens that will be placed upon them and the queries that will be raised in relation to the great advances in medical techniques, could outweigh any possible benefits or lectures which could be given to civil liberties groups about another great advance.
At the other end of the corridor recently there was a fast for 27 million people who are now facing starvation in East Africa because of the drought in the Sahel. Let us turn our attention to preventable diseases in other parts of the world. Let us give more thought to how handicapped people in society are regarded and let us not become too intellectual in our approach to the problems of society.
4.45 p.m.
Lord Butterfield: My Lords, I should like to express my gratitude to the noble Lord, Lord Allen, for introducing the debate. Some remarks have touched me deeply. There was the contribution of the noble

571
Lord, Lord Cocks. I am sure that the noble Lords, Lord McColl of Dulwich and Lord Walton of Detchant, will agree when I say that we are always trying to remind our medical students of the terrible circumstances in many parts of the world, and asking them to keep matters in perspective.
There is no doubt in many medical minds that things can go wrong. The remarks of the noble Baroness, Lady Oppenheim-Barnes, in relation to her experience and those made by the noble Lord, Lord Wilberforce, add to my feeling that we must continue to debate this subject and find a resolution. The noble and learned Lord, Lord Wilberforce, may have put his finger on a very important point. He stated that if the matter is under the aegis of the National Health Service, which is a national institution, one set of rules may obtain, and that if it is under the aegis of an individual, the American system may evolve. I hope that that situation will not arise. We will not be able to resolve this important and serious problem today but I urge noble Lords to continue to think and talk about it.
The report by the Royal College of Physicians on compensation for no fault sets out the main reasons for arriving at the conclusion that we must continue to discuss the matter. In relation to inequity to the plaintiff, large and sometimes smaller amounts of compensation are awarded for the same problem. Delay is an extremely serious matter for the patient or the family when the question of compensation arises due to some fault. The report recognises that the quality of representation is variable. In some cases, the solicitor who is approached by the family may be very good at cases that involve compensation. To other solicitors such matters may be mysterious.
A problem arises in relation to lump sum awards. I am very taken by the idea of annual payments or some kind of slow payment so that the football pools win problem, which may be advantageous to the financial advisory industry and the stockbroking profession but not to the families involved, does not arise. I was once told by a stockbroker at a luncheon held at a hospital that most of the fortunes with which he was dealing, at any rate in London, came from very modest industrial compensation settlements before World War One. He was very pleased to indicate to me how well he had taken care of those funds. He had improved them and made them grow.
The question of cost must also be considered. If we go for a no-fault system, how will it work out cost-wise? There are inhibitions and impediments to going ahead as proposed. The noble Lord, Lord Campbell, concluded his remarks by saying that something must be done in the matter. Of course, something has been tried; for example, in Sweden and also in Finland. The latter country not only has the medical accident no-fault approach; it also has a fund for dealing with problems experienced in the development of new medicines.
There is also the example of New Zealand. I have been asking people about the system in that country. It is a most interesting but rather worrying situation.
572
I believe that 1.4 per cent. of New Zealand's GNP can be traced as going into its no-fault accident legislation. Moreover, I was told not long ago about the case of a man who built a ladder. He climbed the ladder in order to prune an apple tree but the ladder broke. Despite the fact that it was his ladder and that he climbed it himself in order to look after his own fruit, he received quite considerable compensation for the subsequent damage which occurred. That example brings to mind the line suggested by the noble Lord, Lord Cocks. I understand the noble Lord's point. We cannot wrap everyone up in cotton wool for 24 hours of every day.
There is one further point that I should like to bring to your Lordships' attention. I refer again to the question of cost. One of the men who sat on the inquiry of the Royal College of Physicians is the secretary of Nuffield Provincial Hospitals Trust, Dr. Ashley-Miller. He told me that the trust recently received an application to make a detailed study of the present costs of compensation in the medical world in order to ascertain what no-fault costs would amount to, if introduced. I am sorry to have to tell the noble Lord, Lord Allen, that I do not believe that there will be 100 per cent. support today for his schemes. Eventually that support will be forthcoming. But it seems to me that the information about costs is bound to loom large in the mind of any Secretary of State who is wondering how he can take the matter forward.
When we eventually move in the direction proposed, I hope that we shall be able to separate the costs of these unfortunate outturns of an increasingly technological health service and what may possibly go wrong through technological as well as surgical, medical or obstetrical errors. We must be able to separate those payments from the regional or district health authority funds which really should be established for the care of patients and not for paying compensation. If we have the football pools type situation, very considerable sums of money may be deflected from the clinical care of the remaining patients to cover the cost of any unfortunate accident which may arise.
4.54 p.m.
Lord Auckland: My Lords, the noble Lord, Lord Allen of Abbeydale, initiated the debate in his usual humanitarian fashion. I believe that a tribute is also due to the honourable Member for Greenwich for her courage in introducing the compensation Bill in another place. Whatever flaws the proposed legislation may have—I believe that it has some and I shall try to illustrate them in a moment—it is a pity that it was not at least given a Second Reading so that it could have been further discussed. I say that because there is a point upon which we are all agreed: the present system is illogical and unfair. Those of us who have children who are normal and fit must give some thought to the people who have brain damaged or disabled children. There must, of course, be two lines of thought in this sphere.
I am one of the few Members of your Lordships' House taking part in the debate who is neither a doctor nor a lawyer. However, I am concerned about

573
the matter because I used to work in the insurance industry. I should point out at this stage that I speak for myself and not for any influential organisation. There are many problems in the present system. If the no-fault compensation system goes through in its logical form—I hope that I may put it that way—there would be enormous increases in insurance premiums. That would have a serious effect on the medical profession. Of course, the health service does not have any insurance as such.
The noble Lord, Lord Allen of Abbeydale, referred to New Zealand and Finland. Having visited both countries I have some knowledge about them, though I am not conversant with the no-fault compensation systems in those countries because I am not a lawyer. However, when I visited Finland about seven years ago I recall visiting a special hospital in the town of Espoo which is just outside of Helsinki. There I saw a number of brain damaged children who were taken care of in what is known as the Rivvekoti Centre. The children were beautifully looked after, but it was an intensely moving and sad experience. Whatever compensation their parents received they would have no hope whatever, with the state of medical progress at present, of leading a normal life.
The latter point leads me on to the pharmaceutical industry. Of course, we all know about the Opren and Thalidomide tragedies. However, the Medicines Act did make considerable progress as regards the testing of drugs. It is, of course, an ill tested drug which can, more often than not, cause problems. In my view, it is essential that more and more research is carried out in that respect. I wonder whether my noble friend the Minister has any current figures from her department on the number of brain damaged children, and others, who are awaiting compensation. I know that that is a very general question and I realise that it will probably be verb difficult for her to find an off-the-cuff answer. However, I believe it is important both to your Lordships and to the country that we know roughly how many people are at present involved in such claims.
In regard to the American system, I recall that when I started in Lloyd's of London in 1948 I worked in the claims department of an underwriting syndicate. We dealt with American malpractice and Workmen's Compensation Act insurance. Even in those days, 42 years ago, settlements often went into six figures. We do not want that kind of situation to evolve in this country.
I believe that the Government must act quickly in this matter in order somehow to offset the effects of the present tiresome and illogical system. The effects are tiresome for both the legal and medical professions because the people in those professions have to make agonising judgments. Of course, it is easy to say that, but governments of all parties need to carry out a great deal of research into the matter and there is no instant legislation available.
Similarly, one has the tragedy of the rather cynical lottery which exists at present. A person knocked down by a car may receive a six-figure sum in compensation; but a person damaged by a drug—through no fault of the pharmaceutical company or
574
the doctor—particularly in regard to medical research, may not. That is the problem we face. The House and the country should be grateful to the noble Lord, Lord Allen, and to the noble Baroness, for having given the Government—any government—something to think about seriously.
5 p.m.
Baroness Robson of Kiddington: My Lords, I join other Peers in thanking the noble Lord, Lord Allen of Abbeydale, for introducing the debate today. The point of view from all speakers in the House has been almost unanimous that our system of compensation for medical negligence through the courts in many cases encourages the practice of defensive medicine. It also adds enormously to the cost to the NHS through the excessive use of pathology tests and X-rays in order to ensure that nothing has been missed and that there is no danger of a doctor being sued for negligence. Perhaps the worst problems are in the obstetric field.
Saddest of all is that our system has created a grave danger to openness between doctor and patient because the doctor is afraid of saying too much. Sometimes a patient only wants a clear explanation of what went wrong; an assurance that steps will be taken to ensure that it will not happen again. That situation is beginning to disappear altogether from our system due to the danger of being sued in court. I think it was the noble Lord, Lord Butterfield, who expressed the view that compensation for medical negligence should be made in annual payments. I could not agree more with him. How can a judge decide how long a person will live? Somebody who is expected to live only 10 years may live for 50 years these days, and the situation could result the other way round.
The noble Lord, Lord Allen, suggested that I might talk about the Swedish system. In Scandinavia there are no enormous payments; there are annual payments which increase with inflation to cover the costs necessary to keep the injured person in funds.
The Swedish Government rejected the New Zealand system of an overall no-fault compensation. The system in Sweden, started in 1975, involved only injuries from medical treatment, but in 1978 it was extended to include drugs. The noble Lord, Lord Auckland, also mentioned that he would like an insurance scheme. In both Sweden and Finland schemes are based on voluntary group insurance between the health authorities—in Sweden the county councils because our system is devolved—the drug companies and the insurance consortia. It is quite interesting to realise that in 1988 the premiums were about 70 pence per head per year. Thus it is possible to set up an insurance scheme.
The noble Lord, Lord McColl, was nervous about a no-fault insurance scheme because it might not preclude a person from going to court and obtaining a large compensation award in addition. In Sweden, injured persons are not parties to the insurance agreement, therefore they are free to pursue their claim in the courts if they so desire, rather than

575
receiving compensation through the insurance schemes. However, they cannot do both; that would obviously be absolutely wrong. It is interesting to note that there have been very few court cases since the introduction of the no-fault compensation scheme.
In Sweden patients have a statutory right to information about their medical treatment, and they have had that right for a long time. It is essential for a successful implementation of the patient injury scheme. That will apply in this country also, I understand, from November, when patients will have access to their own medical records.
Certain standards are set for eligibility. A patient must have been ill for 30 days or in hospital for 10 days. The advantages of the scheme are that it is quick, has low administrative costs and eliminates legal costs and the adversarial features between doctor and patient. Those are completely avoided; there is no holding back in an open conversation between doctor and patient about what may have gone wrong.
In addition, in 1980 in Sweden the responsibility board for health and medical care was set up. It consists of a judge, four Members of Parliament and four members representing various organisations. In other words, in Sweden the responsibility board is outside the medical profession, but it is limited in its jurisdiction. It can only impose a caution as a sanction for a less severe mistake and a reprimand for a more serious mistake. The board has absolutely no authority to revoke a licence. That procedure is still left in the hands of the medical profession.
The Finnish system is much more recent; it started later than the Swedish system. The Finnish Patient Injury Act was passed in 1986 and the government are to be congratulated on having defined much more clearly the grounds on which compensation should be paid. If I had more time, I would read those grounds to the House but noble Lords who are interested will find them at column 1244 of the proceedings of Hansard in another place for 1st February 1991, volume 184. I believe that we in this country should look very carefully at the matter. I am sorry that I do not have any more time.
5.8 p.m.
Lord Ennals: My Lords, everyone has said how much we in this House owe to the noble Lord, Lord Allen of Abbeydale, for introducing not only this debate but so many others. I find it very unsatisfactory that with so much wisdom in the House each speaker is confined to seven minutes. It is treating us all as though we were sixth-formers. We must somehow find a better way than this because the House possesses great experience; we have heard many brilliant speeches, each containing a gem. However that problem is not for us today.
First, we thank the noble Lord, Lord Allen. I agree with the noble Lord, Lord Auckland, that it would be nice if we had been debating the issue on the Second Reading of a Bill that had come from another place. I have great respect for the way in which Mrs. Rosie Barnes put forward her Bill. It was based on a great
576
deal of experience among some of my noble and honourable friends, particularly Miss Harriet Harman, who was involved in previous legislative attempts. It would have been nice had the Bill received a Second Reading, been knocked around in Committee in another place and had come here and we had knocked it around in Committee and finally tried to get it right.
We have been reminded that this issue has been debated year after year. I first debated it in November 1978, shortly after the report of the Pearson Commission had been published. I did not give the reaction of the government who were then in power. I merely said that we were carefully considering the report. Shortly after that, another government came to power. Twelve years later we are still considering this matter. Before I have to give way to allow the Minister to speak at 5.29 p.m. I had better say what my party's policy is. It would be a pity if I missed that out.
We believe that there should be a system of no-fault compensation for the victims of medical accidents. I am not talking about road accident victims. We believe that the Government should set up an inquiry and ask for a report with recommendations on the details of how such a scheme would work. I hope the Minister can comment on that. The whole House has been concerned with the costing of such a scheme. The Minister may be able to give us a good deal of information on the matter. The Government should certainly investigate the cost of the current scheme for compensation for negligence, including court settlements, out of court settlements, the medical indemnity scheme, court costs, legal aid costs, the cost to the social security system of benefits for the victims of medical accidents and all the other different costs that are involved. We talk about how expensive a no-fault liability scheme would be but we do not know how expensive it would be. However, we could at least make an assessment of how costly the present scheme is.
The whole House was grateful to the noble Baroness, Lady Robson of Kiddington, for explaining to us the position in Sweden. It is important to know about that; but one has to recognise that in Sweden there is a much more substantial social security system to go with the scheme. I direct that observation to my noble friend Lord Cocks. I never like to disagree with him, although I sometimes do. I believe he was wrong, although I share his concern that in considering compensation for people who suffer from medical accidents, whether by negligence or other fault, we must also consider the position of other victims. I remember facing the same problem when I first became a Minister in the Department of Health and Social Security.
At that time there was an industrial injuries scheme and a scheme for war disabled. I was very interested in the latter scheme as I am war disabled myself and my pension is an important part of my income. We recognised that it was important that no section of society should be left out of compensation arrangements. Over the years governments have tried to introduce benefits which help people who are

577
naturally disabled. Governments have introduced attendance allowances and mobility allowances. I hope that eventually disablement costs allowances will be introduced.
The noble and learned Lord, Lord Wilberforce, spoke with great emphasis and clarity. The logic of his argument is that all costs of medical mishaps causing injury should be compensated for by the state. I first came across this issue in a direct way in 1978 when I introduced a Bill for vaccine payments. That Bill was not concerned with compensation but payments, I felt forced to introduce that Bill to restore public confidence in vaccination policy—there was much criticism at that time that children had been damaged by vaccines—as people in their hundreds of thousands were opting out of vaccinations, Without doubt those vaccinations were to their children's advantage. I also wanted to help those relatively few people whose children had reacted adversely to vaccinations. That was a special case.
I return to the noble and learned Lord, Lord Wilberforce, and his point about haemophiliacs. What was special about the haemophiliacs was that they were able to organise a lobby, There was huge public concern about their plight. A limited number of people were afflicted and the press took hold of the matter. The Government were forced to act. That was what was special about that case, not the fact that those people were haemophiliacs.
The Government had to react in the case of the haemophiliacs in the way that I had to react at the time of the vaccine payments Bill.
I believe that almost every speaker in this debate has agreed that the present system is grossly unsatisfactory. It is unpredictable because the injured person, on whom the burden of proving negligence falls, cannot know in advance whether he will receive compensation. The existence of the injury is clear, but it is not clear whether the victim will receive compensation, or how much. The compensation procedure is expensive because of the cost of litigation. That cost is likely to deter some people from seeking compensation. If costs are not awarded against the defendants, they are likely to eat substantially into the award.
I am not criticising any noble Lords here who are lawyers, but the amount that is paid in legal fees is a substantial proportion of the money that is eventually paid from the public purse. I refer to the public purse because it is the health authorities who have to foot the bill when a case is successfully prosecuted in court.
The system is unfair for a number of reasons. The costs and risks of litigation place enormous pressure on claimants to settle for less than full compensation. The dividing line between success—and perhaps substantial compensation—and failure is a fine one. It is both necessary and difficult to apportion blame where there has been a medical accident. The system is also unfair because a person who can attribute a medical accident to negligence will obtain compensation while another victim of what may be an almost identical accident, but who cannot prove negligence,
578
will get nothing. Similar cases of injury will be compensated in quite different ways. Mrs. Rosie Barnes was quite right to say in another place:
"The current system is a lottery and it is necessary to prove negligence to be awarded compensation. There may be negligence, but proving it can be distressing, costly and time consuming—and quite often impossible. The only witness may be unconscious at the time of the incident, unaware of what is being done and why".—[Official Report, Commons, 1.2.91; col. 1224.]
Noble Lords have also argued that the system is unsatisfactory because of the extraordinary time lags involved. Mrs Barnes also related (at col. 1224 of Hansard) the unfortunate tale of a woman. She said,
"Her husband died some seven years ago, us a result of what she believed to be negligence following a fairly routine and relatively minor piece of surgery. She was left a young widow, with three children. She took the matter to court, and was eventually awarded £250,000 in compensation—although she made it clear that it was not the money, but a proper investigation and explanation, in which she was interested.
The matter did not end there, however. The health authority chose to appeal and, seven years after her husband's death, the woman discovered that she had lost her £250,000 award; even worse, costs of £150,000 were awarded against her. The only way in which she can meet those costs is by selling her house".
Perhaps that is an extreme case, but there are many other extreme cases. It is such extreme cases which prove that the present system is grossly unfair and grossly unsatisfactory.
I hope that the Minister will not merely answer the questions that have been raised in this House but say something that will show the way forward. There is a feeling that at last the time has come to put something on the statute book which provides fairness and justice and addresses the problems which have been raised, such as the question of defensive medicine mentioned by the noble Lord, Lord McColl. Something has to be done. We look forward very much to the Minister's reply to what I can assure the noble Lord, Lord Allen of Abbeydale, has been a remarkable debate.
5.20 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, I too should like to thank the noble Lord, Lord Allen of Abbeydale, for his clear introduction of the subject, which has attracted wide bipartisan interest both here and in another place. I can assure him that we take seriously the worries and concerns that have been expressed. I have been most interested to note that, as my noble friend Lady Oppenheim-Barnes said, in the course of this debate no one has fully supported the status quo. That at least is a starting point.
Perhaps I may attempt to summarise some of the concerns. First, there is a feeling that it is unfair for one person to receive extensive damages, as the noble Lord, Lord Ennals, mentioned, while another cannot bring a case or, having brought the case to court, loses it.
On the question of unfairness, it is central to the common law approach that we follow in this country that a person who has been damaged by the negligent action of another is entitled to be compensated by that other person for the harm he or she has suffered. In a very even-handed way the noble Lord, Lord Cocks,

579
pointed out that there could be unfairness for other groups of handicapped people even under a no-fault scheme.
We have established that there is a system which operates if doctors are at fault. If doctors are not at fault, and despite the best endeavours of all concerned treatments fail with damaging results, is it still appropriate to compensate patients? If more money has to be diverted into compensating patients for the result of entirely diligent treatment less is available for compensating those who are genuinely entitled to compensation. Most important of all from the point of view of the National Health Service, less money is available for the first duty of the National Health Service, which is to give treatment to patients who need it.
Secondly, there is concern that large awards and increasing litigiousness may increase cases against doctors. We have heard of the experience in the United States where an escalation in defensive medicine and even more litigation is predicted. There is no evidence that that is happening here, though I noted the examples quoted by the noble Lord, Lord Richardson. If defensive medical practices are adopted by a doctor in order to prove in a court of law that he has taken every precaution that is not necessarily a bad thing.
Apart from the fact that there is little hard evidence to validate the fears of an increase in defensive medicine—and the views of the Royal College of Physicians and the King's Fund Institute could be quoted in support of that fact—even if there is a risk it is by no means certain that any proposals that have been put forward in favour of a no-fault scheme would do anything to reduce it.
My noble friend Lord Campbell of Alloway said:
"Something has to be done. The question is what".
Most proposals for no-fault compensation retain the right to sue in tort. Doctors would thus still have to live with the prospect of litigation. In cases which would not progress to the courts but which would proceed under a no-fault system, negligence might no longer be an issue. However, the number of potential compensation cases would increase substantially and doctors would still wish to avoid involvement in specific cases which would be both time-consuming and stressful. We believe that overall the outcome would be to increase rather than diminish the propensity for defensive medicine.
In connection with the American experience it should also be noted that damages in the United States are awarded by juries who are not professionally expert in the assessment of damages. Damages can be tremendously high and may be intended as much as a warning to other perpetrators as to rectify the harm which has been done. In this country damages are awarded by experienced judges who determine the needs of victims on the basis of an assessment of their needs to overcome the damage and the financial implications. The relative systems between the United Kingdom and the United States
580
are thus very different. Furthermore, we have to bear in mind that American lawyers have a contingency based fee system, as we were reminded by my noble friend Lord McColl, which gives them a proportion of the damages awarded to their clients. That must clearly have some effect.
Before leaving that subject perhaps I may quote a recent British Medical Journal article which said that:
"one of the features of using US analogies in British debates is the lack of attention to real evidence on the American position. This is compounded by the tendency of some to predict the future by assuming that 'current trends will continue'".
Apparently insurance premiums to cover doctors against actions for negligence have gone down over the past two years.
Thirdly, concern has been expressed that recourse to the courts is damaging to the doctor/patient relationship and that the present system does not sufficiently bring home accountability. The relationship is damaged when the patient is convinced that the doctor has been negligent and not when the patient commences an action in tort. Even though the process may take place outside a court of law, doctors are still entitled to defend themselves.
I should like to point out to the noble Lord, Lord Irvine, that doctors and other health professionals are required to provide patients with enough information about treatment alternatives and consequences to allow the patient to take a proper decision on whether to accept the treatment. If a doctor fails to discharge that obligation he may be guilty of assault.
The fourth underlying concern which has been raised relates to criticisms of our tort system. There is a feeling that winning a negligence action is too difficult, too slow, too uncertain and too expensive. That is an area in which the Government are in full sympathy. We therefore supported the passage of the Private Member's Bill which led to the Access to Health Records Act 1990 which will put at the patient's disposal information that will enable him to make an informed decision on whether to pursue a negligence claim.
Regarding the process of litigation, the Government acknowledged the need for reform of civil litigation when the then Lord Chancellor, my noble and learned friend Lord Hailsham, set up the Civil Justice Review as long ago as 1985. That resulted in some 91 recommendations to reduce the cost, delay and complexity within the civil justice system and generally to improve access to justice. Among the most important proposals affecting medical injury litigation which came out of that review are the matching of cases to judges, a "cards on the table" approach to evidence and an interventionist role for the courts to ensure case progress. From July this year there will be new arrangements for the allocation of business between the High Court and county courts to ensure that cases are heard by the appropriate level of judge. Those changes will provide that the High Court is reserved for such cases as require its expertise. We hope that the result will be speedier determination of actions. New rules have already been introduced

581
requiring earlier disclosure of medical reports and statements of special damages by the plaintiff. Furthermore, my noble and learned friend the Lord Chancellor will be considering steps to allow courts to exercise an interventionist role in ensuring case progress. I trust that your Lordships will agree that those measures will do much to assist those who resort to the courts to establish their claims for compensation.
The question that remains, however, is whether there should be choice, as suggested by the noble Lord, Lord Pitt, and what can be done for those who cannot prove negligence. It is suggested by some that no-fault compensation is the answer. However, no credible no-fault scheme which is simple to run, straightforward in operation, fair in outcome or acceptable in cost has thus far been devised, whether in Sweden, New Zealand or anywhere else. However, in saying that, we are indebted to the noble Baroness, Lady Robson, for updating us on the current position in Scandinavia.
The Pearson Commission, of which the noble Lord, Lord Allen of Abbeydale, was a most distinguished member, reported in 1978 and was sympathetic to proposals for a no-fault scheme. But it identified problems relating to finance, scope and administration.
However, the most significant difficulty identified was how to establish causation. It was forced to conclude that in practice there would be difficulty in distinguishing a medical accident from the natural progression of the disease or injury and from a foreseeable side effect of the treatment. I think that we are no nearer establishing causation some 12 years later. Although advances in medical science have clarified some causal links—for example, that damage to the brain during delivery is rarely the cause of cerebral palsy—the introduction of innovative techniques and new drugs and the increasingly complex interactions between these and the patients to whom they are applied heighten rather than diminish the problems of proving causation in the individual case.
For all those reasons the Government's position remains that the basis for seeking compensation for injuries alleged to have been suffered as a result of medical intervention should be proof of negligence actions through the courts and that the Government's approach should be to effect changes to improve the process of litigation. Where negligence cannot be proved we do not in any event accept that there should normally be provision beyond that which is available through social security benefits and free National Health Service treatment. After all, that leaves scope for ad hoc arrangements in exceptional cases such as the whooping cough vaccine to which the noble Lord, Lord Ennals, referred, and the haemophiliac settlement. Like others, I am most grateful to the noble and learned Lord, Lord Wilberforce, for his enlightening explanation of the humanitarian approach.
Looking ahead, my right honourable friend the Secretary of State is most concerned that if any further action could be taken concerning medical negligence,
582
then action should be taken. I must dispute the suggestion of the noble Lord, Lord Irvine of Lairg, that my right honourable friend was unconstructive in his response to the Private Member's Bill Second Reading debate in another place. He has given undertakings to discuss with interested parties whether an arbitration procedure could be established within the National Health Service, which may provide quicker, cheaper and simpler avenues for the informal resolution of disputes. The announcement was made without commitment since we want to see the outcome of our consultation and to take advice on the feasibility of introducing such a measure without primary legislation and as a voluntary alternative to the courts. We should also want to consider the likely take-up of such a scheme in the light of the improved litigation processes to which I have referred.
Secondly, my right honourable friend was able to point to the fact that that my noble and learned friend the Lord Chancellor is considering with the Law Commission the possibility of instituting a new inquiry into personal injury damages. Thirdly, he announced his intention to investigate, with the help of the presidents of the various royal colleges, what exactly is understood by the term "defensive medicine" and what hard evidence there is for its practice. Fourthly, my right honourable friend readily conceded that we should have more central information about the matter and proposed that the Department of Health should both review the incidence of medical accidents and carry out a proper analysis of claims made.
It is an interesting idea that has been put forward by the noble Lord, Lord Allen, and indeed the noble Lord, Lord Walton; namely, that a high level committee should be set up to investigate further. That also probably falls into the category of the inquiry asked for by the noble Lord, Lord Ennals. No doubt both my right honourable friend the Secretary of State and my noble and learned friend the Lord Chancellor will consider the suggestion.
The noble Lord, Lord Allen of Abbeydale, referred to the European Commission's proposal for a directive concerning the liability of providers of services in cases in which an individual has suffered damage to his personal property from the provision of a service. The proposal puts forward a fault-based regime. The plaintiff will have to prove damage and a causal link between the damage and the service provided. At that point the proposal reverses the burden of proof. The defendant would then have to prove that he was not at fault. At the moment the proposal is in its initial stages and is being considered. I understand that it is the responsibility of my honourable friend the Minister for Consumer Affairs and that the Department of Trade and Industry is currently seeking the views of those representing the interests of both consumers and industry.
I trust that your Lordships will be assured that the Government have given and are prepared to give most careful consideration to the case for a no-fault system for medical injuries. I believe it has been established by both the debate and what I have been able to say that no-fault compensation is not a straightforward or easy

583
option. It has not so far proved possible to devise a scheme which would relieve unfairness and which would be straightforward in application. Because of the various checks and balances in different countries and different systems, it is not possible to transfer directly one scheme which might work in one country to another country. Certainly we consider that the National Health Service (Compensation) Bill, which has been referred to by many speakers in the debate and which was rejected at Second Reading in another place, did not offer a workable solution. As drafted the Bill could not work. The detailed principles on which the scheme was supposed to work had been left to one side to be resolved by someone else at a later date.
Many interesting and useful points have been raised in the course of the debate. Clearly the Government recognise the interest and importance of the subject. Once again I record my thanks to the noble Lord, Lord Allen of Abbeydale, for bringing forward the subject for debate and for giving me the opportunity to explain the Government's position
Lord Campbell of Alloway: My Lords, before my noble friend sits down perhaps I can ask for clarification. Do the Government accept that this is a proper subject, in view of the concern expressed today here and elsewhere, to be referred to a Select Committee of your Lordships' House?
Baroness Hooper: My Lords, I am not sure that it is proper for the Government to refer a subject to a Select Committee. Nevertheless, I have given the assurance that the Government will consider very seriously the points that have been made in the course of the debate.
5.36 p.m.
Lord Allen of Abbeydale: My Lords, I should like to thank all noble Lords who have taken part in what I think has been an impressive debate. I certainly make no apology for having raised this issue so soon after the debate in the House of Commons, although I repeat—it is so long ago that everyone may have forgotten —that I was never for a moment suggesting that we should discuss Mrs. Barnes's particular proposals as set out in her Bill. I acknowledged the improvements that have been made or are in prospect, including, if I may remind the noble Lord, Lord McColl, even a modified form of contingency fee.
In approaching this subject it seemed to me that the present system is not an efficient way of using money. When I considered the proportion of costs of various kinds which are borne in relation to the money actually paid out, so that probably in the small cases the costs are rather greater than the award, it did not seem to me that that was the best way for the National Health Service to benefit.
I am also unimpressed by the argument about anomalies. I thought that the contribution of my noble and learned friend Lord Wilberforce was particularly interesting. I also reminded myself by looking at what the Pearson Report stated in its concluding reflections covering the whole field:
584
"We have not removed anomalies…; we have merely moved the boundary lines. We think that the new boundary lines are more sensible, but those who fall on the wrong side may not agree".
Short of going for some kind of New Zealand scheme—I do not think anyone in this Chamber would wish to see that—there is no way of avoiding anomalies, but there are ways of improving the scheme and improving provisions in various ways. I remind the House that I did not suggest a particular form of no-fault scheme. The disadvantages of the present set-up, the number of suggestions that have been made, and the anxieties and frustrations which were felt generally have led me to the conclusion that it would be desirable for a committee of inquiry to be set up to investigate the arguments that we have heard from both sides of the House. It is a topic which cuts across party lines.
I derive some modest encouragement from what the Minister said about her colleagues considering the suggestion of setting up a committee. I had better leave it at that. I thank her for her reply and noble Lords for the contributions to the debate. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

The Performing Arts
5.41 p.m.
Lord Annan Lord Annan rose to call attention to the problems facing the performing arts; and to move for Papers.
The noble Lord said: My Lords, in moving the Motion this evening I shall try to limit my remarks to 10 minutes in order to give those who know considerably more about the subject than I do a little more time to speak. Before doing so I wish to thank the noble Lord, Lord Palumbo, who so soon after his introduction cancelled an engagement at short notice to give his maiden speech this evening. We all look forward to it enormously.
In the near future the Government will have to face some major problems concerned with funding the arts. At present the national companies are not responsible for financing their buildings. For example, the National Theatre has no sinking fund for building repairs. That is all the more alarming since the building shows signs of sinking into the Thames. Over 15 years the building has developed cracks in the fly tower of the Lyttelton Theatre and water drips into the foyer from faults in the promenade. The repairs to the fly tower will cost £500,000 and the promenade repairs £300,000. The Royal Shakespeare Company has begun to murmur that some renovations will be needed in the Barbican.
What is the Government's policy on the matter? Do they intend to do what they have done for museums and galleries? They have been given a capital sum the income from which can be used to pay for the repairs formerly undertaken by the Property Services Agency. The capital sum given was quite inadequate to cope with the arrears of maintenance of over half a century. But, be that as it may, what is the Government's policy? They cannot expect the national companies or

585
the South Bank to maintain the buildings in which they work when sponsorship is diminishing and when a surplus is made, as occurs at the National Theatre from time to time, it is taken as a signal to reduce the grant by that amount.
Of course the companies and the orchestras are more concerned about the state of the recurrent grant. This is a singularly inopportune time for anyone to ask for more money for the arts. Mr. Mellor was successful in obtaining an 11 per cent. increase when an increase of about 5 per cent. had been expected. It is well known that the increase is just enough to cope with inflation and not much more. I foresee a bleak immediate future. The tourist trade will be down, sponsors less able to give, donations from businesses will decline and every public service, from the National Health Service and education to the railways, will be clamouring for more public money.
Much of what I say tonight may be deplored by some noble Lords. I believe that the Arts Council will have to make some very disagreeable decisions about priorities. As Keynes used to say—and I am sure the noble Lord, Lord Palumbo, will agree—the worst policy is to cut across the board and make equal misery for all. I therefore ask: how many national orchestras can we afford? Can we really afford six ballet companies? If the Royal Shakespeare Company has at last been brought to its senses and has reduced the number of stages on which it performs from 10 to four—two in the Barbican and two at Stratford—can there not be some rationalisation of effort elsewhere?
How many opera companies can we afford? Every Welshman, led by the Leader of the Opposition, will die on Offa's Dyke rather than see the Welsh National Opera disappear; and rightly so. It is a marvellous company. But the question remains: are Kent Opera and Opera North comparable in quality to that company?
There is one special case. I regret that the noble Lord, Lord Sainsbury, is abroad and cannot speak for the Royal Opera House. Some noble Lords may call the Royal Opera House the rich man's parade ground. The rich certainly pay for their pleasures. Seat prices have risen by 135 per cent. in five years. Donations represent 15 per cent. of the Royal Opera House income. In Paris, Vienna and Milan, 80 per cent. of the income for those opera houses comes from the state. At the Royal Opera House it is 36 per cent. Only five years ago the figure was 53 per cent. The Royal Opera, the Royal Ballet and Royal Birmingham Ballet give 450 performances a year more than any other comparable European company. For opera, 93 per cent. of the seats are sold; for ballet the figure is 91 per cent. Yet there are fewer in the chorus and fewer dancers than in New York, Paris or even Denmark. The Royal Opera House is a triumph of financial resourcefulness.
But the question is simply this: does our country want an international opera house where the world's greatest singers and a great ballet company can perform? If the answer is yes, I do not believe that the present situation can continue.
What I say applies equally to the provinces. Let us take the Liverpool Playhouse. It is a theatre which is well worth saving. But how can the city council, in its present plight, operate a pound for pound subsidy? Expenditure on libraries can come out of the central government block grant. However, expenditure on theatres must come out of the community charge. We therefore have the paradoxical situation that the Arts Council says to Liverpool, "Raise your community charge", and the Department of the Environment says to the city, "Lower your community charge".
I agree that local support must be forthcoming to qualify for a grant. Think what Birmingham, Glasgow and now Sheffield are doing for their citizens. For years the Arts Theatre in Cambridge was ignored by the Arts Council until the noble Lord, Lord Goodman, intervened. However, I am bound to say that the meanness of that city is matched by the niggardliness of the greatest and richest of the Cambridge colleges.
Whenever anyone suggests that a company or a university department should be closed down there is an uproar. No wonder. That spells unemployment and a bitter sense of futility among the dedicated people who work their hearts out for the arts. I believe that one can diminish the uproar if one can persuade those in the same line of business that the decision was taken on judgments made by their peers. Peers—and who in this House will deny it? —make informed judgments. When Sir Peter Swinnerton-Dyer was chairman of the University Grants Committee he asked experts in every academic field to rank departments. Dons naturally denounced the results of those rankings in public. But behind locked doors and in the Athenaeum they recognised that the University Grants Committee had got the rankings about right. Will the noble Lord, Lord Palumbo, consider having a word with Sir Peter to learn the wisdom of the serpent and see whether the Arts Council committees could undertake some ranking?
Like all those who love opera I have my criticisms of the Royal Opera House; there are too many new productions and too few are successful, often ruined by producer power. I have my criticism of the Royal Shakespeare Company; there are too many trendy productions that insult Shakespeare. Why cannot John Barton be brought back to produce "Julius Caesar" or "Macbeth", spoken as it was in Shakespeare's time in the accent which scholars have reconstructed? I can assure the noble Viscount, Lord Astor, that he need not look alarmed because I shall resist the temptation to give the House an impression of what it would sound like.
Those criticisms are simply provoked by the excitement that great art generates. Yet in these times it requires an act of faith by those who work for the arts to continue to believe in the eternal value of art in transforming the notions held by men and women of the nature of life. All that those underpaid and overworked devotees can do as they work in the theatre, orchestras, the film industry and all branches of the arts is to repeat to themselves the words of Henry James:

587
"We work in the dark. We do what we can. We give what we have. Our doubt is our passion, and our passion is our task. The rest is the madness of art".
5.52 p.m.
Lord Crickhowell: My Lords, I am grateful to the noble Lord, Lord Annan, for introducing this important topic. It also gives us the opportunity to welcome the noble Lord, Lord Palumbo. We look forward to his speech with the greatest pleasure and interest. He has a sensitive and difficult job which involves much unpaid time and effort. It is wrong that the job of the chairman of the Arts Council should be unpaid; there is a need for legislation to change that situation.
I am glad that there is no need for me to reopen earlier arguments about the Welsh National Opera because an initial wrong has been largely put right. I say "largely put right" because, unexpectedly, there is a question about whether £50,000 of the promised £300,000 can be found. Despite that hitch, the Arts Council deserves credit for a change of heart, for the acknowledgement of its error and for its correction. The situation which faced the Welsh National Opera—and there are those who would die for it east of Offa's Dyke as well, because it is the major touring company in England—is typical of the problems confronting most performing arts organisations.
Before I turn to consider those problems it is right that I should give proper credit to the Government. Richard Luce made an important breakthrough by establishing a principle of 3-year funding. However, he left his successor an awkward inheritance—an increase in arts funding of 3 per cent. at a time when inflation was more than 9 per cent. The five major British opera companies warned that that would mean closure. Other performing arts companies were no less threatened. Mr. Mellor went into battle with characteristic determination. He found the ear of a sympathetic Chief Secretary, now Chancellor. The new enhancement fund makes a critical difference. David Hunt also played his part and found resources to write off the inherited debt of the Welsh National Opera.
But fundamental problems remain. The situation confronting that company will be all too familiar to the management of almost every company, large or small. Despite a remarkable record at the box office, success in attracting sponsorship and fund raising, it is dependent for the majority of its funding on Arts Council subsidies. Over a number of years those subsidies have fallen short of the rate of inflation. As with many other performing arts companies the programme must be planned several years ahead; artists must be hired and commitments made. The promise of 3-year funding is of very little help if the commitments for later years bear no relationship to the likely rise in costs.
I cannot emphasise enough the point about the length of the planning cycle. The only possible basis for the maintenance of performing arts companies is through long-term partnership with funding organisations. The majority of performing arts companies have virtually no room for manoeuvre. For years they have
588
pruned costs simply in order to survive. Their performers are not well paid and their numbers, which are dictated by the nature of their art, cannot be reduced. Many of their costs are outside their control. The room for increased sponsorship, or even its maintenance, is constrained by the economic circumstances of the time.
I have spoken of partnership. Even if those companies were tempted to be profligate they are the subject of appraisal and supervision. Representatives of the Arts Council attended almost every meeting of the finance and general purposes committee of the WNO. The ability to influence policy and economy exists with every client of the Arts Council and the arts associations. If partnership is to work it cannot be arbitrary. It depends upon the existence of successful relationships based on knowledge and mutual respect between officials. It depends upon the members of the council maintaining such relationships with their own officials that they are well informed and support agreed plans, including essential long-term corporate plans. It depends upon an equal level of understanding and support by the Government of the Arts Council's commitments and plans.
Partnership is not confined to revenue funding. Frequently it involves the provision of accommodation where local government has a particularly important role. We in this country do not have a good record on buildings, not only in relation to maintenance. We desperately need more theatres capable of staging opera, dance and large-scale performances of all kinds. That is why I have always been a vigorous supporter of the efforts being made in Cardiff and North Wales to build suitable theatres. I was saddened that as Secretary of State I could not find the money to build an opera house in addition to a commitment to a major extension of the National Museum of Wales. However, it is welcome news that he has given the go ahead for detailed studies of the Cardiff project and that a private backer has come forward with a substantial offer of funding for a theatre in North Wales.
One particular problem arises from the established terms of employment. In this country singers and musicians who are poorly paid for their basic work can demand large fees for performances for TV and video. That makes such broadcasts extremely expensive and therefore one seldom sees broadcasts or videos of British opera. The companies, the performers and the public all lose out. I am glad that recently the unions agreed to reduce some of those payments. But there is an urgent need to go further and to introduce new contracts that will raise basic earnings which, as on the Continent, require a reasonable number of TV and video performances. Apart from the benefits to the performers and the companies, the public would get better value for its subsidies because performances would be seen by vastly larger audiences.
Despite some philistine cries of protest, there is increasing acceptance that the arts need and deserve public subsidy, as they have received it in some form or another in most ages and in most countries. Without that support we should be unable to share

589
some of the greatest creative efforts of the human mind about which the noble Lord, Lord Annan, spoke. The loss would not simply be cultural. Thriving artistic institutions are an essential component of a successful social and economic environment and they are an absolutely vital tool of economic revival in previously depressed areas. I was delighted to hear the present Secretary of State for Wales express a similar view when speaking last Saturday to members of the Welsh National Opera after a splendid first night in Cardiff.
6 p.m.
Baroness Birk: My Lords, I am sure that we are all looking forward to the maiden speech of the noble Lord, Lord Palumbo, who has great courage in speaking so soon after his introduction. I believe that he will have an easy run this evening but I cannot promise that that will always be so. I am grateful to the noble Lord, Lord Annan, for initiating the debate. However, I do not agree with what he said about not fighting for more funds at present. Unless you fight for the priority which you believe is important, you never get anywhere. It is always the wrong time, especially for funds for the arts. I believe that we must continue with the battle.
Why are the arts always in chronic crisis? There is not enough money. Why should we have the lowest expenditure per capita on the arts among our major European neighbours—less than half that of France or Germany? Why are we losing companies of such excellence as the Kent Opera and the Liverpool Playhouse? The RSC was only pulled back from the brink after its London base was closed for several months. Many smaller companies all over the country are faring even worse. One is apt to forget the smaller companies and think only of the larger ones.
Since the Arts Council's housing the arts fund was wound up, there is now no major source of funds for capital renewal in theatres' national stock. There cannot be performances without buildings in which they can be held. The Theatres Trust, on whose council I sit, with its slender resources is attempting to do a first stock-taking, but without realistic funding it will be impossible to follow the study with action. More theatres will be in a state of disrepair or decay. I do not believe that that is always recognised.
Higher public investment leads to higher private investment both from industry and individuals. Arts Ministers have been quite right to boost sponsorship as much as possible. However, in 1989 some of the larger sponsors warned the Government that they were failing in their role as the core funder and threatened not to continue to carry the burden unless the Government played their financial part. That threat occasioned a prompt response, whereas cries for help from the arts community were dismissed as whingeing. I suppose that is par for the course.
Even if there is an arts lottery as a means of expanding arts opportunities—and it seems to me that that is a good idea—it is vital that the Government do not abdicate their responsibility because it would be
590
hazardous to leave the matter of funding in the hands of a lottery in the hope that it would raise the amounts required.
I am sure that we all feel that local authorities should be playing a greater role in arts support. But, as the noble Lord, Lord Annan, pointed out, local authorities are squeezed. They have to make terrible priority decisions—for example, should they take money from meals-on-wheels in order to keep a theatre going—in the context of the poll tax and charge capping. Therefore, at this time they cannot really fulfil much of an arts function. That is very sad, not only for financial reasons. Local authorities are in a position to create a link with people locally and interest them in the arts in a way which may be impossible if they are being performed centrally.
The last Arts Minister in Mrs. Thatcher's Government tried to paper over some of the cracks by earmarking money which was already within the Arts Council's budget—not new money—and calling it an enhancement fund. But that meant that incentive schemes being proposed or run by the Arts Council, including one for capital projects, were sacrificed to enable that rather dubious concept to exist. In introducing the new enhancement fund, the then Arts Minister, David Mellor, said:
"The Arts Council will draw up a detailed scheme which I will want to look at to see if it meets the needs of the hour".
I find that very worrying. What price the arm's length principle to which I thought most of us were wedded as regards the Arts Council? If that takes place it looks rather as though the arm has been telescoped to a stump.
Unfortunately many arts bodies today have lost faith in the Arts Council. They see it as more anxious to conform with the Government's wishes than to respond to the needs of performers and the public. A symptom of the present crisis of confidence is that after nine attempts, a chairman still cannot be found for the London Arts Board, and nor has it a director. When he replies perhaps the Minister can tell me whether there is any news of that extraordinary situation in our capital city.
Finally, amateur as well as professional companies are feeling badly undernourished. With music and art now made optional in schools after the age of 14, and drama and dance not even foundation subjects, we are hardly encouraging children to enjoy the arts and participate in them. In fact it is an exercise in devaluation. The arts are always in crisis because we do not provide the funds necessary for them today and we are not providing an environment to enable them to flourish tomorrow.
6.6 p.m.
Lord Palumbo: My Lords, it is with considerable trepidation that I rise for the first time in your Lordships' House, the more so since convention properly requires that my remarks are non-controversial. However, first and foremost, I am indebted to the noble Lord, Lord Annan, for initiating this debate. Thinking it over, I confess that a debate on the arts could not take place in a more fitting and appropriate venue, because the Chamber is a work of

591
art in itself, conceived as it was by the great Victorian architect Sir Charles Barry, in collaboration with Augustus Pugin.
I crave your Lordships' indulgence for the points which I should like to make on the performing arts. I hope very much that when I have completed my speech, your Lordships will not feel constrained to censure me, as a former Member of your Lordships' House, Lord Beaconsfield, did when he said of that selfsame architect, Sir Charles Barry, that he should be hanged in public for his design of the Houses of Parliament.
My personal barometer for assessing the general health and condition of the performing arts and, indeed, the arts themselves, is twofold: first, I am anxious to discover how they are perceived in the eyes of the world at large, and in this case how our musicians, actors, dancers and singers are perceived in the eyes of the outside world; secondly, I am anxious to examine the very latest figures on attendances and on income generated from box office receipts.
There can be very little doubt that our artists are perceived by the outside world with admiration and even envy. Wherever and whenever they go abroad, they play to packed and appreciative audiences. One or two examples immediately come to mind: the recent hugely successful tour of Japan by the London Symphony Orchestra; the equally successful tours of Welsh National Opera, the Royal Ballet and English National Ballet in the United States; the triumphant tour of the Royal Shakespeare Company in 1989 when it played performances of "Titus Andronicus" in Paris, Madrid and Copenhagen; and finally, the huge success of English National Opera only last year in the Soviet Union, where it was the cultural mainstay of the British trade month. By any standards these great companies, and many others who follow them abroad, must be counted a huge success.
My conclusion is that while the Japanese and the Russians may not always understand the language of Shakespeare, the language of the arts is nevertheless a universal language. It transcends geographical boundaries and considerations of race, colour and creed. I believe that it is in every way as effective as any diplomatic initiative in building bridges and communicating across the divide.
I turn now to the subject of the attendance figures, which is the second part of my yardstick for assessing the health of the arts. I need only say that in the year 1989–90, which is the last year for which figures are available, 45 million people attended the theatre in the United Kingdom. Box office receipts from the theatre in that year amounted to £17.5 million. In the same year 2.7 million people visited the opera and generated box office receipts of £25 million, while dance generated box office receipts of £11 million. These must be impressive figures by any standards.
Box office considerations lead naturally to the issue of the funding of the arts. We live in a plural society and therefore it is hardly surprising that our funding has the same plural complexion. Underpinned by central government but with handsome contributions of almost £200 million from local authorities,
592
supplemented further by the private sector in its many guises and occasionally by European money from Brussels, that partnership is surely the way forward for the arts.
I should like to take this opportunity to correct a widespread misconception; that the arts, like defence, environment, health and education, are a bottomless pit. They most certainly are not. A little money in the arts goes a long way. It would be possible to calculate with some precision the additional sum of money required to resolve some of our present difficulties and the deficit situations of some of our client companies. By increasing their revenue base from that additional sum of money, we could ensure that those deficits were eliminated over a three-year period.
Despite those difficulties I firmly believe that prospects for the arts have never been more encouraging in this final decade of the second millenium. I say that because the range and depth of artistic talent in this country is second to none, both within the single market and without it. The increased accessibility of the arts is playing a vital part in their popularity, and that increased accessibility will be further enhanced as a result of a deregulated broadcasting system.
If that prediction is correct and if, as I am sure your Lordships will accept, administrations and societies are assessed in an historical context, not by the battles that they win or the economic miracles that they achieve—important though they are—but first and foremost by the contribution that they make to civilised values and civilised life, then we shall enter and greet the third millenium with confidence and the dawn of a new era.
6.14 p.m.
Lord Birkett: My Lords, it is a privilege and a great personal pleasure to be allowed to be the first to congratulate my noble friend Lord Palumbo on his maiden speech. I hope that all noble Lords will join with me in saying to him what an amazing, articulate, interesting and informative speech it was. As he himself said, it is a convention that a maiden speech should not be controversial. There is no convention that says that it should be inspiring; I thought that it was.
My noble friend's vision of the arts comes from his enormous experience in them. The nation already owes my noble friend a great deal. A large number of the greatest galleries in the land owe much to his wisdom and guidance. I am happy to say that I believe he regards landscape as one of the arts; Paines Hill Park would not have got off to the start it has without his guidance. It is well known that he is a notable private patron of the arts; that is not possible for some of us nor encouraged by others. Therefore it is very nice that this stock of wisdom and goodwill towards the arts should be now available to the nation because he is chairman of the Arts Council. In a slightly more sinister tone I must say that it is also very nice that we have the chairman of the Arts Council in your Lordships' House. It is so much easier to get at him!
It is a convention to say to a maiden speaker that we hope to hear more of him. In the case of my noble

593
friend Lord Palumbo I am sure that the House will agree that we want to hear a lot more of him on frequent occasions.
In the time remaining to me I should like to ride three hobby-horses. I shall ride them at a gallop because I do not wish to overrun my time any more than do other noble Lords. The first touches upon the introductory remarks made by the noble Lord, Lord Annan, to whom I also offer my congratulations for introducing the debate. He referred to the capital problem; the lack of any capital fund for the arts. Many speakers touched upon the need for capital both for maintenance and for new buildings.
A solution to the problem would be possible if the nation were to accept the idea of a national lottery for arts, sports and the environment. We recently had a complete debate on that subject in your Lordships' House so I shall not weary your Lordships for long. If the calculations which seem to be generally accepted are true, that when up and going a national lottery could produce a sum of around £1 billion a year towards arts, sports and the environment, and indeed other charities, many of our capital problems could be solved
The next hobby-horse I ride I would not dare to ride without the first. It always seemed to me that in London the Lyric theatre—by which I mean dance and opera—-needs more stock of buildings. As a nation we already have the Royal Opera House, and the English National Opera leases the Colosseum. However, with the wealth of national companies and the wealth of talent that we have, the Theatre Royal, Drury Lane and the Lyceum should be available to the nation. Although it appears to be a smaller issue, the Kingsway Hall —probably the finest recording hall in Europe—should be available to the nation also,
It is not an easy matter to acquire these premises; in many cases they are in private hands and the owners may not wish to part with them. It would be unthinkable even to propose it were the thought not at the back of my mind that a serious capital fund could enable such a thing to happen if circumstances led us in that direction. Put together those theatres could form a centre for the performing arts in London which would set us off into the 21st century in a way that we cannot at the moment look forward to.
My third hobby-horse is quite different. It is a subject that I introduced into your Lordships' House only a few days ago in the short education debate introduced by the noble Lord, Lord Donaldson. It concerns the new school for the performing arts which is to open in Croydon in the autumn and of which I am president. I make no apology for introducing the matter again because it is a piece of thoroughly good news for the arts. From time to time we can do with good news in our debates. On the last occasion on which I introduced the subject I was taken to task by the noble Baroness, Lady David, who said that I could expect very little support and encouragement from those Benches for a CTC. In fact it is technically a CTCA—a city technology college of the arts. She said that she would look very carefully at the career of the school and of the schools around it in Croydon. I got
594
a slightly sinister impression that my school would be looked at and its success judged in relation to the success and careers of others schools in Croydon.
I intend to take no responsibility whatever for the other schools in Croydon. The point about our school is that it will provide an education in the performing arts for 14 to 18 year-olds in a way that has never been done before. It is fulfilling an educational need which in my experience has not been addressed before. It will give the students at the school a real experience of the arts world, not merely of the performance, but the technology, business, legal and union backgrounds. It will give a view of the entire world of the arts which people who intend to enter the profession must have if they are to make a success of it.
Whatever our views may be on the maintenance of schools in general and the provision of budgets for them, I do not hold with any attitude that, because of drawbacks in other educational departments, looks askance at a bright and encouraging school which is about to start. I expect to find universal encouragement in your Lordships' House for this school and its future.
6.22 p.m.
Viscount Mills: My Lords, in November 1989 the Arts Council recognised the urgent need to support the development of dance in the 1990s, and indeed extra funding has been made available to certain sectors. Yet, as we have heard from several noble Lords, everyone in the performing arts today will tell you that the overriding concern is money. Dance is no exception. Despite its high artistic standards in this field, Britain lacks the resources, theatres and regional infrastructure possessed by many of its European counterparts. Our dancers suffer from bad conditions of service and low pay and have to contend with inadequate facilities. Sufficient funding is vital to prevent at worst the disappearance of entire ballet companies. In 1989 the Northern Ballet Theatre very nearly faced such a closure and less severe financial problems have resulted in many companies having to cancel or postpone tours and productions.
However, it must be emphasised, as my noble friend Lord Crickhowell has already said, that continuity of funding is also important. To allow any coherent arts policy to be implemented and to ensure that the traditions and the evolution of dance can be continued, there must be some degree of stability and reliance of funding. Dance, like all the performing arts, has to depend on multifarious sources of income embracing ticket sales, sponsorship and government subsidy, all of them unpredictable.
It is to be hoped that dance companies are making every effort to maximise efficiency and revenue and to keep expenses down. During a time of recession sponsorship is more difficult to obtain as the same number of prospective beneficiaries chases a reduced number of sponsors who may themselves have less to give. Inevitably, there is a greater dependence on whatever government subsidy is available, both locally and nationally. The allocation of funding by the Arts Council continues to cause considerable

595
controversy and this problem, we hope, is being addressed at present. Let us hope that a solution is found which allows an appropriate distribution of funds and which also ensures that the performing arts, such as dance, are granted the continuity of funding that is so vitally necessary. Failure to do so could result in the complete loss of artistic traditions built up, in the case of classical dance, over more than 200 years. Already a drop in standards in dance is becoming apparent.
I have argued for the need to maintain an on-going and adequate level of funding for professional dance companies. No less important is continued funding for training young dancers. In the past discretionary grants from local authorities were available for this purpose, but at present, excluding the Royal Ballet School for which separate provisions are made, award of these grants has become increasingly rare. This prevents talented children, whose parents lack sufficient financial means, from pursuing dance as a career.
Obviously the standard of dance performers is largely dependent on the quality of the training they receive. We are indeed fortunate in this country to have developed a system of classical ballet training embodied in the Royal Academy of Dancing syllabus which is now recognised in 48 countries throughout the world. The quality of the dance training in this country has meant that our young dancers and dance teachers are in considerable demand. However, the lack of opportunities here has meant that an increasing number are forced to seek their first jobs abroad, frequently in other EC countries. This poses a potential future problem. At present steps are being taken by the Council for Dance Education and Training to have dance teaching qualifications such as those offered by the Royal Academy of Dance recognised as national vocational qualifications within the UK.
When that has been achieved national recognition would ensure the free movement of qualified British dancers and ballet teachers throughout Europe as well. Failure or delay in recognising these dance qualifications could result in other EC member states introducing alternative standards which would inevitably restrict the freedom of movement of British qualified dancers and teachers in the EC.
6.28 p.m.
Lord Jenkins of Putney: My Lords, like many other noble Lords who have spoken, I wish to congratulate the noble Lord, Lord Annan, for selecting this subject for debate. In doing so, I regret that he thought it necessary to give his distinguished blessing to the dreadful current usage of "the performing arts". The arts do not perform; people perform. If you must, the subject can be described as the "performance arts". I may be fighting a losing battle but, so far as I am concerned, it is never correct to refer to "the performing arts".
This country is no longer at the top of the league of material significance. In the Gulf we are concerned
596
with blowing up ourselves and everyone else. However, the French are stronger than we are and they take a much more sensible view of their responsibilities. The one area in which we stand high is the one which we neglect. To take a purely materialistic view, the arts are a plus in our balance of payments. Heaven knows, we need that plus!
However, our major theatrical and operatic companies survive by cutting corners. Our minor organisations in many cases are either collapsing or are on the verge of doing so. The state of the buildings which house marvellous performances is often so bad that if the legislation covering factories applied to more than one of them, no one would be allowed to work in them.
Those of us concerned with the matter have been struggling to persuade successive Governments to provide sufficient funds to enable the job to be done well. When I passed a not uncomplimentary remark about this Government the other day, I meant to say that they seemed to have got the message. I was not suggesting that, like Dr. Johnson's dog, they may not be doing it well, but the remarkable thing is that, considering their economic predilections and confusions in that area, they are doing it at all. We must be very grateful that they have seen the light. There are some exceptions to this rule, but in general the notion that there is an area in which the Government are concerned—this area is perhaps a most important area; at least as important as any other area in the performing arts—is now generally accepted.
The theatre is the art in which we have always excelled. Our performers, writers, composers, designers and directors are admired the world over, and deservedly so. The British theatre is also a hard-working and hard-earning industry. In the crudest economic terms it has attracted tourists—not many of them come to watch us play football or cricket, do they?—and has brought related earnings into Britain. Those earnings are not negligible; they are big league. I simply do not believe that people who have won us so much admiration and respect and earn us so much money, even though the profits may not show on each individual theatre's balance sheet, have suddenly all become inefficient wasters.
It is precisely at a time like this, when theatre activity itself is perceived to be at risk, that we need to look beyond the obvious, the most newsworthy problems, and lay sound foundations for the future. My noble friend Lady Birk has mentioned the Theatres Trust. I have been involved with that organisation ever since its foundation. Now that the Arts Council seems no longer to be taking much interest in buildings, I think it must work with the Theatres Trust—the two organisations will work well together—in trying to make sure that we do something about the essential basic organisation. We cannot have good theatre if there are no theatres. There is a danger of neglect in this area. I am glad to say that the Theatres Trust is expanding its interest and is being increasingly recognised for so doing.
I have another small pat on the head for the Government. They have recognised the existence of

597
the Theatres Trust, and that organisation is now accepted by the Government as being a valuable organisation. I hope that in future the theatre buildings will be better looked after than they have been in the past. That applies equally to whether the building is currently privately or publicly owned. Theatres must be preserved, and the question of their ownership is quite immaterial.
We have seen the theatre make wonderful progress in recent times. There is amazing potential. As the noble Lord, Lord Palumbo, said in his most notable maiden speech—I join other noble Lords in congratulating him—there is an opportunity here which must not be neglected. Some theatres are now reappearing. The Hackney Empire, for example, is now in productive use. It was sometimes called the "sleeping beauty" and one sometimes wondered whether this sleeping beauty would ever reawaken at all. We must not say that because a theatre goes through a bad patch it is therefore gone forever and we need not worry about it. We must worry about all the theatres with which our country is so well provided.
Theatre is a complex organism in which every part depends on every other part. Scale is important; so is continuity. The greater the pool of skills and the better the distribution of venues, the healthier the activity will be. If any part is neglected, or if the continuity of tradition is interrupted, the whole fragile apparatus is put at risk. It certainly cannot be assumed that when we finally decide to restore support the activity and energy will instantly reappear. It is therefore vitally important that we keep going.
When I was Arts Minister 15 years ago I reminded the Cabinet of what Jennie Lee had said was needed. She said it was coherence, imagination and generosity. What has been said in this debate makes it clear that these three necessities are still not entirely unrecognised. There are those who see the necessity here. I hope against hope that the Government will not exclude throwing money at the problem. This is something which everyone is always instructed not to do, but as concerns the arts it seems to me that throwing money at them is much more productive than recrimination or advice.
6.36 p.m.
Lord Hutchinson of Lullington: My Lords, the performing arts attract 17 million people a year. Pre-eminently they depend on the genius and commitment of the artist, rich in talent, poor in reward. Their sustenance and support depend on the wisdom, efficiency, expertise and independence of the Arts Council. Are they safe in its hands? I must confess to some doubt, although I hasten to assure the noble Lord, Lord Palumbo, that I am a lifelong opponent of capital punishment.
Today the council seems but a shadow of what it was when I knew it under the noble Lord, Lord Goodman, the noble Lord, Lord Gibson, and the only chairman of the past five not to come to this House, surprisingly, Kenneth Robinson. The council has slid off now to the obscurity of Great Peter Street,
598
insulated from the artists and the public which it exists to serve. No longer are there those rigorous, lively, monthly debates between department heads and panel chairmen and councillors that were the catalyst of our decisions, as the noble Lord, Lord Allen of Abbeydale, would say, in our age. Now the council communes with the chief executive alone and its decisions appear to come down from the Government.
"It's my duty", says Mr. Mellor, "to ensure proper distribution of funds". "I have decided", says Mr. Luce, "that the bulk of clients should go to regional boards chaired by my nominees; and the council's role is to be purely strategic", formulating what he calls a national policy for the arts—ten boards replicating 10 times the decimated and economical expertise of the council. There is no audible squeak about all this from the unseen and unheard councillors, of whom two appear to be practising artists and eight businessmen. I fear that this emasculated council will become a body of bureaucrats liaising, assessing, monitoring, reporting, targeting and pumping—pumping hot air.
This year's annual report of the Arts Council is not encouraging: a glossy format with pages of upbeat and anodyne articles. Of the revolution in the administration of the arts, the anxieties reflected in the resignation of Luke Rittner and the RSC's abandonment of the Barbican there is no mention. Of the desperate plight of regional theatres, the demise of Kent Opera and the National Opera crisis there is not a word. The crucial question of local authority finance is ignored. As for sponsorship in a recession, there is no place in the report. What do we find?—a fine photo of the noble Lord with Mrs. Thatcher, hardly, I fear, at arm's length.
The national arts strategy will,
"identify the shape and feel of the arts in the period leading up to the millenium … seeking ways to harness and energise the creative talent of the nation".
It will be,
"a 10 year programme for the refurbishment of the cultural fabric of the nation, including the cathedrals"—
the cathedrals, my Lords; the Arts Council? I note that the council's new premises were indeed taken over from the Society for the Propagation of the Gospel and that, ironically, they carry on the door a statue of St. Luke. Surely it is the deficits, not the cathedrals, that need to be addressed by the Arts Council.
One can have a national strategy for bureaucrats, but for the arts, never! The performing arts are unpredictable; genius and talent rise and fall, succeed and fail, without respect for packaging, marketing or cultural apartheid. Arts organisations need and want advice, assistance and, above all, the protection of a central independent council in the role of the artists' champion, responding to ideas and able to stand up to central and local political pressures. It must share in the evolution of work, it must have an international dimension and it must be housed in the cultural capital of the nation, which could so easily become the cultural capital of Europe and possibly even of the world.
I read that the translation of the new Minister for the Arts from Chief Whip to the arts is to him like moving from running a prison to running a brothel.

599
That sounds to me as if we can expect an improvement in arts funding. I welcome the perceived virility of the new Minister. I beseech him through the noble Viscount who will reply to the debate to give the noble Lord, Lord Palumbo, a hands-on job, funding all the principal performance arts organisations, to give the council a role which will continue to attract staff and council members of the very highest calibre and, above all, to restore to it its independence and its arm's length stance.
6.43 p.m.
Lord Gibson: My Lords, after listening to the noble Lord, Lord Hutchinson, I feel a little tame and rather like the tail end of the Lord Mayor's Show. I cannot help thinking that it was a little unfortunate that the noble Lord, Lord Palumbo, spoke before the noble Lord, Lord Hutchinson, and that he would no doubt have wished, if he had been otherwise placed, to say something in reply and perhaps break the convention of abstaining from controversy in a maiden speech. However that may be, we are grateful to the noble Lord, Lord Annan, for the opportunity of this debate. I apologise for my absence at the beginning of the debate. As it happens, together with other Members of your Lordship's House, I had an appointment with the Minister for the Arts, so perhaps I may be forgiven. I therefore missed the speech of the noble Lord, Lord Annan, and half of the speech of the noble Lord, Lord Crickhowell. I shall remedy that by reading their speeches in the morning.
I listened with great interest to the speech of the noble Lord, Lord Palumbo, and I congratulate him on it. He did not deal with many of the issues raised by the noble Lord, Lord Hutchinson, but he hardly could have done so uncontroversially. It was an excellent speech and I am sure we shall hear him on many occasions. We should be grateful to him for taking on a fascinating and very difficult job which I did in the 1970s when it was a great deal easier than it is today.
The noble Lord, Lord Annan, dealt with the problems of the national companies and so I shall not deal with them. However, I should like to emphasise one point. Although we urge the necessity for plural funding we must recognise that funds from the private sector are inevitably variable. They depend not only on the state of the economy but on the taste very often of the heads of those institutions which make the grant. In the case of our permanent arts companies, the great national companies—the orchestras and so on, the landmarks of our artistic scene—private sector funding, because it is variable, is appropriate only as a contribution to variable costs. If the nation wants these things, their fixed costs must be met by the state. What can then be left in part to private funding are the variables—programming, new productions and the like.
There is a great parallel here with the museums, where the cost of maintaining the buildings and conserving and presenting the collections should be shouldered by the state, leaving the private sector to help with acquisitions and exhibitions. To my mind, the state's responsibility for overheads should be
600
indexed for inflation and repairs and maintenance should never be allowed to fall into arrears as they have been. Only the variable costs should be subject to economy in bad times.
I want also to say something about regional affairs. Nearly a year ago we debated the proposed restructuring of arts funding and the devolution then envisaged. I believe that the committee to advise the Minister on what should be funded centrally and what regionally by the proposed regional arts boards is still sitting. In that debate, while supporting the principle of devolution, I urged that the Arts Council should not lose all its regional clients but fund directly probably some 40 of the most important arts companies in the regions, especially those doing much work outside their own regions and above all those which also work abroad and have an international reputation. After that debate I was encouraged to believe that this would be the case but I am not sure how this reorganisation is going—whether the Minister's advisory committee has reported and whether any noises are coming out of it. I hope that the Minister will have some information for us this evening.
What I do know is that those in charge of the most important regional companies are very apprehensive about being devolved to the new regional arts boards. I should like the Minister to tell us what consultation there has been with the major revenue clients other than the regional arts associations before establishing the criteria for devolving those clients.
Your Lordships may recall that the Minister for the Arts—then Mr. Luce and subsequently Mr. Mellor—laid down criteria for devolution. They were, first, that excellence in the arts would be maintained and enhanced. We can all subscribe to that; it is like saying that one is against sin. The second criterion was that regional structures must be capable of assessing and monitoring the organisations devolved. What is crucial is that the officers doing the assessing should have the necessary experience to assess what are in effect national companies located in the regions. Those bodies deserve to be assessed by national criteria. In my judgment that is best done at national level. They deserve the close attention of the best officers in the Arts Council, and it is no good expecting that all 11 regional arts boards will be staffed by officers of the experience which should be available at the centre. Furthermore, the Arts Council itself will be gravely handicapped if its own officers are not in direct contact with what is happening in the regions. That is a very important point.
I have talked to the chairman of the Hallé Orchestra, which, though its home is Manchester, is certainly a national orchestra. He tells me that the orchestra gives more concerts outside Manchester and the North West than inside. Last season it gave 95 concerts outside and 75 inside. It receives much more local authority support outside the North West—last season, 042,000—than inside—last season, £334,000. The fear is that the local authorities in the North West, all under pressure to cut expenditure, will say, "We've got to give to the new arts board north west so why

601
should we contribute also to the Hallé directly?" The arts board north west may well say, "Why should the Hallé spend 60 per cent. of its time and by implication 60 per cent. of our arts board money outside the North West?" And finally the arts board north west may well say, 'We support two orchestras, Liverpool and Manchester. Each spends less than half of its time in this region. Let's support one, and let it give all its concerts in our region". To regionalise such orchestras as the Hallé seems madness to me. I hope that wisdom will prevail.
Finally, I have just enough time to say a word about Ministers for the Arts. In my five years at the Arts Council I reported to four Ministers, two Conservative and two Labour. While broad strategy on funding was constantly discussed, none of them ever suggested to me how much or to whom grants should be made, let alone gave instructions. Is this changing? I noticed, as did the noble Baroness, Lady Birk, Mr. Mellor saying he would concern himself with the detailed application of the enhancement grants, I suppose he thought that, having argued with the Treasury for extra cash, it ought to have been spent in accordance with his argument. I just wish that he had trusted the Arts Council: he could have done so, and also trusted the basis of the system.
I believe I detect a less hands-on approach with Mr. Renton. The fact is that, though timely in national terms, the arts grant has such a high profile that Ministers for the Arts are bound to feel concerned, and they are tempted to interfere. When they do so the arm's length principle goes for nothing. Ministers for the Arts must stick to broad policy and keep their hands off the decisions for grants; otherwise the Arts Council will become an advisory body—and who will want to serve on it then?
6.51 p.m.
Lord Elibank: My Lords, we are invited by the terms of the Motion to consider problems affecting the performing arts. I should like to spend a few minutes considering two problems which have caused me concern. The first is the appropriate amount of government subsidy to the arts. This seems, in the eye of the public, to be assessed by relating any increase that the Government offer in the total grant to the grant which was offered in the previous year. If it is an increase in excess of the cost of living the Government are praised; if it is below they are generally abused; but the essential base is last year's grant.
It is very difficult from that sort of base to assess whether this country is in fact putting enough money into the arts as a whole compared with our neighbours. It is much easier to make a comparison, say, with the armaments industry and the outlay on armaments of our rivals and possible enemies, in percentage terms, than it is to make the same comparison in arts expenditure. Of course, the Government's outlay is not the only one. As the noble Lord, Lord Palumbo, said in his most excellent maiden speech, the local authorities themselves put in something like—I think I am quoting correctly—£200
602
million. Of course, a large part of that has come directly or indirectly from the Government, and so comparison is difficult.
It is fairly easy to compare specific artistic projects. The noble Lord, Lord Annan, referred to the Royal Opera House which compares its receipts from governments with what other major opera houses in Europe receive from their governments. Comparisons show that it receives less but that it puts on many more performances. However, that sort of direct comparison is much more difficult in other forms of the performing arts. Nations vary in their enthusiasm and in the tradition they have in respect of individual arts. We might say that so far as Britain is concerned the theatre is perhaps our chief glory. We might say with some confidence that our theatre is as good as, and probably better than, any in the Western world. The Italians might make the same claim for opera and the Germans would certainly make it for all forms of music.
I can remember when I was stationed in Essen for three months—Essen being a not particularly distinguished town in the Ruhr—that the town managed from its own funds and from funds given by the government to put on a continuous programme of opera right through the winter and at the same time to maintain a symphony orchestra which gave regular and very high quality performances. I doubt whether there is a provincial town in this country which could equal that. It merely illustrates the priority given by the Germans to music. If we are to put money into the arts should we, as the military preach, reinforce success, or should we spread the arts subsidy, as we have, fairly thinly over all our performing arts?
The second problem concerns the number of people who actually attend artistic performances. The Arts Council report contains the results of a study which was either commissioned by it or adopted by it. The report states that about 25 per cent. of the population attend the theatre. That is a very reasonable and acceptable percentage; but the percentage of those who attend opera and ballet is a little over 6 per cent. I am a confirmed opera lover but I wonder how far we can justify the enormous expenditure in subsidies which we have to make to maintain our operatic standards at their existing level. It is true that the same report shows that operatic attendances have increased by 15 per cent. in the past four years. That is a source of great encouragement, but of course it is from a fairly low numerical base.
Those are two of the problems. I believe that we must try to look ahead with a mixture of enthusiasm, hope and faith in order to justify the expenditures we are now considering. Education is one of the main grounds on which we should invest in the arts. The noble Lord, Lord Annan, mentioned a rather fine form of reinforcing the life force. I believe that we educate our young because those of us of a certain age have derived enormous pleasure all our lives from the arts and we desperately wish them to have the same opportunities. For that, I for one am certainly prepared to pay my taxes.
Lastly, I should like to mention the element of national pride. There are certain things—buildings,

603
perhaps, rather than performances—in which the whole country can take a certain pride. For example, the National Opera House in Sydney is a source of great pride to all Australians, most of whom have no intention of ever going inside it. The same is true of our Royal Opera House. It now badly needs refurbishment and enlargement. I am not sure what stage the negotiations have now reached or whether they are faltering in any way for lack of funds; but if they are I most earnestly exhort the Government to step in and offer whatever funds they can make available.
6.58 p.m.
Lord Donoughue: My Lords, I must join others in congratulating the noble Lord, Lord Palumbo, on a remarkable maiden speech. It was so fluent and so authoritative that I feel he really deserves to lead a more effective Arts Council. I had some sympathy with the delightfully gentle observations made by the noble Lord, Lord Hutchinson. We have to thank the noble Lord, Lord Annan, for opening the debate in such a characteristically brilliant way. I opened a similar debate some four years ago. I am not sure, I must confess, whether much has changed. However, I am sure that the noble Lord will have more effect: he is absolutely right in saying that many difficult choices lie ahead. His point on renewal capital is central to the problems that exist.
However, because we have to make difficult choices, it does not mean that they should be made against a tighter financial background. They should be made against the background philosophy of fundamental support for the arts. We should not yield an inch on that.
British society is blessed with some of the greatest artistic performers in the world, but it is always reluctant to pay for them. By international standards, British governments, both central and local, are mean. Cambridge has been mentioned. Edinburgh is notorious. And there are a number of others. Many of the most mean are accidentally Conservative local governments. The Government could therefore take a lead and ask them not to penny pinch.
British companies are less mean, and they are improving. The honours system could be used even more to encourage support for the arts. I look forward to a time when donations rank equally with those to the Conservative Party in securing admission to this House.
British individuals are mean. Speaking personally, as someone who has been connected for over a dozen years with a leading London orchestra in trying to raise funds, I am bound to say that the established rich in Britain, not unconnected with this House—what is called old money—do not give. The turnout today is quite good, but it is not as impressive as that for Monday's debate on racing. That debate saw an excellent turnout. I wonder, however, whether it shows a correct sense of priority.
Sponsorship and the giving of money in Britain now depend heavily upon two sources—Japanese
604
firms in this country, to which we should offer great appreciation, and, as always, the Jewish community. Without them, British music would be in serious trouble. Our society, our Government and our education system influence values. They must give a lead and set an example so that giving to the arts is seen as a positive good and a social norm.
The Government's proposals for delegating support for the arts to the regions were mentioned by the noble Lord, Lord Gibson. The Government have made four major exceptions: the two opera companies, Covent Garden and the English National Opera, and the two leading theatres, the Royal Shakespeare Company and the Royal National Theatre. Those companies are described as national flagships because of their national and international standing. I would not argue against that. However, I should like to ask why no orchestras are described as flagships. It is very damaging to our great orchestras that they should appear to be denigrated in that way. One accepts that it is a problem which occurs in any flagship system. But there are several orchestras in London of great national and international reputation. No other city in the world can compete with London as a centre of orchestral music. Berlin or New York cannot compete with what we have here. It is a strength that we should enforce and not denigrate.
Our orchestras travel internationally. The first example of excellence given by the noble Lord, Lord Palumbo, was the London Symphony's triumphal tour of Japan. If one looks at the league table internationally, our best orchestras are as good as, and probably rank higher than, our opera companies. To classify them merely as "regional" damages their ability to attract great artists and great conductors. The great conductors of the world often accept less money when they come to London and would not wish to conduct a regional orchestra.
I look forward to hearing the noble Viscount's comments. We note that the new Minister for the Arts is reconsidering the policy of delegation. I ask through the noble Viscount on the Front Bench that the Minister should reconsider a curious anomaly. I wonder whether it would not be logical to designate two orchestras as flagships.
7.5 p.m.
Lord Goodman: My Lords, I speak as the most veteran member of artistic administration. When I reflect briefly on the jobs that I have held, I must have a high degree of responsibility for the chaos that now exists. However, I have not come here to apologise. As a veteran I am very pleased that I have been able to sit here since 2.30 p.m., waiting to hear Lord Palumbo's speech. I regard that time as being well spent. His speech gave me a feeling of confidence that the arts are in safe hands.
A number of points have arisen in the debate that require more than seven minutes to deal with, but I should like to mention two matters of some importance. One of them was illustrated with characteristic vigour and colour by the noble Lord, Lord Hutchinson. He referred to the quite appalling

605
attacks that have been made on the independence of the Arts Council. It is frightening to discover that more recent Ministers for the Arts have not had the least idea of the basic foundation of the Arts Council. The dual principle of independence was a novelty to them and, having heard about it, they were outraged that it should exist.
The Arts Council has never been popular with the Civil Service and when the Civil Service finally detected that it had escaped the leash and was free to spend the money as it liked, it determined to do something to stop it. I do not think that there has been a more stupid arrangement than that which delegates the responsibility for distributing the money, and for watching over and administering the arts, to 10 or 11 regional authorities. If the slightest moment of reflection had been given to that situation, it would have been apparent that it could only mean a thorough decline in artistic standards.
The Arts Council is one of the great British institutions and we ought to be horrified at any notion of dismantling it. The Arts Council has a vast number of very well informed committees to advise it. There are committees for every form of artistic discipline. Where will the 11 new regional authorities get the committees? They do not exist. People of the quality of those who have willingly volunteered to serve on the Arts Council cannot be multiplied by 10, but no one has thought of that point. There has obviously been a great determination to curtail the independence of the Arts Council.
Recently I had the advantage of speaking at some length with the new Minister and he inspires me with a good deal of confidence because he told me that he was reflecting on what to do about the delegation scheme. He conveyed to me, without saying so, that he was minded to make considerable changes in the proposals. That is the most encouraging thing that I have heard for a long time. I have been greatly exercised by a feeling that an institution that we had all served, respected and admired, was in danger of being dismantled in favour of 10 new organisations that have no track record at all and which could not hope to have the facilities that have been developed by the Arts Council over the 50 years or so that it has been in existence.
The statesman from Wales expressed criticism that the chairman and members of Arts Council boards were not paid. It would be very wrong if they were paid. There is already enough criticism of the expenditure of the Arts Council. It is required to restrict expenditure as much as possible. If 11 new chairmen are paid, the cries of rage that will arise from the deprived beneficiaries cannot be imagined. I earnestly hope that any such notion will be dismissed.
I feel that the emphasis on money is just a little excessive. The most important consideration in the arts is quality. Quality cannot be bought with money. Of course, that is not to say that I believe you can run orchestras, theatres and ballet and opera companies without it. However, money should not be allowed to become an obsession. In my view it has recently become an obsession so far as concerns the Arts
606
Council and its supporters. Everywhere you go, everyone is talking about how the extra money can be found.
I should like to give a word of warning about the suggestion for a national lottery. If the Arts Council really thinks that if we had a lottery it would be the first beneficiary, it had better think again. During the debate which took place in this House on horseracing just the other day, it became clear that racing has its eye on such a pot. If we stop to consider the number of people who have their eyes on that pot, it is obvious that the Arts Council must look for other sources.
We must not do anything which will enable the Arts Council to consider itself alibied in relation to subsidising the arts. A lottery is another form of alibi. A form of alibi which was very useful but excessively used was the question of private and commercial funds. I am a great believer in an alternative source of support for the arts other than from the Arts Council. There must be a kind of court of appeal for someone who has failed to get his orchestra, his novel or his play subsidised by the council. Such a person should at least be able to apply to another organisation which could provide him with private moneys. That is a most important consideration. However, again, it has become an obsession with the Government—and not this Government alone—who are constantly pointing out the vast resources which are available from commercial institutions. If you examine the matter closely and scientifically, such vast resources do not exist. It is quite certain that you could not substitute private funds for the public funds which are submitted because there are just not enough of them.
I should like now to give your Lordships one instance of the importance of public subsidy in relation to the theatre. I visited my first West End theatre at the age of six. It was a play called "The Garden of Allah". I do not believe that anyone present in the Chamber is old enough to remember it. However, a study of that time would show that the theatre was indeed in a deplorable situation. Almost every play which was produced was set in upper-class drawing rooms and dealt with the scandals that took place in them.
I was present when, for the first time ever, the West End theatre saw fit to put on a Cockney play. It was called "Low Tide" and was written by an East-End bookseller. It was a remarkable play. However, it took years before the theatre was prepared to make such a change. In the hands of commercial interests, there is no doubt that the theatre was in a sad and unsatisfactory state. If one studied the theatre lists of that time, no evidence would be found of any Shakespeare play being presented. I do not want to suggest that all valuable dramatic literature was expelled from the scene. Of course, Bernard Shaw works went on being produced after a brisk exchange with the censors. Similarly, Ibsen was played after an equally brisk exchange. However, the notion that the theatre was an adequate instrument to portray the dramatic talent of this country is completely fallacious.

607
I believe—I hope rightly—that the Arts Council is now in very safe hands. I urge the chairman of the council and its members to protect to the last drop of their blood, and to the last pound in their bank account, the liberties which we have extracted with great difficulty and which the present Government, not brazenly or wantonly, but out of sheer ignorance, are neglecting. The Arts Council's dual policy, which has kept it going and caused it to be admired all over the world, has been that there should be no governmental interference with the council's decisions and that the function of government is merely to supply money.
The report in question is an abominable document to many civil servants. But I believe that this most dangerous thing which is about to happen is the product of the imagination of a civil servant. The line between the Arts Council and civil servants is not a strong one. I believe that I have addressed your Lordships for more than seven minutes. In the circumstances, I should like to say once again that I wish the noble Lord, Lord Palumbo, every success. If the debate has served the purpose of awakening him and the other members of the Arts Council to the dangers which exist, it will not have been in vain.
7.15 p.m.
Lord Auckland: My Lords, about two decades ago I moved a debate in this House on a report which had just been published on the Arts Council. Having heard the quality of speeches tonight, I can only say about myself, "What an upstart"—especially as I coined a phrase at that time "Penicillin before Puccini". I hope that that does not sound too philistine. However, as I have a special interest in both the health service and the arts it is a question to some extent of priorities. There are 60 million people in this country. Penicillin is a life saver; of course, Puccini is not a life saver, although life without him would be very dull.
I take the point made by the noble Lord, Lord Donoughue, that the London orchestras are first-class. I entirely agree with him. I have one particularly good friend who used to be a leading violinist in the London Symphony Orchestra. I too believe that our orchestras can hold their own against those of any other country. The same principle applies to the English National Opera. Anyone who has seen its performance of "Hansel and Gretel" will agree, certainly in the musical sense, that it was a treat from the first to the last bar. The standards achieved in its music, although not always in its settings, are absolutely first-class.
I should like to say a few words about the regional arts. There is a country called Scotland. The Perth and Pitlochry theatres, with which I am mildly acquainted, have put on some absolutely first-class shows. They only receive a grant of about £360,000 per year. The Pitlochry Theatre in particular presents plays of exceptionally high quality. Those who know Scotland well will agree that it is very much a tourist area. Indeed, a large number of overseas visitors go to Perth and Pitlochry and of course to other parts of Scotland. I should like at this stage to put in a plea for the
608
Scottish National Orchestra which has toured widely, as has Scottish Opera, which has some marvellous singers. Mention has already been made of Wales, and everyone knows that the young person who won the Young Musician of the Year competition not so long ago came from Wales.
I believe that we should also take the regional theatres into consideration. I am especially concerned with the Thorndike Theatre in Leatherhead which has survived through some dire times and which has received very generous financial benefaction from the Kenwright family. The theatre has now been revamped and the company puts on high quality productions before they are transferred to the West End. The same applies to our choirs. I should like to put in a personal plug at this stage because my wife has sung in our local choral society in Surrey for 20 years. Last year the society visited Germany and gave two concerts in Cologne Cathedral. Very shortly the choir from Cologne is to visit Surrey to sing with our society in Mendelssohn's great oratorio, "Elijah". I mention that because I think that it is often believed that the finest singers come from France, Italy or Spain. That is no longer true. I should be the last to denigrate singers such as Placido Domingo or José Carreras, but again I wish to be personal and bring up names like Gwyneth Jones, who has sung all over the world. We are a musical country and that should be recognised when we consider the arts.
Funding is rather like the diagnosis and the cure: we all wish to see almost unlimited money going to the arts, particularly the regional arts. It is not only Covent Garden and the English National Opera that give pleasure. Many people will have seen Opera for All, the group which travels all over England, Scotland and Wales to districts where people cannot always reach the cities. It plays an enormously important role.
I wish to associate myself with the tributes paid to the noble Lord, Lord Palumbo, on his excellent maiden speech. Perhaps more consideration could be given to the regions because tourism is a vital aspect of funding for this country. At present it faces problems for reasons which are well known, but not all tourists go to London. They go to Scotland, Wales and the small towns. The main word in the Motion is "problems". When we allocate funds there are problems anyway. But my final plea is this. Yes, of course London must be funded. It is the capital city. But the regions are also important.
7.22 p.m.
Lord Lloyd of Hampstead: My Lords, I propose to confine my remarks to an area of the performing arts which is sometimes regarded as less significant than the traditional forms of opera, theatre and so on. It is perhaps worthy of note that we have so far heard 14 speakers and I am the first to propose to refer to films. I qualify that by pointing out that in his splendid opening speech the noble Lord, Lord Annan, was good enough to couple the film industry with the other arts in his concluding remarks. However, it is fair to say that I am the first speaker to venture to deal with the film industry.

609
The noble Baroness, Lady Birk, said in this House recently that the arts in this country are always undervalued. I do not know that I go along totally with that, but the words can be justly applied to the attitude of government towards films. The government have seemed always to take the view that there is no reason why the film industry should need support. Their minds are much directed towards the rather glitzy Hollywood atmosphere where the film industry has been totally self-supporting throughout its days.
It is sometimes overlooked that Hollywood has a vast domestic market for which to provide films. This country is in the same position as other European countries which have to wrestle with a small market. Therefore, the industry requires some form of external assistance, which is more readily forthcoming, I am bound to say, in European film-making countries than in our own.
In the limited time at my disposal I wish to concentrate on the production aspect of films which unfortunately has been undergoing a serious decline. It is universally recognised in this country that we have a tremendous wealth of talent. I am familiar with it from my former chairmanship of the National Film and Television School and the British Film Institute. One fact is clear: if we do not have a solid base of feature film production there will be a brain drain —it is already taking place—which will create a cultural and commercial disaster in this sphere.
Films are an extremely high risk industry and expensive to produce. I confine myself to what are usually described as low or medium budget films which can be said to cost at present between £2 million and £6 million. In the light of that, there is a problem which has perhaps been added to by the extraordinary speed with which one Minister with responsibility for the film industry has succeeded another. We have had 11 since 1979, which has made it extremely difficult to establish continuity. Nevertheless, a hopeful development occurred last June when the then Prime Minister decided to hold a seminar at No. 10 to discuss with leading figures in the industry the whole position of the film industry. Since then, there has been a change both or Prime Minister and of the Minister responsible for the industry. One wonders whether the same degree of commitment remains.
I ask that because one valuable development might be through encouraging British co-productions with other European producers. The Government have already backed out of any support for the Council of Europe's fund for that purpose. However, unexpectedly, this seminar produced a proposal for a £5 million fund over three years to attract European money. I was saddened to read in The Times yesterday that the DTI now appears to be pouring cold water over the scheme. I hope, therefore, that the discussions which I understand are soon to take place will nevertheless produce a fruitful outcome.
In the limited time that remains to me I wish to refer briefly to one of the main matters which emerged from the seminar: how to find more effective ways of attracting new investment. It was agreed that subsidies
610
or handouts were not wanted but that certain fiscal and financial incentives were. Three proposals are put forward for this purpose and I can mention them only briefly. First is relief for new investment in UK film production; secondly, a method of writing off expenditure incurred in producing films; and, thirdly, taxing visiting artists. There are ways in which, by reasonable modifications of the existing law, these matters can be brought into focus and considerably assist with finding investment for new films.
I conclude by saying that it is recognised on all sides that fresh incentives are needed if this vital industry is to be restored to health. I express the hope that the indications given by the previous Prime Minister's initiative will be likely to produce helpful consequences for the film industry.
Lord Bonham-Carter: My Lords, I wish to join other noble Lords—
Noble Lords: Order!
7.30 p.m.
Viscount Mersey: My Lords, first I wish to mention that fertile seedbed of performing artists, the Royal Academy of Music. This deservedly has a reputation as a centre of excellence. It is, however, very small, internationally speaking. Its total income of £3 million is equal only to the annual profit of, say, the Juilliard in New York. In Paris a conservatoire has been built that is far bigger than any of our colleges or our academy. The conservatoire cost £40 million to build and it was entirely paid for by the French taxpayer. I dare say that New York, Paris and Leipzig wish to take over London's enviable position as the music capital of the world. Thus they expand their colleges and they offer other carrots such as free tuition. So far, London is maintaining its position. But the coming of the single market in 1992 will prove a danger. It would be sad indeed if our brightest young musicians went abroad and London lost its pre-eminent position.
The Royal Academy is our oldest music college. Only rarely has it relied entirely on government money. In the 19th century all funding was private. In the 20th century the funding was entirely public only for a short period in the 1970s. Presently the Royal Academy enjoys mixed funding. The private funding comes from its own Royal Academy of Music Foundation, while the public funding comes from the Polytechnics and Colleges Funding Council. At first glance both of those sources look healthy. The foundation has raised a respectable £4.5 million. As regards the public funding, the principal, Sir David Lumsden, said:
"The PCFC have announced that, unlike most other educational establishments within the sector, the Academy will receive in 1991–2 an increase on the previous year's grant rather than suffer a reduction in funds. We are very pleased at this outcome. It vindicates the Academy's stance".
Therefore one might say that the glory of the garden lies just south of Regent's Park.
The glory also lies in star teachers such as Robert Tear, Anne Sophie Mutter, Hans Werner Henze, Lynn Harrell and Sir Colin Davies. Those teachers are international names who have trained up young genii which noble Lords may not yet know of. However,

611
they certainly will know of them in five years' time. I refer to Peter Sheppard, Neil Davies, Mark Wigglesworth and Evelyn Glennie. Perhaps the academy's greatest achievement was to attract the Stenzl brothers from West Germany. I maintain that those two men are Germany's finest young pianists. Noble Lords lucky enough to go to Salzburg for the Mozart bicentenary will hear them playing his double piano concerto.
The Stenzls chose London because of its pre-eminent position, but they chose the academy because of a star piano teacher, Stephen Bishop Kovacevich. Would that I could continue in such a hopeful vein. However, I cannot. Stephen Bishop has now left the academy. Anne Sophie Mutter will leave in eight days' time. Hans Werner Henze and Robert Tear will also leave. Lynn Harrell leaves in September and Sir Colin Davies will leave next year. The academy can no longer afford to keep them. The private funds that paid their salaries are now all needed to maintain the students.
It costs £6,500 a year to fund a student. Of that sum only £2,500 funds the tuition. The other £4,000 is meant to fund simple living, which in London is very expensive. Soon it will be possible, and tempting, for a British student to collect his grant and take off for Paris where the living is cheaper and the teaching is free. The academy accepts that the ability to compete with the huge foreign conservatoires is paramount. For that financial ability to be real, my noble friend Lord Gowrie has recommended in his report that a simple extra sum of £ 1,000 per student per year should be made available. It would indeed be a good thing if the Government could provide that by central block grant.
The source of that extra funding could so easily be a national lottery. The noble Baroness, Lady Birk, has already referred to that. The per capita contribution would be considerable. I know, for instance, that the average Spaniard spends £1.20 per week on his national lottery while the average Irishman spends £2.20. There is an additional reason for having a British lottery in that it would pre-empt the attractive offers to partake in foreign lotteries that are already flooding into this country. At the moment Her Majesty's Customs intercepts 3 million lottery letters every week coming in from the Continent. However, after 1992—that is exactly when the British student will so easily be able to take his music grant abroad —that Customs machinery will be dismantled and we shall be bombarded with foreign lottery material offering prizes of at least £1 million.
It therefore seems to me to be almost a necessity to introduce a British lottery. At a contribution of only £2 per person per week its annual gross income would not be a mere £1 billion, as the noble Lord, Lord Birkett, has said. Its gross annual income would be £5 billion. That is more than enough for every kind of performing artist and—the noble Lord, Lord Goodman, will be pleased to hear this—for every performing horse.
612
It is good to be on top and to be the best of the bunch. London is just that in the world of music. London must continue in its pre-eminence. However, we pay our music colleges rather little. With the new freedom of the 1992 market we shall become second best, unless we turn that freedom into a challenge. We must nurture our young musicians. We can at least double their funding by means of a lottery. We can rival Paris and New York.
It is odd to think of that former Academician, Sir Arthur Sullivan, setting to music 100 years ago words from Patience (or Bunthorne's Bride) that are so apt today. He made Bunthorne sing:
"By the advice of my solicitor I've put myself up to be raffled for".
For Bunthorne, read Norman Lamont, and we are home and dry.
7.35 p.m.
Lord Bonham-Carter: My Lords, I apologise to the noble Viscount, Lord Mersey, for interrupting the beginning of his speech. I must also apologise to the noble Viscount if I fail to follow him on the advantages and disadvantages, intricacies and threats, of lotteries pouring into this country from abroad. I am sure that we should look at what the noble Viscount said with great attention. I myself have no very strong views on that matter.
Like other noble Lords, I wish to thank the noble Lord, Lord Annan, for introducing this debate. I agree entirely with the message that he sought to convey. It will allow me not to go over familiar ground which he covered so cogently. As I understood it, the noble Lord was saying that the challenge and the problems of the arts cannot be met without greater expenditure and that expenditure must come from the Government, at least in part. The noble Lord also said that he thought this was a bad time to ask for extra expenditure. I, on the contrary, remembering the message of the noble Lord's former colleague at King's College, Cambridge, Lord Keynes, believe that a recession is the right time to spend money. Therefore this is an excellent time to spend more money on the arts.
I, too, wish to congratulate the noble Lord, Lord Palumbo, on his excellent and eloquent maiden speech. I hope that the next debate on this subject will be opened by my noble friend Lord Hutchinson and replied to by the noble Lord, Lord Palumbo. I believe that that would even the scores. I hope, however, that the noble Lord has received a message from this House—that when we debated this subject in April 1990, almost a year ago, we were much concerned with the degree and form of devolution of the Arts Council which was then proposed. The noble Lord, Lord Goodman, referred to that. I hope that when the Minister replies to the debate he will tell us where that matter now stands. The criticism of that plan made last April, and repeated today by the noble Lord, Lord Goodman, is extremely cogent.
The idea that one can have 10 federal bodies monitoring expenditure and other matters, and that this can be done efficiently and without an increase in

613
expenditure, seems to me nonsense. We must be told how that is proposed to be carried out. I would add that it is even more of a nonsense to have a federal structure where only five members of the federation are represented on the central council. What is the position of the other five members? Are they second-class members, or not members at all? How do they make the views of their constituencies known?
Another matter which we discussed and which has been mentioned in the debate today is that the position of the Arts Council was being eroded and emasculated—the noble Lord, Lord Gibson, referred to that—and its authority was being undermined. In my view, and I believe in the view of most of your Lordships, that situation is a serious blow to the administration of the arts in this country. To interfere in the Arts Council in that way would undermine the arm's length principle which is at the heart of the matter. Unless we maintain that arm's length principle the centralising tendencies of the Government, which we have seen exhibited in the words of Mr. Mellor and other recent Ministers for the Arts, will be rampant. If there is one subject that politicians are not qualified to talk about, still less act on, it is the arts. I have always had doubts as to whether one should have a Minister for the Arts. If one has such a Minister one must have a strong and independent Arts Council between him and the artists.
The second issue which has been raised in the debate is finance. I need not repeat the dramatic figures which the noble Lord, Lord Annan, set forth, comparing government support for the arts in this country with support for the arts by our neighbours in France. Germany and Denmark. The effect has been that our major national and other institutions have to find a far higher percentage of their revenue from the box office. In the case of Covent Garden, it is 58 per cent., as against 25 per cent. in Hamburg and 17 per cent. in Paris.
The consequence is obvious. It raises the price of seats inordinately and exorbitantly. It deprives the public, who are the taxpayers paying for those institutions in some part, of the possibility of visiting those venues. That in itself is a serious matter which deserves the Government's attention.
Finally, a decreasing proportion of expenditure will be provided by the Arts Council—40 per cent. next year—for the financing of a body such as Covent Garden. How is that gap to be filled? It was in order to fill the gap that sponsorship became so fashionable. That accorded very well with some of the ideas of the former Prime Minister and it introduced into the world of the arts an enterprise culture to eliminate what was seen as a welfare state and dependency culture. That was the message which sponsorship was to deliver.
We must remember certain things about sponsorship. It is not without its uses. It provides the icing on the cake. But it does not do other things. It cannot provide a reliable source of revenue. As its exponents readily admit, it is a form of advertising. That is how Luke Rittner and the noble Lord, Lord Rees-Mogg,
614
described it. Those who use it will stop their sponsorship just as advertisers stop their advertising campaigns.
Sponsorship has a curious impact on the companies which become dependent on it. It affects their culture. They employ a large number of people who are unproductive in the sense that they have nothing to do with the arts but who are concerned with raising money. That section of the staff of the Royal Opera House has increased 50 per cent. in the past eight years. It also means that the boards of those companies are stuffed with rich businessmen who are there to touch other rich businessmen for money. That is not the principle on which the boards of opera houses should be appointed.
The message which this debate sends to the Government is a very simple one. No amount of administrative tinkering and reorganisation will resolve the problems which face the arts. It may make them worse but will not by itself make them better. Until the Government recognise that the arts, like so much else in this country, need investment and that the primary responsibility for that investment lies with the Government those problems will not be tackled.
7.43 p.m.
Lord Morris of Castle Morris: My Lords, we have had a splendid debate and we are extremely grateful to the noble Lord, Lord Annan, for introducing it. I am sure that he will be heartened and encouraged by the number of speakers and by the strength of feeling and power of utterance which the subject has evoked. On behalf of all of us on these Benches I should like to congratulate the noble Lord, Lord Palumbo, on his most distinguished maiden speech. How eloquently he upheld the performances of our artists at home and abroad, and how fortifying were the figures he gave us.
It is clear that in your Lordships' House the performing arts (pace my noble friend Lord Jenkins) are not regarded as the icing on the cake or the frill around the cutlet, but are recognised as an integral part of the very stuff, texture and colour of our national life at all levels.
Yet has not this debate made one thing abundantly clear? Her Majesty's Government have no policy whatsoever on the performing arts in this country; or, rather, in the past 10 years they have had more arts policies than hot breakfasts. Recently, as one Minister for the Arts has succeeded another with lightning speed, the left hand has not known what the right hand was doing. Opera, music and theatre have been a political football and the arts have been, in Chaucer's immortal phrase:
"Now up, now down, like bucket in a well".
Mr. Richard Luce, towards the end of the period of comparative calm and sanity over which he presided, suddenly commissioned the Wilding Report. All powers were to be devolved to the regional arts associations (pace Lord Goodman). The ACGB was to be more important, but more impotent, and the performing arts were to flourish like the green bay tree

615
under local control, while screaming aloud for local sponsorship, or any other sponsorship—any port in a storm.
Then, to our infinite regret, exit Mr. Luce, stage left. Enter, through a trap door with fire and smoke, Mr. David Mellor. The Wilding Report retires to the back burner, the chairmen of the regional arts associations are to be appointed by the Minister, central control is strengthened, and we kiss devolution goodbye. Out of his sleeve the new Minister produces the "Enhancement Fund"—not new money, but a top slice of his budget, as my noble friend Lady Birk pointed out. The strong shall be rewarded while the weak go to the wall. There will he no lame ducks waddling around this marketplace!
But before he had time to turn round Mr. Mellor was whisked away to higher pastures, and his part is played for this performance (with remarkably little rehearsal) by Mr. Renton. Mr. Renton is less convinced than his predecessor of the virtues of the enhancement fund, and he varies its distribution. He seems less overtly interventionist, more content to let the Arts Council control the distribution of resources, more at ease with the trusty old arm's length principle. Perhaps there may be a "steady state" theory in Government policy, as the noble Lord, Lord Gibson, profoundly hoped.
But, within weeks we learn that one very high profile client, the Welsh National Opera, is in deep financial trouble and facing a deficit of some £842,000. As the noble Lord, Lord Annan, said, this is a very serious matter. The Arts Council is not disposed to throw it a lifebelt, and we steel ourselves to watch the inexorable progress of the iron steamroller of market forces as it crushes this delicate flower in its path. But, surprise, surprise! Enter the Good Fairy, in the shape of the Secretary of State for Wales, who waves his magic wand and the deficit vanishes in a flash of light. For this relief much thanks, as the noble Lord Crickhowell, explained.
What price the arm's length principle now? From the Minister on this matter we hear only an ear-splitting silence. What a policy! What a pantomime! The inconsistency, the shilly-shallying, the lack of purpose or plan could hardly be better illustrated than by the debilitating mess attendant upon the premature winding down of Greater London Arts and the continuing delays in setting up the new London Arts Board to take its place. I hope that the Minister will comment on that when he replies. The momentum built up over years has been lost. The London Boroughs Grant Committee (which has publicly determined the arts as its lowest priority) failed on 6th February to set a budget, leaving dozens of its clients at real risk of liquidation. Now the Arts Council has had to step in to take direct control of London's arts funding while the confusion is resolved.
The message which comes through loud and clear is that funding of the arts is important, but consistency of policy is equally vital if the performing arts are to know where they are going. The message is equally clear that the arts as a whole will never flourish in this
616
country so long as the Government regard the post of Minister for the Arts as no more than a waiting room for a likely lad.
The Minister will of course tell us in his reply that Government funding for the performing arts has increased by x per cent. in real terms over whatever period of years fits his case best.
I could reply that it has been reliably estimated that, excluding replacement and earmarked funding, the core funding of the arts is now down to 78 per cent. of what it was in 1978–79. And we shall both be profoundly unimpressed with each other's figures. Never before have we heard of blackouts in the Barbican at the same time that we hear of the death of Kent Opera and of the Liverpool Playhouse calling in the receivers in two months' time, and so on and on.
As has been evident from all sides of your Lordships' House, there is a growing demand for the performing arts in this country. Yet, as Milton put it:
"The hungry sheep look up, and arc not fed".
So far as concerns the citizens of this country, the Government would do well to remember that man does not live by bread alone.
7.50 p.m.
Viscount Astor: My Lords, I am most grateful to the noble Lord, Lord Annan, for initiating today's debate on the performing arts. I should like to congratulate the noble Lord, Lord Palumbo, on his interesting and informative maiden speech. I know that all noble Lords will look forward to hearing him in future debates in this House, particularly in his important role as chairman of the Arts Council. I shall endeavour to reply later in my speech to the learned contributions of other noble Lords. I have to confess that probably their experience in these matters is rather greater than mine.
The noble Lord, Lord Annan, seeks to draw attention to the problems facing the performing arts. With great respect perhaps I may suggest that attention might also have been drawn to the extraordinary growth, health and vigour of this great national asset. I am not suggesting that all is well, but the fact is that over the past decade the arts in Great Britain have gone from strength to strength. That is particularly true of the performing arts. I commend to your Lordships the most recent annual report of the Arts Council of Great Britain. It provides an informed and balanced overview of the state of the nation's theatre, music and dance. Far from being a litany of gloom and despair, it is a record of achievement, confidence and even cautious optimism.
In his personal contribution to the report the secretary general of the Arts Council suggests—rightly in my view —that the arts in Great Britain are enjoying a renaissance. Certainly in terms of quality, diversity, accessibility and volume, the arts have reached unprecedented levels. In 1989–90 about 17 million adults (nearly 40 per cent. of the population) attended plays, concerts, the opera, ballet and exhibitions supported by the Arts Council. That was about 1 million more than four years ago.

617
There is plenty of other good news. Since it was founded the Arts Council has helped establish five new dance companies, seven new opera companies, 34 new regional theatre companies, 30 new theatre buildings and 10 new art and photography galleries. There will be over 600 arts festivals in Britain this year excluding amateur events. What other capital city can boast four great international orchestras, a national theatre with three performing stages, the Royal Shakespeare Company making a welcome return to the Barbican, two great opera companies and the range and quality of the West End commercial theatre?
I invite noble Lords to consider also the range of provision outside London. There are truly fine orchestras of the standing of the CBSO, the RLPO and the Hallé. There are regional theatres and art galleries. Glasgow's tremendous success as the European City of Culture in 1990 has set a standard that others will have difficulty in matching. Like Glasgow, Birmingham has now emerged as a great city of the arts with its new concert hall for the CBSO and new homes for Birmingham Royal Ballet and the D'Oyly Carte Company.
But all is not good news. There are difficulties, some serious and some pressing, as your Lordships have identified. I would suggest that many derive from short-term economic circumstances and are not faced by the arts alone. But the real problem goes deeper. There are three main reasons.
First, the tremendous growth of interest in the arts, which is a thoroughly good thing and welcomed without reservation, has meant that there is constant pressure for the expansion of arts facilities. The second reason is linked to that. Every additional pound invested in the arts in developing new facilities further fuels the demand, not only among the public but, understandably, as a result of their expanding expectations, of the artists themselves. The third reason is that even though successive governments have increased funding for the arts—I shall say more about the present Government's record in a moment —those increases have had to be apportioned among a growing list of clients and have not been evenly distributed.
Successive Ministers for the Arts and the Arts Council have rightly established priorities and have made difficult choices, recognising that the arts are dynamic and that the old must sometimes give way to the new. That process of change is fundamental to the health of the arts. I therefore suggest that the financial difficulties of some of the arts organisations, to which noble Lords have referred, need to be viewed in a wider context. They are not born of failure or decline, nor indeed of government neglect, but result from success, the internal dynamics of the arts and the difficulty of satisfying the appetite of the arts world and the general public.
The Government have an excellent record on funding of the performing arts. I shall restrict myself to several basic statistics to demonstrate that. The Government's grant to the Arts Council of Great Britain in the next financial year will be £194 million. That is an 11 per cent. increase on the current year's
618
grant of £174 million, itself an unprecedented increase of 12·5 per cent. on the previous year. Lest noble Lords be tempted to think that these two very good years—with increases well ahead of inflation—mask a less impressive earlier record, I should point out that since 1979 the value of the Arts Council's grant will have risen next year by 38 per cent. in real terms. Over a still longer timescale—I am sure that the noble Lord, Lord Morris of Castle Morris, will be interested to hear this—the grant has risen over 200 per cent. in real terms since the end of the 1960s, which is often regarded as the golden age of the arts.
The truth is that public subsidy is a significant element of the total arts economy. But it is not and should not be the only element. Self-generated income has risen by over 40 per cent. from £91 million in 1988–89 to an estimated £125 million next year. Local authorities also spend a good deal on the arts, though I am bound to say that some are more generous and far-sighted than others. Collectively they contribute over £200 million a year. That is right, and enormously welcome. The public purse alone cannot reasonably be expected to provide all the resources which the arts world seeks, given the range of all the competing demands, some plainly of greater priority, for public expenditure. Nor in a democratic society such as ours should the state ever seek to assume that all-powerful responsibility. It needs little imagination to foresee the deadening consequences of such an arrangement.
It really cannot be in the interest of the arts to become over-reliant on a single source of funding, whatever that source may be. The best way that an arts body can safeguard its future and independence is to draw its funding from a variety of sources: not only central government, but also local government, the public, business and private patrons. It is also vitally important that they organise themselves in a business-like way and market their productions to maximise benefit at the box office. The increasing plurality of sources of funding is emerging as one of the great strengths of the British system as it is evolving. But there is some way further to go. Our past successes have been based on it: our future successes may depend on it.
So the performing arts face problems, as we must all acknowledge. But they are not problems of under-funding except in the limited sense that there is never at any one time sufficient money to satisfy every aspiration.
Although more remains to be done in supplementing public subsidy with other sources of income and improving business skills, many arts organisations have made impressive steps towards increasing their financial independence through better planning, better marketing and increased sponsorship. In this they have been greatly encouraged by government policies to that end. I shall touch briefly on some of them.
One of the most important developments was the incentive funding scheme set up by the Arts Council in 1988–89 to help arts organisations maximise self-generated income and to strengthen their artistic and financial planning.

619
Arts organisations had to demonstrate how they would double the value of an award over three years and translate that into artistic goals. Over the three years of the scheme 146 awards will have been made totalling £13.3 million. In the first year alone actual income growth of £16.2 million was achieved for investment of £4.3 million. The scheme has been a tremendous success. I know the fact that it is no longer open to new applications has caused some disappointment around the country, in particular for organisations hoping to benefit from it. However, the Government and the Arts Council took the view last autumn that some retargeting of incentive funding for the arts was timely. As a result a new enhancement fund is being put in place. Its purpose is to strengthen selected leading arts organisations—large and small, in and outside London—to enhance artistic standards and to improve financial and business planning.
Matching contributions will be sought wherever possible. The sum of £7·5 million for each of the next three years has been put aside for separate schemes in England, Scotland and Wales. Once the fund comes into operation in April I think we shall begin to see the vital contribution it will make to strengthening the artistic and financial position of many of our best companies.
Business too has been encouraged to play its part. The Government's business sponsorship incentive scheme was launched in 1984. This has brought over £38 million into the arts, including a government contribution of £12·5 million, and over 1,700 first-time sponsors. Seventy per cent. of the awards in 1989–90 went outside London, which is a tribute to the range of arts events taking place away from the capital and to the interest they attract from local business.
The Government have also encouraged much more professional and effective marketing of the arts. A one-year experimental scheme in 1986 provided important lessons. These have now been disseminated widely to arts organisations through a report called Encouraging the Others. Other important developments flowing from the scheme are the development of distance-learning packages, a training programme for senior managers and assistance in developing marketing consortia. To date the Government have also contributed £90,000 to Business in the Arts, which offers bursaries for training arts managers and places businessmen with arts organisations to advise on their management. That advice alone already has an estimated monetary value of a quarter of a million pounds, with more on the way.
Another very welcome, and potentially significant, development was the introduction towards the end of last year of the gift aid scheme. The aim is to allow potential donors to make straightforward one-off gifts of money, which are then topped up by 33 per cent. by the Inland Revenue. Some donors are also able to claim tax relief on their donation. Although it has been in operation only for three months, a wide range of arts organisations has already received gifts. I
620
commend the scheme to your Lordships individually as well as collectively, and shall be delighted to arrange for further details to be provided on request.
In addition to maintaining and increasing the value of public subsidy, the Government have therefore done much to help expand the total arts economy through other sources of income and to help the arts world to help itself. It will continue to do so. At any time, but especially against the background of an almost insatiable demand for the arts, one of the fundamental tasks of all who fund the arts and all who receive grants is to get the most out of available funding. This involves everyone in setting clear priorities, sometimes involving hard judgments, and pursuing them with all due economy. This lies at the heart of the structural reforms of arts funding to which several noble Lords have today referred. I shall not burden the House with the detailed reasons for the reforms. Suffice it to say that the cultural landscape has changed enormously over the 45 years since the Arts Council was set up. The increasing involvement of local authorities in arts funding and the growth and coming to maturity of the regional arts associations were two of the main manifestations. The time was therefore ripe for a review of what the funding system does and how it does it, and how to bring together all the elements of a decentralised and plural funding system in pursuit of common aims.
Much has been said, in your Lordships' House today and elsewhere, to suggest that the reforms herald the end of the Arts Council. I can assure noble Lords—among them the noble Lords, Lord Goodman, Lord Bonham-Carter, and Lord Hutchinson—that nothing could be further from the truth. The reforms are designed to underline and clarify the respective functions of the Arts Council and the regional boards and, at root, are about the most effective allocation of those functions. The Arts Council will be principally responsible for determining the first ever comprehensive national arts strategy, consulting widely with all involved in the arts. It will monitor the implementation of the strategy and will directly administer grants to our national flagship companies and a portfolio of other clients yet finally to be decided. The new regional arts boards will increasingly administer artistic activity based in the regions.
In December my right honourable friend set out the way in which he wished to see the changes implemented. His conclusions were informed by the need to ensure that the regional boards were demonstrably capable of discharging their enlarged responsibilities effectively and economically. There was also understandable concern in some arts organisations at the prospect of their funding being transferred to bodies not yet in place. It has therefore been decided that the boards will need to have adequate time to become established and that it would be sensible for the delegation of clients to take place step by step. That staged approach will also allow later decisions on the scale and timing of further delegation

621
to be informed by the work that is proceeding in parallel on the new national arts strategy to which the Government attach great importance.
What the reforms will deliver, however, is what Jenny Lee once termed the best for the most. They will do so at the least possible cost. They will also maintain artistic standards. Administrative cost and artistic standards are matters to which the Government have attached, and will continue to attach, the greatest weight in implementing the reforms. However, the reforms are about more than effective policy-making and administration. I have said that the resources available to the arts do not come exclusively from central government. Local authorities are substantial contributors, and the present regional agencies, which are independent of central and local government, have done much to foster partnerships with local authorities and to bring money into the arts at district and county levels.
It is the aim of the structural reforms that regional arts boards should continue to develop these already excellent relationships. The scope for doing so has been highlighted by a recent Audit Commission report, which looked at local authority provision and identified the need for local authorities to set clearer objectives for their spending and to co-ordinate it more effectively. The new regional arts boards will comprise a wide range of regional interests, including local authorities, and will be uniquely well placed to offer advice and assistance to local authorities. An essential element of the reforms is thus the further development of co-operation at regional level between central and local government and the new regional boards in pursuit of the objectives of a national arts strategy which all will have helped fashion. I commend the reforms.
In the time available—I have about three minutes left in which to speak—I shall not be able to answer many of the questions raised by noble Lords. Perhaps I may refer to one of the most important points raised by many noble Lords including the noble Lord, Lord Annan, about capital funds and sinking funds of national companies. My right honourable friend is aware that the state of repair and preservation of those buildings is becoming a matter of increasing concern to their occupants, to the Arts Council and to the Theatres Trust. As noble Lords know, that was established,
"to promote the better protection of theatres for the benefit of the nation".
Individual companies are responsible for the maintenance of their buildings as part of their general overhead expenses and the costs have to be met in the usual way from funds at their disposal, including Arts Council grants.
We know that many companies which tend to operate within tight budgetary constraints have difficulties in allowing for this expenditure.
Against that background the Theatres Trust has proposed an audit of the state of the national stock of theatres. That proposal is very much in tune with the more ambitious millenium initiative being proposed
622
by the noble Lord, Lord Palumbo. The trust is in touch with the council and is suggesting that they might jointly take the matter forward.
My right honourable friend will carefully consider the outcome of those discussions. However, I must tell your Lordships that the Minister has only recently announced the commissioning by his department of a major study of the building renovation needs of the national museums and galleries. At present he has no plans to initiate any further work centrally on arts buildings.
I am afraid that due to the time I have not answered all the points raised in the debate. I assure your Lordships that my right honourable friend the Minister for the Arts will study the debate closely and read all the contributions that have been made.
8.9 p.m.
Lord Annan: My Lords, it remains only for me to congratulate the noble Lord, Lord Palumbo. Indeed, I congratulate all noble Lords who have taken part in the debate for the wonderful way in which they contained their passions within the space of seven minutes. We shall wish to digest what the noble Viscount said and hope that the Minister for the Arts will cogitate our remarks. I beg leave to withdraw the Motion.
Motion, for Papers, withdrawn.

School Libraries: Resources
8.10 p.m.
Lord Dormand of Easington Lord Dormand of Easington rose to ask Her Majesty's Government what provision is being made for school libraries and the school library service in the light of the need for proper resources for the national curriculum.
The noble Lord said: My Lords, most people, whether or not involved in education, would agree that a properly stocked library is central to the success of a school. By "properly stocked" I mean not only the number of books and other resources but their quality and relevance to the stage of development of the pupils. Therefore, it is understandable that there is widespread anxiety about the deterioration in the standard of school libraries. It is a worry exacerbated by the requirements of the national curriculum and the introduction of the local management of schools.
The two most recent HMI reports on secondary school libraries show the position in 1984–85 and in 1988–89. Those reports, the contents of which the Minister will be well aware, show a disturbing position. It is so disturbing that the Labour Party undertook a survey of 14 local education authorities, 12 of which were the subject of investigation in the HMI reports. In addition, it sought up to date information from half a dozen professional organisations concerned with school libraries.
In the light of the HMI reports alone, one would have thought that the Government would have followed them up. Perhaps they are reluctant to do so for the obvious reason that it would draw attention to what can only be described as an alarming situation.

623
If the Government have responded to the HMI reports it should be published for everyone to see. Only in that way can constructive criticism be made. The least that can be done is for the Minister to deal with the reports tonight in his reply to the debate.
It is proper that there should be frequent reference to the HMI reports because the inspectors are the nearest agency to the Government. But concern and criticism comes from many organisations, not least from parents' associations. Most noble Lords can produce anecdotal evidence. As a former education officer for my local area, I keep in touch with schools, governors, teachers, parents and the local education authority. The problems in school libraries are frequently raised. I am sure that the DES receives its share of complaints and, therefore, I hope that we shall not hear any complacency when the Minister replies. However, more than anecdotal evidence is required. From discussions that I have had with colleagues in this House and in another place there is no doubt that their experience is similar to mine.
I turn therefore to the Library Association and the School Library Association. Their substantial evidence supports all the anxiety being expressed by other bodies. I am sure that the Minister is aware of their comments—I have them here in a hefty file—and I hope that he will refer to them later. There are two basic requirements for a good school library; money and expertise. No doubt the Minister will tell the House that the local management of schools will deal adequately with the financial aspect. In reply to that I say, as I have said many times in this House, that it depends on how much money is available to the school.
Already we are hearing disturbing stories from all over the country that some schools cannot meet all their requirements with the finance available to them. School libraries and other important aspects of a school's work will inevitably suffer; indeed, they are already suffering. The local management of schools brings pressure to meet revenue commitments, not least because of teaching staff costs which represent a substantial proportion of school budgets. Therefore, it is inevitable that areas of expenditure such as book purchasing, which can easily be cut or delayed, will be affected. I am sure that there will be a significant increase in the number of jumble sales to raise funds for school libraries.
Financial difficulty is also being caused by the problems facing the services that are provided for schools by the local education authority school libraries and information services. No fewer than 20 library authorities are being charge-capped in the current financial year. Even where charge-capping is not taking place cuts are having to be made. In the current financial year, 1990–91, 26 authorities are making cuts in their library services. Thirty-three authorities believe that cuts will need to be made in 1991–92. If the Minister can tell your Lordships tonight that those reductions will not affect the services to schools I shall be glad to have that on the record.
I cannot let the reference to the local education authority library service to schools pass without saying how important and valuable it is. It is manifestly impossible for all or even most school libraries to carry the full range of books and resources. In such circumstances the local authority contribution can be crucial. The importance of the LEA school library services is so great that I find it difficult to believe that the Secretary of State is proposing that they should be delegated to schools.
A few moments ago I said that it was impossible for many schools to carry the full range of books and resources. That is so blindingly obvious that I ask the Minister to deny that the Secretary of State has issued a draft circular proposing such delegation. If he has, I hope that he will withdraw it. The opposition that he will receive from the schools should leave him in no doubt that not only is it an unwise suggestion but that it is a ludicrous proposal.
Those services are provided by professional librarians and that speaks for itself. That brings me to ask the Minister another question—I am sure that he has noticed that I have many questions to ask him tonight. Does he have information on whether any schools have found or will find it necessary to dispense will full-time librarians? I am aware that full-time qualified librarians are usually employed only in larger schools, but professional librarians in such schools make a vital contribution to the service. Their absence simply lessens the value of the library to a considerable extent. We should consider an increase, not a reduction, in full-time librarians for schools. In practical terms, a professional librarian could serve more than one school.
All my remarks tonight are made against a background which did not exist two or three years ago. There is now the national curriculum and initiatives such as TVEI, CPVE and, of course, GCSE. All those encourage—and this is extremely important —student-centred, resource-based learning as opposed to teacher-oriented, classroom-based teaching. That emphasis requires the provision of adequate learning resources ranging from the traditional printed material to audio-visual and electronic media.
If the Government believe—and presumably they do—that that is the way to proceed, then more and not fewer resources are necessary for our children. It is reasonable to assume that when the Government introduced such a massive change as the national curriculum they were aware of the additional cost involved and that schools and LEAs would need to be provided with the additional resources required. So far it appears that they believe that a shuffling of money under the guise of LMS will meet the needs brought about by the innovation.
In May 1989 Her Majesty's inspectors issued a survey called Better Libraries: Good Practice in Schools. Among other references to the national curriculum it stated:
"The objectives of the national curriculum will be best supported in those schools which have a broad, balanced and up-to-date provision of library books and resource materials".

625
With due respect to HMIs, that is a statement of the obvious. However, that is what was said and therefore I put it on record. I assume that that authority means something to the Government.
I have refrained from quoting numerous statistics although I have many of them. Perhaps I may look at one very important statistic—the cost of and allowances for books. The Library Association and Book Trust recommend a minimum of £8.53 per pupil per year. In 1985.FIMIs recommended that secondary school; should have a library containing 10 books per pupil and that 10 per cent. of the stock should be replaced each year. On the basis of my experience, I believe that most LEAs find those targets very difficult to achieve.
However, what is actually being spent is frightening. The 1989 HMI report stated that the average expenditure from six LEAs, chosen because of varying conditions, was £2.04 per head. A recent Labour Party investigation found these figures: for Knowsley, an average of 65p per pupil per year; for Warwickshire, just under £1; for Shropshire, £1.45; and for Dorset, £2.75. Those figures speak for themselves.
However, there is now an additional complicating factor caused by the Government's incompetence in dealing with the economy. Of course, I refer to inflation. In his 1988–89 annual report the Senior Chief Inspector of Schools said:
"There are some indications that the shortcomings in the availability of books are now being influenced by the inflation in book prices outstripping rises in capitation allowances".
As one who buys a fair number of books, I can testify to the large price increases which have taken place over the past two years.
If the Government accept the view of the inspectors —and I do not see how that can be refuted—I ask the Minister specifically whether this matter is being monitored in view of the fact that the Government are supporting expenditure on books for the national curriculum through the education support grant programme. Can the Minster say what assessment has been made of the additional costs for books in order to introduce the system? Those matters are of fundamental importance to the proper education of our children.
I concede readily that when all local education authorities and schools are looked at there is considerable variation as regards this type of expenditure. However, the purpose in raising this subject today is to draw attention to the highly unsatisfactory position in many schools and areas. I urge the Government to do something about that as a matter of urgency. The fact that the 1989 HMI report said that it found "encouraging signs of improvement" on the position contained in its 1985 report should give no cause for complacency, though we can all be pleased about the improvements which are mentioned. There is a great deal to be done, particularly because of what has been said about the working of LMS, the national curriculum and the other matters to which I have already referred.
I have not mentioned one aspect which some noble Lords may not regard as having the same importance as others. I believe that the room designated as a library should be attractive; a room
626
to which pupils are eager to go. That helps to stimulate a love of learning. One of the joys of life for some of us—and I assume many in your Lordships' House—is browsing in libraries and bookshops. That ensures that learning is a never-ending process. I know that improving a library in a school means more capital costs but that should not deter us from aiming high.
I shall not pretend that I know much about the position in Scotland and Wales but since I tabled my Question, colleagues from those countries have expressed their disquiet to me. The noble Baroness, Lady Carnegy of Lour, told me that had she not had another engagement this evening she would have taken part in the debate. She is honorary president of the Scottish Library Association and would have undoubtedly made a valuable contribution to our discussions.
From the information I have it is clear that the same problems exist in Scotland. The recent curricular developments have created significant demand for material and for professional staff to organise and exploit that material. In 1985 both the Library and Information Services Council for Scotland and the Scottish Library Association produced reports on the school library service which clearly stated the need for planned developments so that curricula changes could be adequately resourced. It is worrying that the Scottish education department has not taken into account any of its recommendations.
It is not surprising to learn, regrettably, that in Scotland there is the same anxiety about the school library service. The Secretary of State for Scotland should consider that matter. If that matter is being looked at, I should like more details. Perhaps the Minister can give that due consideration.
I turn briefly to Wales because it is obvious that the same problems exist there. They are contained in the recently published report prepared by the Library and Information Services Council for Wales which is the advisory body for the Secretary of State. Among the disturbing features and statistics is the fact that the annual average spending on books is £1 per pupil per year. Perhaps I had better leave such matters to be raised on another occasion by noble Lords from the Principality.
I have dealt with the situation in Scotland and Wales because it is of considerable significance that the same problems exist in all three countries. One point which arises from the references to Scotland and Wales is that there does not appear to be much co-ordination between the three Secretaries of State. In view of the momentous changes taking place in education there is surely a great need for co-operation to ensure that the same standards apply —and not only in the provision of good school libraries.
I conclude by again referring to the HMI report which states:
"Although advances have been made there are still many pupils who are paying the price of past neglect. It is still true to say, as in the 1985 HMI report, that the investment of money, staff and time in some libraries is so low that without

627
changes of policy, perception and levels of provision it will be difficult for these pupils to receive their full library and information skills entitlement".
That shows concern enough, but those words were written before the full implications of LMS and the national curriculum were known. Indeed, they are hardly yet fully realised some two years after the report was written. There is a great need for an up-to-date survey of the situation. Present day statistics and attitudes urgently need up-dating.
Schools, their staffs, the librarians and parents are eager to improve what is for many pupils nothing less than a critical situation. The onus for that improvement lies fairly and squarely on the Government.
8.31 p.m.
Lord Addington: My Lords, I should like to thank the noble Lord, Lord Dormand, for raising this subject. It is surely one that strikes at the very heart of the education system. When we are dealing with written knowledge we need books to study that knowledge. It is worth noting that it is not just books that are now stored in libraries. Such things as audio visual materials generally fall under the heading of library activities and play an increasing part in our day-to-day lives. They should be fully utilised in the many forms of educational activity that exist today.
The noble Lord did a great deal of the spadework in the debate by indicating the statistics behind the fact that insufficient money is being spent in the libraries of our schools and colleges. A great problem arises from the fact that we are vastly expanding the number of books—textbooks and general information books—required in schools due to the national curriculum. The national curriculum was aimed at helping more students to study more subjects to examination level, and one hopes that it is achieving that goal. That means that every pupil will need more textbooks and back-up books containing general information.
It is worth remembering that those are two very different demands placed on the library sections in schools. One is to provide the hard factual knowledge for the national curriculum and GCSE examination. Pupils will no longer be spoon-fed that information. Thankfully the days when a teacher overcame the problem of having insufficient books by dictating to the class are disappearing. That was one of the most appalling educational practices.
The noble Lord, Lord Cavendish, reminded me that I should refer to the subject of dyslexia. For anyone with reading or writing difficulties dictation was probably the worst of all teaching methods, for one simple reason. One wrote badly—and not everything—into a textbook or onto a piece of paper and could not read it back afterwards. It was a total waste of time. I would also point out that when a teacher was attempting to deliver information he often delivered it in a steady pattern. In my case that generally meant that I fell asleep after about 25
628
minutes. That happened also when I was at university and I blame my low attendance at lectures on that.
To take further the point that books should encourage interest in the acquisition of knowledge, that means that we must have up-to-date textbooks dealing with subjects in an up-to-date manner. They must be written in a manner to which students can relate. If one examines textbooks, one sees that over the past few years the style has changed very rapidly. The way in which textbooks are written has changed dramatically; they are no longer as dry or as stale as they were. That fact, and the fact that syllabuses have been changed mean that schools are under pressure to change textbooks. That is another reason for paying attention to what the noble Lord, Lord Dormand, said—that we are spending insufficient amounts on books. We are on a treadmill. Standards are improving and we shall need more books, perhaps not in greater numbers but they will need to be replaced faster.
The greater emphasis on technology and science in the national curriculum means that we need more textbooks on subjects that are rapidly advancing. For instance, basic introductory facts now were often examination subjects a few years ago. I remember, more years ago than I care to admit, finding that new areas in biology had opened up during the previous five years because an electronic microscope had been brought in. The study of cells meant that we no longer had simply a nucleus and some mush around the outside but one had a number of different components within that jelly because one could actually see them. There are many more examples in the electronic and technology fields. They are fast expanding and schools are under increasing pressure to keep people up to date with these subjects.
Those people with special educational needs—to refer back to one of my earlier points—need a great variety of books that are specifically written for them. They must hold the person's interest and the person must be able to understand them. Fortunately there has been a move towards people providing what are called easy reader books. They are simplified versions of books such as the literary classics of the 19th century which can be read by a 12 year-old without his necessarily being able to ascertain the plot. Bringing those books up to date places another strain on the library system. With those types of books being introduced and with more people appreciating that that type of stimulus is needed for education, the pressure also increases. As we understand more about certain subjects and learning difficulties, libraries are placed under increasing strain.
I do not wish to say much more at this point, as the noble Lord, Lord Dormand, said everything so well. However, if we are to encourage people to educate themselves and stop teachers spoon-feeding knowledge into pupils, we must make that knowledge available in a form which the pupils can acquire by themselves once they have been shown where to find it. That means that libraries have an important role to play; it is an increasing and expanding role. Libraries

629
suggest that if no professional librarian is available, any teacher who finds himself having to look after a library should be trained in how to do so.
8.38 p.m.
Baroness David: My Lords, for all who enjoy reading and want our children to enjoy reading and to learn how to use books and other learning materials, this is an important debate. I am glad that my noble friend Lord Dormand asked this Question in regard to school libraries and the school library service.
I do not know whether it is necessary for me to declare an interest; it is certainly not a financial one. I am chairman of the National Book Committee, which has among its members representatives of all groups interested in books. They include authors, agents and publishers. I am glad that the noble Earl, Lord Stockton, is to speak this evening; he is a publisher representative on that committee. The members also include book sellers, both antiquarian and ordinary, librarians and the Book Trust, which is the successor of the National Book League, which represents the general reader.
I am also a vice-president of the Library Association. What the National Book Committee does is promote the book. For instance, it put up a very good fight against VAT on books, and that was a battle which was won. The committee regularly produces surveys of school book, university and polytechnic and public library spending. It publicises these, sending them to local authorities, both officials and chairmen of committees, and to very many MPs and Peers who are involved in the world of education and the arts.
The figures produced in these surveys over the past 10 years have not been encouraging. One has to make the caveat that some local authorities are very much better than others. Inevitably, the figures that I have are a little out-of-date because our surveys come out a year or two late. I shall quote very few because statistics are boring. My noble friend has quoted some. It is important to get the picture. Book spending per pupil for all books, text and library, in 1987–88 for primary schools was £9.06 and in 1988–89 it was £8.93. That is a reduction in real terms of 7 per cent. or so. Of that sum the estimated expenditure on library books was £1.56 for primary schools and £2.49 for secondary schools, whereas the national standard recommended as not good but reasonable was £4.64 for primary schools and £7.56 for secondary schools.
Therefore, one sees how far below the recommended standard expenditure already is. Expenditure on the school library service for all costs and not just books also went down by about 7 per cent. in a year. It was just over £3. That amount of money hardly buys a paperback. It is no wonder that the report of the HMI on libraries for 1988–89 found that 70 per cent. of the stock was obsolete. A survey carried out recently by Mark Fisher and Derek Fatchett for the Labour Party into school libraries revealed numbers of out-of-date and quite astonishing books. From that survey they culled these gems:
"Pygmies are fierce little creatures, but all are loyal subjects of King George V".
630
That was taken from a history book of 1930. Another example is:
"If man lands on the moon, he will need radio communication".
That was from Science Today of 1954. Spending on books for school libraries fell from almost one-third of schoolbook expenditure to one-sixth over the past 10 years. That explains how the stock has become increasingly out-of-date. Therefore, the injection of more books from the school library service becomes more rather than less important.
The weeding out of old stock is very good practice, but it can reveal the paucity of provision. One school was left with just four shelves of books. But now we have LMS. In this debate we are facing today exactly what we faced last Wednesday when we debated the teaching of instrumental music and the future of theatre in education. What used to be provided and overseen by the local authority will be provided or not at the whim of the governing body. The overall view which could ensure some fairness for all pupils in an area will be gone. The school library service may well be at risk when the governing body decides what it will or will not buy in.
Much will depend on local authority management and how it organises its services. Some have the library and education services separate; others amalgamate them under one committee. Where there is integration the service can be very good, as in Hertfordshire; but I hear that Oxfordshire is cutting its expenditure on the school library service by 25 per cent. in 1991–92 and by a further 25 per cent. in 1992–93. There is a crisis situation in many areas, whether because of the poll tax, charge capping or whatever.
The DES Circular 7/88 on LMS advised that the Secretary of State will allow the school library service to be a discretionary item. That means that it will not have to delegate expenditure on the school library service provided that the costs can be held, along with other discretionary items, to within 10 per cent. of the general schools' budget. At the present time most LEAs are likely to have retained central management. I should like to know whether, when he comes to reply, the Minister has any information on this matter. But by April 1993 LEAs will be able to hold back only 7 per cent. At this point it is all too probable that it will be left to the school to decide whether or not to buy in the school library service.
Non-statutory advice from the DES states that the DES would not expect a school to have to commit itself for a period of more than three years to continue what remains of the school library service. Are Ministers really happy that the school library service is likely to be broken up by LMS? The HMI survey to which my noble friend referred; namely, Better Libraries; Good Practice in Schools states:
"A good Schools Library Service offers invaluable advice and support for those within schools concerned with libraries. The wide range of professional help which many School Library Services provide includes lending up-to-date reading matter of quality, reviewing stock items in terms of suitability … ".
I hope that the Minister will respond to my question as to what the DES intends to do.

631
The amount of the school library service budget when delegated to individual schools will in any case be small in terms of book purchasing power when compared to the benefits reaped from retaining a centralised service. One LEA, which is not a big one, quotes its situation where each school has potential access by exchange to over 60,000 volumes and 7,000 audio-visual items. That is the situation at the moment. What will happen in two or three years' time?
As my noble friend said, all that is particularly important with the introduction of the national curriculum and of the GCSE, too. They will make very much greater demands on library resources of all kinds. Children have to learn to learn. The Cox Report, making recommendations on the English curriculum, says:
"Schools must provide a dynamic reading environment which requires a wide-ranging collection of material available at all times".
The report also stresses the need for information-handling skills to be learned at primary age. For that a trained and competent librarian is necessary. School library services for the schools they serve are not an extra provision—the icing on the cake for an already ample book stock. For many schools, and small primary schools in particular, they provide the essential books for topic-based work. The basis of a book stock presents reading as an attractive adventure for children. School library services provide not only the most up-to-date stock but also the expertise of a professional librarian staff who advise and support teachers both in choosing stock wisely and in running libraries. In most cases teachers have no professional training for that task. The schools which have chartered librarians on their staff are all too few. I am told that Scotland does very much better in that respect than England and Wales.
I return to the primary schools. I had a letter from Mrs. Shirley Singleton, a parent of two children at Thorneyholme Roman Catholic School, Dunsop Bridge, Clitheroe. She is also a governor of another small school. She had somehow heard of this debate. She wrote to express her concern about the possible changes to the school library services. She fears the detrimental effect on the school which is 12 miles from the nearest public library. That means that it is not at all easy for children to visit it. I have no doubt that there are many other anxious parents who care about their children's reading and the opportunities that may be lost.
We have the Secretary of State moaning about reading standards. Does he really think that if there are not enough books and books of the right kind, whether in the classroom, in the school library or provided by the school library service, children will be encouraged to read and to get to understand that it is a satisfactory and satisfying way of spending one's time?
I hope this debate will have alerted the department to the seriousness of the situation now and how it could deteriorate further, if, as we fear, LMS will
632
mean a real reduction of the school library service and of the experienced librarians who run it—particularly in the light of the increased needs arising from the introduction of the national curriculum. I am glad that the Select Committee on Education, Science and the Arts in another place is about to undertake a quick study of reading standards in schools and is likely to consider the role of the public and school libraries in reading standards.
Finally I have some questions for the Minister. First, is the department paying attention to the very great anxieties in the schools among parents and LEAs? Secondly, has the department plans for monitoring the effect of devolving funds to the schools and governing bodies, the effect on the school libraries and on the school library service?
8.51 p.m.
The Earl of Stockton: My Lords, I thank the noble Lord, Lord Dormand of Easington, for the opportunity he has afforded the House to discuss the provision of books in school libraries throughout the country. I must of course declare an interest. My family has been in the publishing business for five generations, two more than our interest in politics. Over the past 145 years the libraries of Britain, and especially the school libraries in the world, have been among our most valued and, I am happy to say, consistent customers. Furthermore, I have the honour to be an honorary vice-president of the Library Association in addition to belonging to the august bodies that the noble Baroness, Lady David, mentioned. As a vice-president of the Library Association, I must endorse the remarks made by the noble Lord, Lord Dormand, about resources as set out in the recently produced Library Association report.
School librarians and library committees would love to buy more books. Two things are stopping them; provision for library purchases and, as referred to by the noble Lord, Lord Dormand, the price of books. There are many among your Lordships who would say that the price of books is too high, and broadly I would say that I agree with that. The publishing industry in this country suffers from overproduction. There are just too many titles being published each year, and increasingly, in both the retail and library markets, books are facing competition from items which did not even exist 30 years ago. In the retail book trade the book pound is the leisure pound. We compete with videos, holidays, evenings out, theatres, cinema and beer. In the institutional market we compete with databases, journals, magazines, compact discs, and electronic systems of all kinds, not least the very systems by which librarians and libraries run their affairs.
In real terms the price of books has not gone up more than the competition. Indeed, in most cases it has gone up less. In 1951 the hardback price of a serious biography, or a literary novel, was 15 shillings and sixpence. For the same sum one could buy two tickets in the stalls of a West End theatre or dinner for

633
two at a respectable restaurant. The equivalent book is now £14.99, whereas two stalls tickets will cost more than £30 and a comparable dinner about £40.
No, the price of books in this country is still too high compared to our European partners or even the United States; and it is too high for one reason above all others. This is the discounts and terms demanded and received by the retail trade in this country and especially the major chains, and in particular W.H. Smith. As a firm we operate in the major markets of the world and have academic, educational, hardback trade and mass-market paperback operations in this country, the United States and another 24 countries around the world.
The range of margins from publishers to the book trade in America is from 41 per cent. discount for the smallest bookseller to 45 per cent. discount for the large multiples such as Baker and Taylor. In Britain the small country bookshop can get as little as 39 per cent. discount, but W.H. Smith and some of the other large multiples ask and get a 51 per cent. discount. In the United States terms of settlement vary, but never for more than 60 days. In Britain W.H. Smith has unilaterally imposed terms of 90 days on its suppliers.
One asks how this can be. It is very simple. W.H. Smith controls through itself and its associate companies—they include Waterstone's, Sherratt and Hughes and a number of others—between 35 and 37 per cent. of most trade publishers' UK business. In the case of my own firm, we are 0.7 per cent. of theirs. The result is that the price of books in Britain, including children's books, reference books, classics, and novels, even allowing for larger American print runs, is between 15 and 20 per cent. higher than in the United States. If prices were comparable the erosion of book library provision would have been fully matched.
I shall not detain the House at this late hour with detailed figures of the German and French markets, but experience has shown that the price of books in those markets is of the same order of relative cheapness. It is thus that the prices are higher, not only for the customers in the shops but also for the libraries which in general purchase through library suppliers or through educational buying institutions. We are not referring to text books, which are priced entirely differently.
This brings me to my final point. The library supplier packages the book for the library. He puts on it a plastic case to improve the book's longevity; he marks the book with the cataloguing system of the relevant authority; he affixes the holder for the card and marks the card with the appropriate coding or in some cases the sticker with the appropriate machine-readable code. This is a painstaking and fiddly business, but it is made infinitely more complex by the fact that almost none of the 40 or more library authorities uses the same system, or the same sized card, in the same place on the same bit of the book. There is a sort of scarcely controlled anarchy in the specifications that library authorities insist upon. No doubt there are good historical reasons why so many systems, grew up and no doubt the librarians each consider that their own authority's system is sans pared. Can noble Lords imagine just how much this
634
plethora of different ideas adds to the cost of preparing books both for county and school libraries? In many cases the school libraries in a given area have a different specification from the public libraries in the same area.
This debate does not touch on the provision of textbooks for schools—that is another and even broader question—but if the objectives of the national curriculum are to be met then school libraries must be furnished with a wider range of books. Of course I hope that my noble kinsman the Minister will undertake to present to the Secretary of State in another place the concerns which have been expressed in the debate. If the price of books were less, that would make such additional provision as I hope the Government will make go so much further: and the solution to that lies in the major part in the hands of the retail and wholesale trade of the British book business.
8.58 p.m.
Viscount Eccles: My Lords, I shall keep the House for only a few moments. I cannot add to the commercial information which my noble friend, with his great interest in the selling of books, has given. Listening to what goes on in the book trade made me think that competition is not at all a bad thing.
When I first went to the Ministry of Education in 1954 the state of school libraries was distressing. I invented the list showing the amount or money spent per pupil on books every year. The lowest amount was a shilling or two and the highest was about 20 times that figure. There was a huge spread. The National Book League and others have done a great deal to try to remedy the position. I want to look at this issue from the point of view of the pupil. The pupil wants to have the information necessary for the courses which he or she is taking. As my noble friend has just said, the methods by which one can get information today have greatly increased in number. Books are not the only method. In regard to school libraries, the Secretary of State must now take into consideration all the methods by which information can be given, and, resources being limited, they must be carefully distributed.
When I first came into the business of looking after the maintained schools, nothing struck me with greater force than the appalling number—perhaps 80 to 85 per cent.—of children passing through those schools who, on leaving, had no more education. That was wrong and it was wrong for many reasons. It is wrong nowadays because knowledge is being accumulated so quickly. I considered whether I could use the provision of books in schools to promote a continuing interest in knowledge for those boys and girls who had given up education. The answer was to persuade the local authority public libraries to have a children's department and to encourage the teachers to send the children to the public library. There they could become accustomed to using it and then they might go on using it after they had left school. Very few authorities took up that idea but a few did and it was very successful. If it was worth doing 36 years ago it is worth doing now.

635
It is now much more obvious that education goes on throughout life. The habit of consulting the means of acquiring knowledge ought to be ingrained in boys and girls and they ought to go on doing it. This cannot be done very easily in rural areas but it can be done in towns. It would be a great mistake if the ordinary public library service was not built up at the same time as we do more for the libraries in schools.
Anyone who is concerned with a major educational reform—I was Minister off and on for eight years so I had some chance —knows that one cannot see the fruit of one's labours. One cannot make a big reform in education and get the results in a period of less than 10 to 15 years. Here we are at the beginning of an enormous reform. It is quite likely that certain parts of the machinery required to put the national curriculum into effect are neglected compared with others. If the libraries were neglected compared with other areas I would be the strongest supporter of the noble Lord, Lord Dormand, and those who, like him, think that more resources should be devoted to them. However, an extraordinarily expensive and long-term effort is required to bring a big change into the schools in this country.
9.3 p.m.
Baroness Blackstone: My Lords, I am sure that we can all agree on one point in this debate: books are the most vital ingredient in any child's or young person's capacity to learn. Without a really good supply of informative, interesting and well-written books, a young inquiring mind will be starved and the huge potential of every child to learn—every child has a huge potential to learn—will be wasted.
The habit of reading is best acquired early in life. Those who fail to make it a habit in childhood are unlikely to do so later. Good books which are appropriate to the level of maturity a child has reached should be easily accessible to all our children. This can happen only if their schools have good libraries. I regret to say that many children come from homes where there are few books and where the public library is considered to be an alien place.
I was delighted that the noble Earl, Lord Stockton, and the noble Viscount, Lord Eccles, decided to speak in the debate. I was somewhat disappointed to see the paucity of speakers from the Government Benches on this important subject. It made me wonder whether they agreed that it was important. The noble Earl, the noble Viscount and other speakers have drawn attention to the importance of libraries and to the inadequate nature of many of our school libraries at present. They have signalled concern that the problem could get worse. It certainly could get worse as a result of the introduction of local financial management in our schools. I hope that when the noble Lord replies for the Government he will be able to give some indication of the safeguards that the Government will introduce to ensure that the school library service is preserved and that schools budget adequately for their own libraries.
636
The disparities between schools are already far too great. It would be most unsatisfactory if as a result of local financial management they became worse. I was interested in what the noble Viscount, Lord Eccles, with all his experience of the education system, had to say about the existence of these disparities over a very long period of time. We might have hoped that they would have been lessened and that the gap between the best schools and the worst would now be less than it was in the 1950s. That clearly is not so. What I am particularly worried about is that the disparities will become worse still.
We shall be very disappointed if all we hear from the noble Lord, Lord Cavendish, is a defensive account of why things are really not all that bad. We know that they are just not good enough. The new national curriculum requires new resources in the form of new library provision, as the noble Viscount, Lord Eccles, has said. The subject working parties of the national curriculum have without exception stressed this point. It is regrettable that at present it is hard to see from where these resources will come.
New approaches to teaching at the secondary stage nearly all emphasise what in education jargon is described as resource-based learning with a student centred approach. Gone are the days when a teacher stood at the front of the class with a piece of chalk, a blackboard and possibly a single textbook. It is now recognised that project-based teaching, where pupils are required to go off on their own and research subjects themselves, produces much better results. It encourages initiative, it rewards imagination and creativity, as well as the assiduous searching out of information, and promotes care in presenting the findings of the research. The TVEI, GCSE and the CPV, as well as the national curriculum, encourage these approaches to teaching and learning. But if they are to be effective, the source material and good advice on how to use it must be made available. Above all, young people must acquire information gathering and information handling skills, and the skills will be of great benefit to them after they have left school, whatever they go on to do. Of course teachers can play their part in developing these skills, but the specialist expertise of professional librarians is also needed, backed up with high quality school libraries.
That makes the case for a well stocked and well equipped library in suitable accommodation, with a professional librarian, to be in every secondary school. Most primary schools will not be able to employ a professional librarian, but they too should have a good library which encourages children to go into it, to select books for themselves and to read outside the set times for doing so.
In both primary and secondary schools their libraries need to be supplemented by the school library service, organised centrally by the local education authority. That is especially important for small schools and rural schools where access to the public library is difficult. The very latest HMI report that came out last week emphasises the reliance of primary

637
schools on the school library service. It also notes that, while schools have quite sufficient reading schemes and textbooks, they are,
"less well provided with good quality fiction, poetry and reference books".
At the secondary stage HMI's verdict was pretty damning. Most school libraries,
"are judged to be poorly stocked through a combination of past neglect, low funding and book price inflation".
The inspectorate mentions that libraries are at least being used more than they were, but there is not much point in their being used a great deal more if they are totally inadequate. Perhaps the Minister would care to comment on this most recent judgment of the Government's own advisers.
HMI's latest comments serve only to reinforce the findings of the recent Labour Party survey, to which my noble friends have already referred, as well as reinforcing an earlier HMI report on school libraries, which has also been referred to in this debate. Let me give one or two examples which the Labour Party has recently discovered in regard to staffing. In Lincolnshire, which has 59 secondary schools, there is only one school librarian. In Dorset, with 44 secondary schools, there is again only one school librarian. In Kent, with as many as 138 secondary schools, there are three part-time librarians. My noble friend Lord Dormand asked whether any schools have dispensed with professional librarians. I am sure there must be a number of examples where that has happened with figures like that before us.
Let me give a few examples with respect to funding. My noble friend Lord Dormand has already given some examples of spending per pupil per annum and I shall not repeat them. However, most of the authorities he has quoted were spending less than £1.50 per head per annum. How can that possibly be adequate to provide the kind of library provision that we need in the modern age? My noble friend Lady David reinforced those findings with further figures. Against those miserable sums, the Library Association recommends that we spend a minimum of between £8 and £9 a year.
The HMI survey of school libraries found that a quartet of all secondary schools were spending less than £1 per pupil per annum. It also showed that over one-fifth of secondary schools had fewer than eight books per pupil in their libraries. Much of the stock was out of date and had not been properly weeded. It claimed that in some schools 70 per cent. of the stock was obsolete. As my noble friend Lady David has indicated, the Labour Party survey also found that many schools in the authorities it had investigated had out-of-date stock. She gave your Lordships one or two illustrations. I can give one or two more. A 1962 publication, still in use in one of our schools, claims that Britain imports all its oil. A 1923 volume on England and Wales tells our pupils:
"you may now stand in our office in London and speak to someone in Liverpool or even in New York, part of this last service being carried out by a wireless link".
Well, I never!
638
My final example comes from a book published in 1958 which had in it a chapter on the "frizzy-haired cannibals" of New Guinea. These examples may give us some amusement, but we cannot be confident that we can deliver the national curriculum if children are surviving on books full of misleading and in some cases even offensive material like this.
Noble Lords have made clear that it is the view of HMI that 10 per cent. of books per pupil in secondary schools is the absolute minimum. All the evidence suggests that we are not achieving that minimum figure. Unless action is taken urgently there will be a crisis in school library provision brought about by past failures and by the latest developments in funding. Meanwhile, book prices are soaring.
I liked the comparison of the noble Earl, Lord Stockton, with theatre seats and a dinner for two in a restaurant. The problem is that many parents cannot afford either of those things. I was interested to hear his comparisons with the United States and Europe. I should like to add that since 1981 school book prices have increased by 59 per cent. above the retail prices index. As one local authority librarian recently stated in slightly Churchillian tones, never have school library services been so necessary and yet never have they been in so much danger.
A movement towards local management of schools will have two effects. First, it will leave inadequate funds for LEAs to provide a good school library service because of the 10 per cent. limit to which my noble friend Lady David referred. Secondly, many schools will have difficulty in providing the staff and stocks for their own libraries because of the squeeze on their budgets.
According to the Labour Party survey, over 90 per cent. of schools depend upon the school library service. It appears that most LEAs have retained central management of the school library service rather than delegating it elsewhere. Perhaps the Minister could indicate more precisely what the present position is.
The concern that is now being expressed in a number of quarters by the Library Association and local authority associations relates to what will happen after 1st April 1993 when LEAs will be faced with a further reduction in the proportion of the general school budget that is available for expenditure on discretionary items like the school library service. That reduction will bring the figure down from 10 per cent. to 7 per cent. In those circumstances there is a danger that the LEAs will delegate expenditure on the school library service to schools and that some schools will then decide that they cannot buy in services. That, in turn, will lead to its collapse.
In the light of HMI's strong praise of the school library service and its comments on the invaluable professional support that it provides to schools, perhaps the Minister could say what, if anything, the Government intend to do to ensure that it does not collapse. I repeat the question posed by my noble friend: can the Minister say whether LEAs will be

639
advised to retain the service as a discretionary item or whether it might be earmarked by the DES to remain as such?
Turning to schools, the question is whether under LMS a good school library will be considered the essential high priority item of expenditure that it ought to be. Will it be considered as something that adds to the attractiveness of the school? It probably will be, but the question is whether schools will be able to afford to maintain good libraries. In the present resource climate of charge capping and limits on expenditure, I suspect that they will not.
According to the Educational Publishers Council, schools bought 2 million fewer books in 1989 than in previous years. Pity the poor head teacher trying to deliver the national curriculum and raise standards in reading and other areas with inadequate funding. At present the Government are providing some support for expenditure on books through the ESG programme. Perhaps the noble Lord can say whether the additional costs of books that are needed to support the national curriculum have been properly assessed and whether ESGs will be increased to cover the full costs associated with the introduction of the national curriculum.
According to the English national curriculum, attainment target 2, reading, requires that,
"Pupils should encounter an environment in which they are surrounded by books and other reading material presented in an attractive and inviting way".
What arrangements are the Government making to ensure that HMI monitors progress of that requirement? As my noble friends have suggested, surely HMI should monitor the operation of school libraries on a regular basis, including monitoring the quality and range of their book stock.
The national curriculum provides us with a golden opportunity to turn our school libraries into a wonderful resource, supporting its programmes. It would be a substantial achievement if all of today's pupils were able in later years to look back on their school library as a treasure house which gave them a love of books for the rest of their lives. Sadly, it appears that we are very far from achieving high quality school libraries. Instead, we are letting children and young people down by failing to provide them with one of the most important tools of learning and understanding.
9.20 p.m.
Lord Cavendish of Furness: My Lords, there can be no doubt that children need books. They need text books, reference books and books for general reading. Schools have the task of ensuring that their pupils have the books they need to support the delivery of a broad and balanced curriculum as the Education Reform Act requires.
Exactly how schools go about making that provision is a matter for local decision, not for central government. At the moment many schools make extensive use of the schools library service. They may well choose to continue to do so, or they may choose
640
alternative approaches. That is up to them. The Government do not require LEAs and schools to adopt any one method of providing books for pupils.
The noble Lord, Lord Dormand, asks what provision is being made in the light of the need for proper resources for the national curriculum. The national curriculum does not require wholesale replacement of books. It is based on the best of existing practice. But of course it is requiring many schools to offer a broader curriculum to all age groups than they have done before. It is providing an incentive for all schools to review their book stocks to see how well they match up to the new curriculum —a curriculum that not only offers breadth and balance but also places increasing emphasis on pupils being more active learners.
As a result of reviewing their book stocks in the light of the national curriculum, some schools are finding that there is room for considerable improvement. Indeed, in some cases it looks as though overhauling the stock is more than a little overdue.
Much has been made of the Labour Party's recent survey of 14 LEAs and the finding of reference books dating back to the 1950s or even the 1920s. At the time, that made a good story for the newspapers. I have had a chance to study the matter. It comes under cover of a press release from Walworth Road, complete with some pithy observations from, among others, the Shadow Arts Minister, Mr. Mark Fisher, who is an old friend of mine from my Eton days and, not unexpectedly, it is not entirely free from political bias. I regret the fact that noble Lords opposite managed to carry out the research. I say that because I also wanted to draw attention to the pygmy stories. I shall not question how it happened that this material escaped the reforming zeal of various Labour administrations—and there have been Labour administrations since the reign of George V. Instead, I shall make the much more important point that such obsolete material escaped the notice of all administrations until this Government produced the national curriculum and introduced their reforms. That is the nub of the matter.
It is clear from HMI reports—I am somewhat worried about this because I believe that we are reading different HMI reports, or perhaps they have different dates—that poor provision is often the result of schools' purchasing policies and priorities rather than a shortage of funds. The Government have recognised the fact that many schools will need to make some improvements to their book stock to meet the needs of the national curriculum. The sum of £15 million from the specific grants programme for 1991–92 has been earmarked for the purchase of books related to the national curriculum. I believe that I am right in saying that that would work out at about £1.87 per child. That is my own calculation, but I believe that it is about right. As some of the figures put forward suggested an overall spending on books of less than that per child, one wonders how management is arranged in some schools.
LEAs have submitted bids for all the money available from that fund, and practically every school in the country can be expected to benefit from the

641
grants The Government hope to be able to make the same level of funding available for at least two further years.
That additional support needs to be seen against the general background of local authority spending, because that has to cover the normal, routine replacement of books that should take place all the time. The local authority grant settlement for 1991–92 allows for education authorities in England to spend almost £17.5 billion on education—a 16 per cent. increase on the 1990–91 settlement which considerably exceeds inflation. Given good management of resources overall, that should allow LEAs scope to target additional expenditure where it is most needed. I believe that it is probably needed for books.
Spending on books and equipment has risen from £20 per pupil in 1979–80 to £49 per pupil in 1988–89, the latest year for which complete figures are available. That is a real terms increase of 28 per cent.
Many schools have found that their budget will not go as far as they wish because the price of books has risen much faster than inflation. That was mentioned by various noble Lords. I believe that we are entitled to ask the publishers why that is the case when other parts of the industry have managed to bring down real costs by increased efficiency. I did ask. I shall not go into the replies. They have largely been given to the House by my noble kinsman, although I take issue slightly with him.
Baroness David: My Lords, perhaps I may make a comment. I believe that the reason why the price of books has increased so much is that it was kept down over a number of years. Perhaps the noble Earl agrees with me; indeed, he nods.
Lord Cavendish of Furness: My Lords, I thank the noble Baroness for that comment. It was suggested to me that that was the case but my findings rather refuted it. I am not sure that I have the whole answer to the problem. Against the figures of my noble kinsman, it is suggested that an increasing number of schools go direct to the publishers. That also leaves the problem unanswered.
Whatever the reason, I hope that publishers will realise that the national curriculum works to their advantage by providing a clear framework for teaching and learning. It is to be hoped that with a more clearly defined market they will be able to find ways of trimming their costs.
However, money is not the only need in order to provide a good service for pupils. We need good management as well: sensible purchasing policies, a careful matching of books to the curriculum, and close liaison between library staff and classroom teachers. One of the points that Her Majesty's Inspectorate has made again and again in reports on the implementation of the national curriculum is that as a result of its introduction schools are making enormous strides in planning and managing their curricular provision. HMI makes a similar point in many of its reports on libraries. Good libraries are found where there is good management.
Baroness Blackstone: My Lords, does the Minister agree that since a large number of secondary schools apparently have no professional librarian it is difficult for teachers to liaise with the non-existent librarian? This is a matter of expenditure; it has nothing to do with good management. If the funds are not there to provide professional librarians in schools, we shall not have them.
Lord Cavendish of Furness: My Lords, this is a matter for the LEAs. They may employ whom they wish. Why do they not employ librarians? Like other noble Lords, I have been in local government. Only last weekend, in the light of this debate, I was talking to a former Labour county councillor who was excited by the management overhaul that the authority was carrying out. If one bureaucrat leaves an authority a saving is made in whatever service it is which amounts to £30,000. That money will buy a great many books.
On management, I can give two examples. One publisher told me—and he was backed up by the chairman of a county council library authority—that in 48 library authorities there were 48 different formats for lending; for example, different forms of reinforcement of the books and different tags to put in them. That is not a matter for the Government to decide; it is for the LEAs to overhaul their management.
Again, on good management, I hear that the Croydon library service is an extremely good example. There is no school library service but different people provide the service in different ways. The Croydon library service distributes more books than any authority in London. Per member of staff, the library sees twice as many members of the public as its nearest rival in London. Thus it is a management problem.
Where schools have not developed a clear idea of how they should use the library for teaching and learning and where communication between library and other teaching staff is poor, libraries become neglected and fail to contribute to effective teaching and learning.
In spite of the headline-grabbing stories about dated stocks, HMI has reported marked improvements in the general management of secondary school libraries since 1985. It has found a positive shift in attitudes over recent years and many LEAs have taken special initiatives on libraries. As the noble Lord, Lord Dormand, mentioned, in 1989 HMI published Better Libraries. Although some of the contents of that document may be obvious, it has been broadly welcomed and is being used by a great number of schools. Its recommendations are being put into practice.
Schools also, of course, have increasing control over the management of their own budgets under the local management of schools initiative. Schools now have the opportunity to match resources to needs more precisely than before. We usually find that those best placed to take decisions are those who will be implementing them in practice, and this is what LMS will achieve.

643
There appears to be a fundamental difference of opinion among us. If I understood the noble Baroness, Lady David, correctly, she mentioned the whim of governors. I cannot think of anyone who is better qualified to run a school than school governors, especially under the reforms that have been introduced. I believe it is a little patronising to suggest that people do not know how to run their schools, especially as parents are appearing on governing bodies in increasing numbers. I believe that LEAs and governors in schools can take the responsibilities we are discussing.
Lord Dormand of Easington: My Lords, I am grateful to the Minister for giving way. I do not believe we disagree too much with his comments, although there are some areas of disagreement. In my speech I said that we are not concerned with shuffling moneys about. Rather we are concerned with the total amount of money available. The basis of the speeches made in the House tonight is that there should be an increase in the money available, whether that money is made available to the LEAs, to the governors or to anybody else. The Minister has not dealt with that point.
Lord Cavendish of Furness: My Lords, I, like other noble Lords, have served on a local education authority. I served on an LEA for some six years. I fought very hard for an increase in our standard spending assessment. If the noble Lord does not believe that enormous savings can still be made in local government, we shall have to disagree. I have mentioned a 16 per cent. increase in the standard spending assessment for education. I believe the evidence shows that the reforms, together with the pump priming money, are having an effect and we are seeing improvements.
I know that some people are concerned about the effect of LMS on books. They believe that schools will spend the money on other priorities. But the pilot schemes for LMS demonstrated that schools could save money through good management, and that they were prepared to spend the money they saved on books. This means that on top of the extra support we are providing specifically for the purchase of books, savings in individual schools could further increase the money available. More importantly, however, LMS demonstrates that the Government are ready to trust heads and governors with the responsibility of deciding their own priorities for their school.
We have also heard a good deal about the effects of LMS on the future of the schools library service. These local services are of course funded by individual LEAs, and not by central government. So their future is a matter for local decision. LEAs can choose to hold funds centrally to support these services if they wish. The Government have made it clear—this answers a number of points noble Lords have raised—however that they believe that decisions on all matters related to the curriculum are best made at school level. If funds to support school library services are delegated to schools rather than held by LEAs, it will be up to the schools library service to convince schools that it is worth their while to subscribe to the service.
644
I shall of course draw the remarks made by the noble Lord, Lord Dormand, to the attention of my right honourable friend. However, I do not expect him to withdraw his circular on this matter. I heard only today that Lincolnshire has decided to delegate its schools library service. It is proposed that 85 per cent. of the resources be disaggregated to schools through the formula, with 15 per cent. being retained centrally as a discretionary exception to organise and manage the service. The practical effect of this is that, apart from receiving an increased budget share, schools will have to consider for themselves whether or not they wish to take advantage of these services from within their enlarged budget shares. Schools can no longer of course look to receiving these services free of charge.
I recognise that for Lincolnshire the economy of scale of providing books and other resources through the schools library service encourages governors to make full use of it. In that case delegation has taken place because Lincolnshire believes schools are where decisions are made, but it has set itself a challenge in that it wishes the schools library service to continue and Lincolnshire wishes to control it. If it had not felt that that was a challenge which was workable, presumably it would not have taken that course.
Baroness Blackstone: My Lords, will the Minister give way just once more? Is he, representing the Government, concerned about the possibility of the collapse of the schools library service in some local authorities where delegation has taken place, or would he regard that as totally unimportant and of no significance?
Lord Cavendish of Furness: My Lords, I want the service to continue. I believe that it will, and I believe also that this is the best way of going forward. It is a form of internal market.
There is HMI evidence to show that the national curriculum is increasing the demand for loans from the schools library service, especially in relation to science. If that demand exists it is difficult to see why there should be any concern as to whether or not the schools want the service.
I have covered some points made by noble Lords. The noble Lord, Lord Dormand, highlighted two aspects of provision of the service—money and expertise. Of course they are important, but he did not mention management. That is the key. The noble Lord mentioned charge capping and the difficulties facing local authorities. I touched on that subject. I spoke to the chief officer in charge of libraries in my home county of Cumbria. He said unexpectedly—and it struck me as a change in culture—"Our motto throughout this authority is to do more for less". That is what it is doing.
I am afraid that I am not in a position to answer the question as to whether any schools have disposed of their libraries. I shall inquire whether the figures are available and let the noble Lord know.
On the question of whether we shall respond to HMI reports, of course we shall monitor them, but it is for the LEAs to respond to HMI reports.
Lord Dormand of Easington: My Lords, that is an astonishing remark. HMI reports to the Government. LEAs read, note, and wherever possible implement, the contents of HMI reports, but that is an astonishing thing to say. The Government must take note of the reports. I referred to HMI in my speech as an agent. The relationship is a peculiar one and agent may not be the right term. However, is the Minister saying—because that is the impression that he has given—that LEAs respond to HMI reports and not to the Government?
Baroness Blackstone: My Lords, perhaps I may confirm what my noble friend Lord Dormand has said. The senior chief inspector's report is to the Secretary of State for Education and Science.
Lord Cavendish of Furness: My Lords, I am sorry. I have probably put that incorrectly. I am trying to say that neither the noble Baroness nor I is delivering education. A framework exists and we monitor the position.
It was suggested by the noble Lords, Lord Dormand and Lord Addington, and others that there was general under-funding of schools. The Government are not introducing the national curriculum without resources. I have already given the figures, which show that there has been a 16 per cent. increase in funding for education. Support of £270 million for Education Reform Act reforms is being provided through specific grants in 1991–92. As I have said again and again, resources will need to be managed. The Government have been, and remain, committed to improving the management of education because we believe that that is the best way to support effective teaching and learning.
The noble Lord, Lord Dormand, and other noble Lords commented on the general state of school libraries. I acknowledge that there are many school libraries which could be better and that some are definitely poor. However, the overall trend is one of continuous improvement. HMI repeatedly pointed out that there is no simple relationship between resources and quality. However, there is certainly a relationship between good management, organisation, leadership and quality.
At the end of the day one looks at results. In HMI's recent report Teaching and Learning of Reading in Primary Schools of Autumn 1990 it is stated:
"In 80% of the schools standards of reading were satisfactory … or better and in about 30% of those the standards of reading were high".
That must be a reflection of the overall situation. Where the standards were found to be low, the report had this to say:
"Such factors as socio-economic background of pupils, teacher I turnover and resources did not hinder progress with anything like the same force as weaknesses in management and organisation of reading within the class and within the school as a whole".
On resources the same report said:
"Books, materials and equipment for the teaching of reading were in satisfactory supply or better in 85 per cent. of cases".
The noble Lord, Lord Addington, spoke about audio-visual aids. I have touched on that matter in the
646
overall provision of the special grants. When I saw his name on the list of speakers I thought that perhaps he would be bringing up the issue of dyslexia. I have a long and complex note which I shall forward to the noble Lord rather than deal with the matter now.
With regard to choice of books, that is a matter for the teaching profession. The noble Baroness, Lady David, declared an impressive list of her interests. I have already complained that in my view—and here we disagree—she seems to underestimate the abilities of governing bodies to run their schools. She asked what the DES will do. We believe that we have established a framework and provided the funds. We shall monitor the results. The noble Baroness also mentioned the Book Trust. The figures that we have from LEAs are for books and equipment. They show LEA expenditure at £49 per pupil, which is a rise of 28 per cent. since 1979–80.
I have been speaking for longer than I expected. If there are any further questions I shall write to noble Lords. However, I should like to mention how grateful I was that my noble friend Lord Eccles, with his great experience, took part in this debate. He said that his experience was that the fruits of a great reform would take 10 years to come to maturity. I hope that that is not so. I hope that this particular reform is showing the beginnings of improvements which I believe will continue.
In conclusion, the Government are taking action in three ways to ensure that there are resources to support the national curriculum. They are giving schools greater freedom to make their own choices about how they use their resources; providing additional support through specific grants; and increasing the overall funding for education. Most important, we believe, is the positive influence exerted by the national curriculum itself on the way in which schools plan and manage effective teaching and learning.
Viscount Eccles: My Lords, perhaps I may say to my noble friend that if he wants me to go home happy he has to tell me that the Government accept overall responsibility for providing the equipment to carry out the national curriculum. My right honourable friend Kenneth Baker was extremely interested in the libraries. He always gave me the assurance that when the national curriculum—which after all is imposed on the local authorities—was put into practice, the Secretary of State would ensure that the provision of library equipment in its broadest sense matched the needs of the new curriculum. Is that so?
Lord Cavendish of Furness: My Lords, I am not sure whether I can send my noble friend home happy on the basis that the Government do not run the budget for buying books. They calculate, provide and monitor. They believe that they have the framework whereby education will be properly equipped for these reforms.
House adjourned at seventeen minutes before ten o'clock.